Markets

• The MSCI Asia Pacific Index snapped a three-day winning streak as investors largely shrugged off the news that China’s economy had expanded at its fastest pace in six quarters
• Nikkei index -0.5%; Shanghai Index +0.3%; Hang Seng Index +0.3%
  • China’s economy hit the government’s growth goal last year after an 11th-hour stimulus blitz and export boom turbocharged activity
    • But looming US tariffs threaten to take away a key driver of expansion
  • In December, retail sales jumped 3.7% from a year earlier, exceeding Reuters’ forecast of 3.5%. Industrial output expanded 6.2% from a year earlier, versus expectations of 5.4%
  • Adding to uncertainty around Chinese assets on Friday, China Vanke Co. slid to record lows in credit markets amid questions on the latest status of its top executive and a local news report that state authorities may seize the property developer
  • Nintendo Co. shares slumped the most in more than three months after a glimpse of its next-generation Switch 2 console appeared similar in concept and design to the current model
• S&P 500 Index -0.2%; Nasdaq Index -0.9% Yesterday
  • The downward moves in Asian stocks came even as they’re set to gain for the week, with the advance fueled in prior sessions by bets that Federal Reserve interest rate cuts may come sooner than previously expected

Commodities

• Brent for March is up USD 0.4/b at USD 81.7/b this morning after decreasing by USD 0.7/b the last trading day
• Oil prices rose on Friday and headed towards a fourth consecutive weekly gain as the latest U.S. sanctions on Russian energy trade hit supply and pushed up spot trade prices and shipping rates
  • Moscow’s top customers China and India are now scouring the globe for replacement barrels, driving a surge in shipping rates
  • Investors are also anxiously waiting to see any possible more supply disruptions as Donald Trump takes office next Monday
  • Better demand expectations also lent some support to the oil market with renewed hopes of interest rate cuts by the U.S. Federal Reserve after data showed easing inflation in the world’s biggest economy
• Meanwhile, China’s economic data on Friday showed higher-than-expected economic growth for the fourth quarter and for the full year 2024, as a flurry of stimulus measures came into effect
  • China’s oil refinery throughput in 2024 fell for the first time in more than two decades barring the pandemic-hit year of 2022, government data showed on Friday, as plants pruned output in response to stagnant fuel demand and depressed margins
• Weighing on the market was that Yemen’s maritime security officials said the Houthi militia is expected to announce a halt in its attacks on ships in the Red Sea
• Both Dutch TTF and UK NBP nat. gas prices decreased by 2% the last trading day

• Key notes from the latest weekly Profercy reports:
  • Eastern markets have dominated the headlines with spot values in SE Asia and the Middle East advancing. Importantly, India has taken the unusual step of entering the market for February cargoes
  • Middle East suppliers unsurprisingly increased indications prior to the 23 January RCF tender for shipments to India by 5 March. Few have been able to point to strong demand at $390pt fob, yet a mid-March shipment was booked ex-Oman up to $395pt fob, a $10pt increase on last done. The outcome in India next week will set the bar for next shipments, but will also dictate volumes available for shipment to western markets, including the USA, in February
  • Western demand has been calmer of late, but insufficiently light to cause any nerves amongst producers or traders just yet. European values have supported sales reflecting $410-415pt fob Egypt, if not slightly higher, with warehouse quotes also adjusting. In the face of minimal Iranian supply and quotes from elsewhere in the $440s pt cfr duty paid, Turkish buyers have also been cautious
  • In the USA, Nola prices have edged higher with values around $370ps ton fob for March reflecting just over to $400pt cfr, around $370pt fob Middle East. On this basis, the US market is lagging replacement costs basis fob quotes in Nigeria, the Middle East and elsewhere. Meanwhile, demand in Latin America has been seasonally quiet, but inquiry has been circulating for shipments to Colombia, Mexico and Ecuador. The former is believed to have paid around $420pt cfr, around $15pt above last done on the west coast
  • With current values in most regions above 2024 levels, the stakes are high for markets approaching peak demand. Yet, activity may be subdued until the outcome of the next Indian inquiry emerges
• For ammonia market:
  • Bearish sentiment remains the dominant market tone as robust supply and soft demand combine to create increasingly strong downward price pressure. With export hubs throughout the Americas and North Africa running very well and a similar picture seen in the Middle East and Southeast Asia, suppliers are offering discounted tonnes with greater regularity
  • Even the recent hikes in urea and nitrates prices are not considered sufficient to reverse the bearish outlook in a quarter that is usually characterised by such sentiment
  • Prices are mainly assessed softer on a notional basis to reflect the increasing supply/demand balance for Q1business