China, desperate to kick start their economy and improve civil harmony has quietly removed trade restrictions imposed in late 2020 on Australian coal imports. Earlier this year Chinese authorities gave four major importers permission to resume purchases of Australian coal, which began shipping in January. Bloomberg reports that China’s ports and customs offices have been told to allow all domestic companies to import Australian coal, according to people familiar with the decision, who asked not to be identified because the … Continue reading “China Removes Remaining Barriers from Unofficial Trade War on Australian Coal”
Baltic Exchange Derivatives Market Volumes Rose in 2022 Led by Middle East Gulf to China VLCC Tankers
Global shipping found itself in turmoil after Russia’s invasion of Ukraine, right on the heels of Covid afflicted shipping channels since 2020. It comes as no surprise this volatility saw hedging and speculative derivates markets volumes increase in the space. London’s Baltic Exchange released data showing the derivatives market for clean and dirty tankers volumes traded in 2022 was up year on year. The most liquid dirty route was the VLCC route Middle East Gulf to China (TD3C), but TD20 … Continue reading “Baltic Exchange Derivatives Market Volumes Rose in 2022 Led by Middle East Gulf to China VLCC Tankers”
Trading Natural Gas Futures Seems Very Risky, Why is That?
Natural gas futures prices have been extremely volatile in 2022 since the Russian invasion of Ukraine and the stories of heavy losses by traders and speculators begs the question why. There are several reasons why trading natural gas futures can be risky. One reason is that the price of natural gas is highly volatile and can fluctuate significantly in a short period of time. This makes it difficult to accurately predict the future price of natural gas, which can lead … Continue reading “Trading Natural Gas Futures Seems Very Risky, Why is That?”
Freeport LNG Again Delays Texas Export Plant Restart, Moves to Year End
Freeport LNG on Friday again delayed the restart of the LNG export plant in Texas which has been shut down since a June 8 explosion to the end of the year, pending regulatory approval. The Freeport terminal accounted for around 20% of all U.S. natural gas exports before the explosion and is the second-biggest U.S. liquefied natural gas (LNG) export facility. pushing start-up plans for its Texas. Natural gas futures sold off sharply on the news, they had already been … Continue reading “Freeport LNG Again Delays Texas Export Plant Restart, Moves to Year End”
Understanding Commitments of Traders Reports – COT, TFF and DCOT
The Commodity Futures Trading Commission (CFTC) publish the Commitments of Traders (COT) reports with a breakdown of open interest for futures and options on futures markets. More specific, disaggregated reports (DCOT) came after the GFC in 2008. They are considered very helpful in understanding the positioning of traders in the futures market. Disaggregated Commitment of Traders Reports (DCOT) came about from a recommendation made by a CFTC September 2008 staff study about the influence of swap dealers and index traders … Continue reading “Understanding Commitments of Traders Reports – COT, TFF and DCOT”
Steel Rebar Futures Lowest in Two Years Impacted by China’s Dynamic Zero-COVID Policy
Steel rebar futures fell to the lowest in two-years Monday at CNY 3,650 per tonne. Deepening recession fears and heavy losses in Chinese bonds and stocks following the reelection of President Xi. Steel rebar and Iron ore futures have been a clear leader from the early days of the raw materials rally. They are also the most volatile. Volatility is fed multiple things, the property sector, energy prices, interest rates, COVID policy and the ongoing trade war between the world’s biggest … Continue reading “Steel Rebar Futures Lowest in Two Years Impacted by China’s Dynamic Zero-COVID Policy”
China to Boost Domestic Coal Production to Ensure Energy Security
China, the world’s largest coal consumer and producer, announced that it would boost domestic production to ensure its energy security. Newcastle thermal coal futures fell more than $US70 a tonne to $US335 a tonne on Friday night for the October ICE contract. China has been hard by its ill-thought-out trade war with Australia which put them behind the queue as record prices for top quality Australian hard coking coal were set regularly in June the price hit $US430 (AUD$595) a … Continue reading “China to Boost Domestic Coal Production to Ensure Energy Security”
US Share of Electricity Generation from Coal to Decline Further Despite Soaring Natural Gas Prices EIA Forecasts
The EIA in their June STEO expect the continued retirement of coal-fired generating capacity in the United States to see the share of electricity generation from coal to decline from 23% in 2021 to 21% in 2022 and to 20% in 2023. Despite surging natural gas prices constraints include limited rail capacity for fuel delivery, low coal stocks at power plants, reduced coal mining capacity, and rising generation from renewable sources. Coal prices have risen unabated with supply chain disruptions globally. The EIA … Continue reading “US Share of Electricity Generation from Coal to Decline Further Despite Soaring Natural Gas Prices EIA Forecasts”
The Energy Crisis and Volatility See Natural Gas and VIX the Best Performing Futures in January
Futures and commodities had a volatile start to 2022. January was about the energy crisis and interest rates and inflation. This pattern accelerated after the Fed minutes of the December FOMC took hold. This was borne out by the best performing futures being natural gas, VIX and Palladium. Energy was five of the highest gains for the month. The worse were lumber, ethanol and the major stock market indices. For the month S&P and Nasdaq have their worst month since … Continue reading “The Energy Crisis and Volatility See Natural Gas and VIX the Best Performing Futures in January”
Australian Coking Coal Record High with Strong Demand in Korea and Japan
Record prices for top quality Australian hard coking coal were set three times in the past week. The price hit $US430 ($595) a tonne Wednesday, almost four times the price in May. Coal prices have risen unabated with supply chain disruptions. Strong demand in Korea and Japan has fueled the rally over the past seven weeks. The prices were already pressured with Indonesia’s decision to ban coal exports. Further pressure on coal prices came from BHP, the world’s biggest coking … Continue reading “Australian Coking Coal Record High with Strong Demand in Korea and Japan”