Home Commodities Market Movers Asia Jan 29-Feb 2: India’s interim Budget in focus; Red...

Market Movers Asia Jan 29-Feb 2: India’s interim Budget in focus; Red Sea tensions continue to impact commodity markets

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This week, India is expected to outline incentives for clean fuels in its interim Budget, due on February 1. Analysts expect capex subsidies, tax waivers and import duty cuts for this emerging industry.

India’s actual budget will be announced by the new government after the country’s general elections in May 2024.

In the Asian containers market, general rate increases for trade lanes across Asia this week are expected to increase freight rates.

Bookings to and from North Asia have been halted on account of the upcoming Chinese Lunar New Year in February dampening the sentiment that Red Sea provided.

The recent uptrend in shipping and tanker insurance costs amid Houthi attacks in the Red Sea is also lifting refiners’ crude oil procurement bills, effectively weighing on their overall refining margins.

China will release the manufacturing Purchasing Managers’ Index for January on Wednesday. Manufacturing activity is unlikely to show a big improvement in early 2024 due to sluggish consumer spending.

China’s steel production is expected to decrease in the coming days as the market will gradually slowdown due to the approaching holidays.

Market sources are cautious about demand recovery as even after the break, the debt-laden property sector and stagnant growth in consumer spending are likely to keep demand subdued.

In the Asian thermal coal market, Chinese demand is expected to increase for post-holiday delivery of some Indonesian cargoes.

Meanwhile, rains in Indonesia and Australia are likely to limit supply.

I’m Tanya Kalra, thank you for kicking off your Monday with S&P Global Commodity Insights.

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