Iron ore price bounces back while fitch sees rally slowing ahead
The most-traded iron ore for January 2022 delivery on China’s Dalian Commodity Exchange ended daytime trading up 3.7 percent at 871.50 yuan ($134.33) a tonne, after hitting its lowest since March 26 in the previous session.
Iron ore prices rose on Wednesday, after five straight sessions of losses, tracking steel futures as China’s output curbs fuelled supply worries.
According to Fastmarkets MB, benchmark 62 percent Fe fines imported into Northern China were changing hands for $165.48 a tonne, up 1.8 percent from Tuesday’s closing.
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Egypt plans strategic rice cultivation
Land allocated for rice cultivation was slightly reduced this year to 1.074 million feddans, down from 1.084 million feddans in recent years. Rice, a summer crop cultivated between April and October, is one of the highest water-consuming crops, which is why the government is regulating its cultivation.
This year, rice cultivation will be limited to nine governorates, Alexandria, Beheira, Gharbiya, Kafr Al-Sheikh, Damietta, Sharqiya, Ismailia, and Port Said.
Some four million tons of rice are expected to be harvested, according to the Ministry of Agriculture. Additional land may also be cultivated with rice in violation of ministry regulations. This land is estimated to range between 500,000 and 750,000 feddans.
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U.S. calls on OPEC and its allies to pump more oil
U.S. President Joe Biden’s administration on Wednesday urged OPEC and its allies to boost oil output to tackle rising gasoline prices that they see as a threat to the global economic recovery.
The request reflects the White House’s willingness to engage major world oil producers for more supply to help industry and consumers, even as it seeks the mantle of global leadership in the fight against climate change and discourages drilling at home.
Biden’s national security adviser Jake Sullivan criticized big drilling nations, including Saudi Arabia, for what he said were insufficient crude production levels in the aftermath of the global COVID-19 pandemic.
“At a critical moment in the global recovery, this is simply not enough,” Sullivan said in a statement.
The Organization of the Petroleum Exporting Countries and its allies, known as OPEC+, had implemented a record output cut of 10 million barrels per day, about 10 percent of world demand, as global energy demand slumped during the pandemic. But it has gradually raised output since, with the cut eased to about 5.8 million bpd as of July.
OPEC+ agreed in July to boost output by 400,000 bpd a month starting in August until the rest of the 5.8 million bpd cut is phased out. OPEC+ is scheduled to hold another meeting on Sept. 1 to review the situation.
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EIA forecasts lower U.S. natural gas inventories this winter
The Energy Information Administration projects U.S. inventories of natural gas will reach 3,592 billion cubic feet (Bcf) by November 1, the beginning of the winter heating season. This amount is 159 Bcf below its previous five-year average. Above-average withdrawals of natural gas from storage in the 2020–2021 winter heating season and below-average injections into storage this summer contributed to a forecast of below-average inventories of natural gas, along with relatively flat dry natural gas production and high natural gas exports.
U.S. production of dry natural gas has remained relatively flat, averaging 91.5 billion cubic feet per day (Bcf/d) so far in 2021 (January–July), 0.4 Bcf/d below the same period in 2020. Production in January 2021 and July 2021 both averaged 92.5 Bcf/d. Production of natural gas declined in February 2021 by more than 6.5 Bcf/d because of extremely cold weather and well freeze-offs, but it increased to 92.0 Bcf/d the next month.
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China reopening coal mines to meet accelerating demand
Coal-fired power generation in China appears to be ramping up to meet the country’s growing demand for electricity.
The nation’s National Development and Reform Commission last week announced that operations will resume in dozen of coal mines. The reopening is due to surging demand in the past year as China’s economy recovers from the COVID-19 pandemic.
China now accounts for more than half of the world’s coal-fired generation capacity, according to numerous reports. In the past year, coal-fired power rose nearly 2 percent there while it receded nearly everywhere else.
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Tea industry witnesses increase in production and exports in first half
Sri Lanka’s tea industry witnessed an improvement in production and exports in 1H21 when compared with the corresponding period in 2020, although the country continues to grapple with the implications arising from the pandemic.
For the first six months ending in June, tea production reached 161.49 MnKgs, a 31.02 MnKg increase when compared with the figures recorded in 1H20.
High, Medium and Low Growns showed an increase in volume in the said period when compared with the 2020 figures.
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Sugar soars as crops in world’s top producer Brazil hit by frosts
Sugar prices hit their highest level in more than four years on Tuesday after a report confirmed damage to sugarcane crops in the world’s larger producer Brazil from unusually harsh frosts in June and July.
Sugar production in Brazil’s centre-south region fell by 11 percent in the second half of July to 3 million tonnes, industry group Unica said, more than expected. Unica added that the three waves of frosts that hit the agricultural areas had further damaged crops already hurt by the worst drought in 90 years.
Market participants were already expecting lower numbers for the second half of July due to the frosts, but the Unica figures were below estimates. Sugar futures on New York’s ICE exchange, rose nearly 7 percent on Tuesday in response.
Unica said sugarcane produced per hectare fell 17.9 percent in July when compared to the year-earlier period, as the frosts meant mills had to cut cane before the ideal harvesting time.