Energy and Natural Resources Market Radar (May 20, 2014)

May 20, 2014

2 minute read

The price of West Texas Intermediate crude oil gained 3 percent this week on better economic data and further tension in the Ukraine.
Rigs targeting oil and natural gas drilling in the U.S. rose by six this week to 1,861 according to Baker Hughes.

China CISA mill members’ steel output hit a record high in early May. Crude steel output for the first 10 days of May rose 1.6 percent to 1.82 million metric tons versus the previous 10 days on cheaper iron ore. The benchmark Iron Ore Index stood at $103 per metric ton.
Palladium hit a two-and-a-half-year high on supply concerns from South African mines, after the striking members did not allow returning workers to enter mines. Palladium rose to $827.5 per ounce this week, the highest level since August 2011.

Natural gas fell 2 percent this week to $4.42 per Mmbtu as mild temperatures in the Northeast weighed on demand.
Uranium dropped to an eight-year low of $29 a pound on delays in restarting Japan’s nuclear reactors.
Chinese stainless steel demand is weak at present, following a period of strong production growth (up 21 percent to 19.4 Mt in 2013). Few participants expect a recovery in stainless prices on a meaningful scale until well into 2015.
The price of nickel on the London metals exchange fell over 4 percent this week after hitting a two-year high of $21,000 per metric ton on Tuesday.

Rio Tinto’s Pilbara iron ore expansion is ahead of schedule. Rio has boosted its iron ore output to 290 million metric tons per year, two months earlier than expected, and is on track to hit its full expansion target of 360 million tons per year by 2017.
Severstal put its North American operations up for sale, comprising two steel plants in Michigan and Mississippi, with an expected value of $1.5 billion. U.S. Steel is reportedly interested in the Michigan operations.
China's industrial output rose 8.7 percent in April year-over-year, and retail sales rose 11.9 percent, while fixed-asset investment rose 17.3 percent in the first four months from the same period last year, according to the National Bureau of Statistics.

Australia’s iron ore exports face labor unrest as tugboat workers at Australia's Port Headland port threaten to hold a strike that could halt a quarter of the world's iron ore exports and cost miners $100 million per day.
Russia’s foreign minister said Ukraine is sliding into a civil war that will make it impossible to hold legitimate elections, as Ukrainian leaders and their international allies blamed Russia for the violence.