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Continental Tsingshan Group plans to expand production China's nickel production may double this year
Mining Weekly reported on January 10 that Tsingshan Group, China's largest private steel company and with large nickel resources, is planning to increase refined nickel production, including building a plant in Indonesia and working with domestic copper smelters to process materials produced by Tsingshan Group into more valuable refined nickel. This could double China's refined nickel production in 2023 from 180,000 tons in 2022, and it will also increase global refined nickel production by about one-fifth.
Tsingshan Group's short position on a large number of London Metal Exchange (LME) nickel futures was shorted in March last year, causing nickel prices to soar 250% in 24 hours, eventually prompting the LME to close the nickel trading market for a week and cancel billions of dollars in controversial ways. Tsingshan Group has struck an agreement with a group of banks, including JPMorgan Chase and Standard Chartered, to avoid forced liquidation or margin calls on its nickel parts.

The LME said on Tuesday (Jan. 10) it would announce an implementation plan by the end of March with stricter rules to prevent market distortions. This includes expanding the authority of the LME risk and control function and increasing capacity accordingly to strengthen LME rules and enforcement procedures to prevent the risk of market distortions and to monitor significant risks in the OTC market to manage the risk of market distortions in the LME. The LME will also consider tightening rules, improving volatility control to mitigate extreme price volatility, and establishing operational readiness for managing extreme events across the market.

The Australian Department of Industry reported that the average nickel price in 2022 is expected to increase by 37% annually to $25,335 per tonne, mainly because the Russia-Ukraine war has affected nickel market supply. In 2023 and 2024, the average nickel price is expected to decline, estimated at $21,560 and $19,940 per tonne, respectively, as supply growth from Indonesia is expected to outpace demand growth, especially for the electric vehicle battery market.

Global nickel consumption edged down 0.2% in the third quarter of 2022 from the previous quarter, as demand in the Chinese market grew to be able to offset declines in other markets, the report said. In the third quarter of 2022, nickel consumption in Asian markets increased by 2.4% compared to the previous quarter, mainly driven by a 6.5% increase in mainland demand, a 12% decrease in demand in Japan and a 6% decrease in South Korea. Nickel consumption in Europe fell 26% in the third quarter from the previous quarter, mainly due to the impact of the economic slowdown.

In 2022, global EV sales are expected to reach 11 million units, up 67% from 6.7 million units in the previous year, while nickel consumption for EV batteries is expected to increase by 42% annually. In the first three quarters of this year, China's electric vehicle sales increased by 120% year-on-year, mainly incentivized by government subsidy programs, which made the average selling price of electric vehicles in China only about 10% higher than that of conventional vehicles, and Chinese electric vehicles are expected to account for 20% of new car sales in 2022, which will meet the Chinese government's five-year plan target by 2025 ahead of schedule.

(Image source: MoneyDJ database)

Ukraine raises winter wheat planting forecast Brazil's soybean production forecast has been raised
As of October 18, Ukraine's winter wheat sown area reached 2.5 million hectares, and the sowing progress reached 61% of the expected sown area, compared with 5 million hectares in the same period last year, Reuters reported. The report also raised its estimate of the area planted with winter wheat in Ukraine in 2023 from 3.8 million hectares to 4 million hectares. Ukraine planted more than 6 million hectares of winter wheat last year, but due to the impact of the Russian-Ukrainian war, farmers have only harvested about 4.6 million hectares of winter wheat this year.
Ukraine's wheat harvest this year has been completed, with the wheat harvest falling sharply to 19.2 million mt from 32.2 million mt in the previous year, mainly due to the lack of harvests in many regions in the east, north and south due to the war between Russia and Ukraine. Ukraine's first deputy agriculture minister, Taras Vysotskyi, said last month that Ukraine's wheat production in 2023 is estimated at 16-18 million mt, a further decline from this year.

Brazil's soybean acreage is estimated to be 42.8 million hectares this year, slightly higher than the original forecast of 42.5 million hectares, and soybean production estimates have been raised from 144 million tons to 148.5 million tons, the USDA counselor in Brazil said in an October 18 report. In 2022/23, Brazil's soybean export estimate has been revised up to 95.7 million mt from 92 million mt. Brazil's domestic soybean processing is expected to reach a record high of 50 million mt, mainly due to strong demand for soybean products, especially soybean oil.

According to the report, the planting of soybeans in Brazil has been earlier this year, mainly due to the more favorable influence of the weather. According to the Institute of Agricultural Economics of the State of Mato Grosso (IMEA), Brazil's largest soybean producer, the state's soybean planting progress was 1.79% at the end of September, up from 1.2% in the same period last year and 0.25% on the five-year average over the same period. According to the Department of Agriculture of the State of Paraná, soybean planting progress in the state reached 6%, compared with 3% in the same period last year and an average of 5% in the same period over the past five years.

Mike Corn, a crop analyst and South American agricultural expert at Soybean & Corn Advisor Inc. in Illinois. Dr. Michael Cordonnier wrote on October 18 that according to data from AgRural, a local Brazilian analyst, as of last week, the progress of soybean cultivation in Brazil has reached 24%, compared with 22% in the same period last year and the average of 15% in the same period of the past five years.

As of last week, the soybean planting progress in Mato Grosso reached 41.3%, compared to 45% in the same period last year and the average of 24.1% over the same period over the past five years. The soybean planting progress in Paraná reached 26%, compared to the average of 34% for the same period in the last five years. Soybean planting progress in Grand River Sul reached 15 percent, compared to the average of 17 percent over the same period over the past five years.

Strong currency values depress inflation The Russian central government unexpectedly slashed interest rates and cut interest rates by 6 yards

While international central banks raised interest rates to fight inflation, the Central Bank of Russia (CBR) did the opposite, cutting interest rates by 6 yards in one go, and the benchmark interest rate fell below before the invasion of Ukraine.
The New York Times and CNBC reported that the Central Bank of Russia announced on Friday (22nd) that it would cut interest rates by 150 basis points, and the benchmark interest rate would fall from 9.5% to 8%, a decline of two yards (0.5%) higher than the market estimate. This is the fifth time this year that the Russian central bank has cut interest rates.

Weak consumer demand and a strong Russian ruble narrowed inflation growth to 15.9 percent in June, down from 17 percent in May, the central bank said. The Russian ruble briefly reached a seven-year high against the dollar in June.

Since Russia's military campaign in Ukraine, global food and energy prices have skyrocketed, forcing countries to raise interest rates one after another. The European Central Bank (ECB) also raised interest rates for the first time last Thursday (21st) after more than a decade apart.

However, the situation in Russia is different. After the war between Russia and Ukraine, Russian prices once soared; The Russian-Chinese Bank raised interest rates urgently at the end of February, and interest rates rose sharply from 9.5% to 20%. However, the damage of Western sanctions to the Russian economy is not as far as expected, and the country's inflation has slowed, giving the Russian central government room to cut interest rates.

Elvira Nabiullina, president of the Russian Central Committee, said the economic downturn would persist longer, but the contraction was likely to be smaller. She stressed that the external environment remains challenging and will continue to suppress economic activity. The central bank estimates that the country's economy will shrink by 4 to 6 percent this year, outperforming estimates at the beginning of the year. In addition, inflation will increase by 12% to 15% in 2022 and narrow to 5% to 7% in 2023.

Liam Peach, senior emerging markets economist at Capital Economics, noted that interest rate cuts in Russia will turn to moderate in the future, with a decline of 4 yards (1%) or less. He expects the Russian benchmark rate to reach around 7.00 percent by the end of the year.

MoneyDJ XQ Global Winner System quotes show that at the end of the 22nd currency market, the Russian ruble depreciated by 0.33% against the US dollar at 57.7830. This year, the Russian ruble has risen 22.55%.