- Oil: Refining margins, which have been weak for weeks, are starting to show signs of recovery. After cuts to processing rates in Europe and some unplanned outages, Brent hydroskimming margins have bounced back from a 10-month low. If this trend continues, crude prices could see a short-term boost, though the market is still dealing with a surplus in supply due to capacity expansions this year.
- Grains: China’s grain warehouses are overflowing as its economic slowdown deepens. The Chinese government has asked traders to limit overseas purchases of corn, barley, and sorghum to ease the oversupply, which was driven by earlier buying sprees of cheap overseas cargoes. This leaves global farmers dealing with reduced demand from one of their biggest customers.
- Weather: Floods in West and Central Africa, affecting 14 countries and 4 million people, have caused devastating damage to crops and farmland. With little infrastructure to resist climate disasters, the region has seen crops like cocoa, corn, rice, millet, and sorghum destroyed. This flooding, the worst in 30 years, worsens existing food shortages and insecurity.
- Lithium: Despite a shutdown at one of China’s largest lithium mines, prices for the battery metal remain low. CATL, a major player, adjusted output at its Yichun mine, but an oversupply of lithium, cobalt, and nickel continues to keep prices down, with demand cooling as electric vehicle (EV) adoption slows.
- Electric Vehicles: Global EV charging infrastructure is set to expand significantly, with over 800,000 installations expected in the second half of this year. China and the US, boosted by government incentives, are likely to see the most growth. Even with slowing EV sales, infrastructure development is expected to continue well into 2024, especially in North America with ventures like the automakers’ joint venture, Ionna.
September 23, 2024
Global Commodities Update: Oil, Grains, Lithium, and More 🌍
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