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The collapse of a Baltimore bridge has threatened to disrupt commodity exports — together with a major chunk of US coal shipments — from an necessary East Coast port. Slumping iron ore costs are poised to plumb depths not seen since Could amid weak Chinese language demand. And the frantic tempo of dealmaking within the oil-and-gas trade continues, with a robust begin to the yr.
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(Bloomberg) — The collapse of a Baltimore bridge has threatened to disrupt commodity exports — together with a major chunk of US coal shipments — from an necessary East Coast port. Slumping iron ore costs are poised to plumb depths not seen since Could amid weak Chinese language demand. And the frantic tempo of dealmaking within the oil-and-gas trade continues, with a robust begin to the yr.
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Listed below are 5 notable charts to think about in world commodity markets because the week will get underway.
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Coal
Final week’s collapse of Baltimore’s Francis Scott Key Bridge after being struck by a cargo ship is including one other supply-chain snag for commodities — and particularly, coal. The Port of Baltimore is the second-largest US exporting hub for the fossil gas, accounting 28% of whole shipments final yr. Whereas annual exports from the port totaled round 20 million brief tons yearly in three of the previous 5 years, they surged to twenty-eight million final yr as a result of rising demand from Asia, in response to the US Vitality Info Administration. The EIA expects the short-term closure of Baltimore’s port whereas cleanup efforts are underway will have an effect on export volumes this yr.
Iron Ore
Iron ore’s maintain on $100 a metric ton is wanting precarious. The steelmaking materials has come underneath sustained strain since early this yr as buyers get accustomed to the depth of demand injury from China’s lengthy property disaster. Whereas there are pockets of energy within the Chinese language metal market — notably, exports and a few areas of producing — demand will battle to eke out development this yr with out some extra decisive coverage strikes from Beijing. One other dip for iron ore into two digits wouldn’t be a shock, though draw back is proscribed as these ranges, which ought to already discourage some high-cost producers from chopping provide.
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Oil-and-Fuel Offers
Dealmaking within the oil-and-gas trade had its strongest begin in 5 years, chalking up greater than $84 billion in introduced mergers and acquisitions, in response to knowledge compiled by Bloomberg. Prime offers included Diamondback Vitality Inc.’s deal in February for Permian Basin driller Endeavor Vitality Sources LP and EQT Corp.’s takeover of Equitrans Midstream Corp. It comes after US oil and fuel producers inked a flurry of offers late final yr, together with Exxon Mobil Corp.’s huge $68-billion deal for Pioneer Pure Sources Co. in October, as power companies look to line up new locations to drill.
Corn
US farmers will plant 5% much less corn this yr as they change a part of their acreage to higher-priced soybeans, in response to a US Division of Agriculture report based mostly on a survey of growers. The discount in corn acres comes as costs for the grain that has dominated American agriculture for over a century faces downward strain amid ample world provides and sluggish demand for US exports. Soybeans, in the meantime, have emerged as a extra enticing various amid booming demand for the crop’s oil, a key ingredient for renewable diesel manufacturing.
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Hurricane Season
A supercharged hurricane season anticipated within the Atlantic spells dangerous information for commodities. AccuWeather Inc. is predicting an explosive season forward, with as many as 25 named storms forming from June by November — properly above a typical yr. A lot of America’s oil and pure fuel manufacturing and export infrastructure are within the Gulf of Mexico and Texas, typically falling previously of such devastating storms. Even weak tropical storms have been identified to knock out as a lot as 30% of offshore manufacturing for days at a time. The storms also can threaten main agricultural crops within the southern US, together with citrus groves in Florida and cotton fields in Texas, the highest producing US state.
—With help from Brian Okay. Sullivan.
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