Pakistan Commodities_Bull run to continue, (AKD Daily, Feb 11, 2021)
AKD Daily
Pakistan Commodities: Bull run to continue
- Global commodity prices have bounced back to pre-pandemic levels, inflated by hopes of vaccine, supply disruptions with countries such as Argentina and Russia imposing cap of exports/ export duty, and US economic stimulus package, with TRJ index +3.8%MoM and up 26.3%FYTD.
- Crude prices continued their upsurge, with Arab Light averaging at US$54.2/bbl, up 11%MoM, but still down 20% from the levels witnessed in the same period last year. Higher prices in Jan’21 were a reflection of Saudi Arabia’s announcement to unilaterally cut 1.0mn bpd of crude oil production in Feb and Mar 2021 in addition to the agreement reached in the previous OPEC meeting, lowering its crude production to 8.1mn bpd.
- China being the biggest consumer of coal has again been found dominating the market as inventory buildup before New Year uplifted coal prices to average of USD90/ton for Jan'21 against average of USD87/ton for Dec'20. However as we approach Chinese New Year, demand seems to have cooled down a bit and the same is being reflected in prices with coal prices currently around USD83/ton, down 8% vs. Jan'21 average.
- Commodity prices are expected to continue their bull-run in the medium run where uncertainties surrounding new coronavirus strain (Europe has already entered into lockdown) inducing strategic stock piling while push for economic recovery will also pull up demand. .
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