• OPEC output deal: There is growing optimism in the market that OPEC members will come to an agreement on production cuts at their official meeting at the end of this month. However price strength on the back of a potential deal raises the risk of an increase in non-OPEC supply moving forward. • Canada to phase out coal power: The Canadian government announced yesterday that they plan to virtually eliminate coal power by 2030. The government’s aim is to have 90% of the country’s power generation coming from non-emitting sources.
Metals • Growth in zinc mine supply: The International Lead and Zinc Study Group anticipate that the strong prices seen in zinc over 2016 will lead to 5.9% growth in global mine supply over 2017. Chinese mine supply is expected to increase 4.9% YoY, while supply from outside of China is estimated to grow 6.6%. However despite estimates of an increase in supply, the group still estimate that the zinc market will be in deficit over 2017. • 2016 global platinum deficit shrinks: The World Platinum Investment Council in their latest report estimate that the global market deficit over 2016 will amount to 170,000 oz, compared to their previous forecast of 520,000 oz. The revision has predominantly been driven by a slowdown in Chinese jewellery sales. The group also estimate that 2017 will see a global deficit of 100,000 oz.
Agriculture • Lower Indonesian cocoa output: The Indonesian Cocoa Association have said that the country’s 2016 cocoa output could fall to 350,000 tonnes from around 370,000 tonnes last year, as a result of black pod disease. However with expectations around West African cocoa output improving, the price impact from lower Indonesian output should be limited. • US crop progress: The USDA’s latest crop progress report shows that the US corn harvest is 97% complete, matching last season. Meanwhile winter wheat plantings are 97% complete, compared to 95% at the same stage last season. The rating of this crop is also better than last year, 58% of the crop is rated good to excellent, compared to 53% last year.