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LAUNCESTON, Australia, March 27 (Reuters) - The Australian natural gas sector believes it has the solution to warnings of a shortfall in domestic supplies in coming years. But a recent report from the Australian Energy Market Operator (AMEO) warned the domestic market may have insufficient supplies from this year out to 2025. The second is that if the LNG producers are forced by legislation to satisfy the domestic market first, they risk undermining Australia's reputation in Asia as one of the most reliable suppliers of energy. There is also a time factor, with it likely to take far longer to explore, develop and build the infrastructure than is available to avoid shortfalls in the domestic market. The first is to risk Australia's reputation as an energy supplier and future investment by forcing the LNG producers to supply the domestic market and curtail exports.

It's likely that the pace of imports has been maintained in March, with Refinitiv estimating arrivals of around 103 million tonnes, while Kpler forecasts 102.7 million. The question becomes what the risks are to the so far bullish start to 2023 for iron ore prices and volumes. The chief one is that China's economic recovery focuses more on boosting consumer spending than it does on rebuilding the residential property sector. CHINA IRON ORE IMPORTS VS SPOT PRICESTEEL DECLINE? The risk is that iron ore demand is being front-loaded into the first half of the year, and potentially will decline in the second, with the concomitant risk prices will also come under pressure.

SYDNEY, March 20 (Reuters) - China still added more crude oil to inventories in the first two months of the year, despite lower imports and higher refinery processing rates. About 270,000 barrels per day (bpd) of crude was added to commercial or strategic inventories over January and February, according to calculations based on official data. This was down from the 1.19 million bpd in December and the 740,000 bpd for 2022 as a whole. The total volume of crude available from imports and domestic production in the first two months of the year was 14.63 million bpd, consisting of imports of 10.4 million bpd and local output of 4.23 million bpd. This equates to about 1.72 million bpd of exports, using the BP conversion factor of 8 barrels of product per tonne.

The rising spending on infrastructure and signs of less weakness in property investment are already showing up in China's iron ore imports. China's steel output also rose in the first two months of 2023, gaining 5.6% from the same period last year to reach 168.7 million tonnes. Rather, the data seems to be broadly supportive of a solid start to achieving China's stated economic growth target of 5% for 2023. It's likely that China's crude imports will accelerate from the second quarter onwards as the country continues to reopen after abandoning its strict zero-COVID policy. This would be up from February's 4.96 million tonnes and also above the 4.77 million from March last year.

China is on track to import 5.39 million tonnes of LNG in March, according to data compiled by commodity analysts Kpler. This would be up from February's 4.96 million tonnes and also above the 4.77 million from March last year. Spot LNG prices soared last year in the wake of Russia's invasion of Ukraine as European buyers sought large volumes in an effort to replace Russian pipeline natural gas. Effectively, Asia's LNG market has two current drivers, with cheaper spot prices encouraging buying in China, India and other price-sensitive importers such as Bangladesh. The other driver is milder than usual temperatures, which has curbed LNG imports in Japan, South Korea and Taiwan.

Nonetheless, the likely ramifications of the bank collapse are positive for gold, which was already being supported by other bullish factors. Charting global gold demand by segment. CHINA, INDIA DEMANDChief among those is the expectation that physical demand will rebound in China, traditionally the world's largest consumer of the precious metal. China's gold jewellery demand slumped 14%, or 101 tonnes, to 598.3 tonnes in 2022, according to data from industry group the World Gold Council. Central bank buying is the wildcard for gold, having risen a strong 152% in 2022 to 1,135.7 tonnes.

However, exports of both fuels may drop in March with Refinitiv forecasting diesel shipments of just 120,000 bpd, which would be a nine-month low. Gasoline exports are also likely to slide in March, with Refinitiv estimating shipments at around 82,000 bpd. Improving domestic demand, planned refinery maintenance and lower profit margins in regional product margins are the main reasons that China's exports of diesel and gasoline are expected to drop sharply this month. China diesel exports vs Singapore gasoil crackTIGHTER MARKET? India's diesel exports were 470,000 bpd in February, the most since December 2021, according to data from commodity analysts Kpler, while its gasoline shipments were about 314,000 bpd, the most since April last year.

LAUNCESTON, Australia, March 7 (Reuters) - China's imports of major commodities showed both the potential for an acceleration this year and the reality that economic momentum takes time to build. Crude oil imports were 84.06 million tonnes for the first two month, which is equivalent to 10.40 million barrels per day (bpd), according to the data, released on Tuesday. Where there was signs of an economy emerging from its now abandoned zero-COVID policy was in imports of iron ore and coal. However, the coal imports were largely in line with December's figure of 30.91 million tonnes and November's 32.31 million, suggesting that demand is steady at relatively robust volumes. Seaborne arrivals in the first two months were 47.72 million tonnes, according to commodity analysts Kpler, suggesting that arrivals overland from neighbouring countries were around 13 million tonnes.

If the target is achieved, what will it likely mean for commodity imports in 2023? An acceleration of economic growth to 5% implies that more commodities will be required, and probably to the extent that China's imports will return to positive territory. Already there are some signs of a pick-up in commodity demand, especially for iron ore, the key raw material for steel. If the official numbers are in line with Refinitiv's estimate, February will be the strongest month for crude oil imports since July 2020. Overall, the current backdrop is positive for China's commodity demand, with the end of COVID-19 restrictions boosting fuel consumption and stimulus spending encouraging increasing steel output.

India's coal arrivals are already heading higher, with data from commodity analysts Kpler pointing to a rise in thermal coal imports to 10.19 million tonnes in February, up from 9.71 million tonnes in January and the most since November. It's likely that thermal coal imports may decline over the coming years, but predictions that this trade will end by 2030 are ambitious. Where India will see increasing coal imports is in higher-grade metallurgical coal, used primarily to make steel. Given that each GW of generation requires around 3 million tonnes of coal annually, this implies the coming capacity additions will only need another 100 million tonnes, well below the 500 million tonnes extra the industry believes it will deliver by 2030. Overall, it appears the positive mood of India's coal sector is justified, especially in the short term.

NEW DELHI, Feb 27 (Reuters) - Signs of stronger import demand from India have arrested the decline in price of the thermal coal grades most commonly sought by the world's second-biggest importer of the fuel used to generate electricity. India has about 17 gigawatts of generation that relies on coal imports and the directive, which comes into effect on March 16, means power plants will have time to import coal ahead of the expected surge in consumption. Even without this boost to imports, India's coal arrivals are heading higher, with data from commodity analysts Kpler pointing to a rise in thermal coal imports to 10.19 million tonnes in February, up from 9.71 million tonnes in January and the most since November. Thermal coal imports by China, Japan, IndiaAUSTRALIAN IMPORTSIt is also possible that India will seek to boost imports from Australia, especially of the 5,500 kcal/kg grade that it has been buying. This ban was lifted last month and there are already some signs that Chinese utilities are resuming imports of Australian coal, although mainly coking coal used to make steel.

Benchmark Australian thermal coal at Newcastle Port closed last week at $195.13 a tonne, down from the $249.25 the week prior to the attack on Ukraine. But these fears were never fully realised, largely because Russian commodities were re-routed to new buyers and some consuming nations cut consumption of commodities such as natural gas. There are ongoing consequences of the initial spike in commodity prices, with retail fuel and electricity costs in many countries still well above pre-invasion levels. Such a situation maintains China's access to cheap Russian commodities, increases Moscow's dependence on Beijing, while keeping Western countries focused on the war and its costs to their economies and political unity. It's also worth noting that in the months after the invasion much commentary was devoted to how Russia was benefiting from the higher commodity prices and how the Western sanctions on Moscow's exports were failing.

The gains are being driven by restocking by steel mills in China, which buys about 70% of global seaborne iron ore and produces half of the world's steel. It's worth noting that stockpiles remain well below the same week last year, when they were at 160.95 million tonnes. Australia's iron ore exports are likely to drop in February, with Kpler estimating shipments of 57.7 million tonnes, while Refinitiv is forecasting 58.74 million. While Australia and Brazil dominate the global seaborne iron ore trade, it's worth noting that other exporters aren't adding much to the overall supply story. The supply shortage and expectations of increasing Chinese demand are likely to provide a solid base for further gains in spot iron ore prices.

Rather than being driven by concerns over the potential loss of Russian shipments of diesel, the market in Asia appears more reflective of ongoing strength in diesel exports from China and India. China is expected to export about 2.4 million tonnes of diesel in February, equivalent to about 643,000 barrels per day (bpd), according to data compiled by Refinitiv Oil Research. This would be up from January shipments of around 1.78 million tonnes and 2.32 million in December. Almost 88% of India's February diesel exports are heading West of Suez as refiners on the country's west coast take advantage of the gap left by Russian diesel exiting Europe. It also appears that Russia is still able to find buyers for its diesel, despite losing its biggest market as Europe used to buy about 500,000 bpd of Russian diesel prior to the war in Ukraine.

However, there are opportunities for Russian products to flow into both China, the world's biggest crude importer, and India, the second-biggest oil importer in Asia. Imports of Russian fuel oil by China, India and Saudi/UAESAUDI, EMIRATESThe other region that offers scope for Russian products is the Middle East, where the United Arab Emirates (UAE) and Saudi Arabia have been increasing imports. Both Saudi Arabia and the UAE can utilise Russian fuel oil to displace crude in direct-burning for power generation. This has the advantage of freeing up higher value domestic crude oil for export or for processing in refineries for export as fuels. In February 2022 the UAE exported 5.47 million barrels of diesel, but only 1.91 million barrels went to Europe, with Asian countries taking 900,000 barrels and African nations 1.82 million barrels.

Commodities from iron ore to crude oil to copper rallied after Beijing's surprise abandonment of the zero-COVID policy late last year, but have since eased back. While there are other factors driving commodity prices, it's also the case that the positive market sentiment created by expectations of a rebound in the world's second-largest economy ran ahead of actual commodity demand. China's imports of major commodities have yet to show any major spike higher, even as they remain at relatively robust levels. The irony is that just as commodity prices are losing some steam, China's economic momentum appears to be gathering pace. Overall, there is little doubt that China's re-opening will be positive for the country's commodity demand.

The Newcastle Index only covers a relatively small portion of the seaborne thermal coal market, reflecting higher energy cargoes bought mainly by utilities in Japan and South Korea. A mild winter and strong domestic output have limited China's appetite for imported thermal coal, putting downward pressure on prices, especially for Indonesian grades. Europe's imports of seaborne thermal coal are also dropping, with Kpler estimating February arrivals of 6.61 million tonnes, down from 8.16 million in January and 8.75 million in December. Asia, Europe LNG imports vs spot priceLNG DIPSSimilar to thermal coal, a drop in demand from China and from Europe is freeing up spot LNG cargoes and contributing to lower prices. This may mean that spot LNG and thermal coal prices may remain at levels that appear elevated compared with the average of the last decade, especially as new supply will only arrive in significant volumes for LNG around 2025.

If China's physical demand does accelerate from March, it may prove Aramco made the correct call in raising its OSP. Saudi crude is sold under long-term contracts that typically allow for variations in the volumes sought by refiners, or offered by Aramco. It's likely that Chinese refiners will first turn to Russian crude if they are boosting imports, as will refiners in India, Asia's second-biggest oil importer. This is set to be surpassed this month, with Kpler tracking seaborne arrivals of Russian fuel oil in China at 6.75 million barrels. It appears that China is already buying more Russian crude and fuel oil.

Coking coal prices, along with those for iron ore, have rallied on the back of this optimism, with both steel raw materials recording strong gains this year. The answer is that for coking coal there appears to be both rising demand and some supply disruptions at work. Japan, the second-biggest buyer of seaborne coking coal, imported 5.01 million tonnes in January, up from December's 3.98 million and roughly level with last January's 5.08 million. Outside of Asia, Europe's imports of coking coal rose to 3.81 million tonnes in January from December's 3.55 million, according to Kpler. The overall picture from coking coal imports is that there has been a move higher in recent months, which does provide some fundamental backing to the rally in prices.

In 2021, Europe's monthly LNG imports ranged from a low of 4.54 million tonnes to a high of 9.15 million. However, Europe's LNG demand eased off in January amid a milder winter than usual and ample inventories. While China does have long-term purchase agreements in place, it also buys spot cargoes. The question for the market is whether spot prices have dropped enough to tempt back Asian LNG buyers that were previously reluctant. It will be key to see if utilities in China, India and Pakistan also decide that prices have declined enough to make LNG imports economically viable once more.

China's imports were assessed at 10.98 million bpd in January, down from December's 11.37 million bpd and November's 11.42 million bpd. Asia's crude oil imports vs Brent priceFUEL EXPORTSAnother factor is the price of crude oil and the interplay between China's inventories and its exports of refined products. INDIA RECORDIndia, the region's second-biggest importer, saw January arrivals hit a record high of 5.29 million bpd, up from December's 4.78 million bpd. Other major Asian oil buyers also saw gains in January, with South Korea importing 3.11 million bpd, up from 2.85 million bpd in December, while Singapore imported 1.65 million bpd, up from 910,000 bpd. Japan was the exception, with January imports dropping to 2.83 million bpd from December's 2.96 million bpd.

China's diesel exports rose for a second month in December, hitting 2.79 million tonnes, up 32.8% from November's 2.10 million, according to official data released on Jan. 18. This is because they have been ramping up imports of cheaper Russian crude, thus lowering their input costs. China diesel exports vs gasoil crackRUSSIAN DIESELWhile the oil market has largely been able to work around the exit of Russian crude from Europe by re-routing it to Asia, it may be trickier to replicate this with the loss of Russian refined products. Some Asian fuel importers, such as Pakistan, the Philippines and Indonesia, may be happy to buy Russian fuel, but the discounts would have to be steep. What's more likely is that Asia's diesel and gasoline markets tighten as the EU ban on Russian fuel comes into effect.

While the Chinese ban has been lifted, it's unlikely that buyers will flock back to Australian thermal coal, given the availability of cheaper, and similar quality, coal from Russia. The weakness in prices wasn't limited to Australian thermal coal, with Indonesian grades also dropping. Indonesia is the world's largest exporter of thermal coal, while Australia ranks second and Russia third. Russian thermal coal from Vostochny port, which is largely being bought by China after Japan curbed imports following Russia's invasion of Ukraine, has also been weakening. Prices for Indonesia, Russia and Australia thermal coalVOLUMES SLIPThe softer prices for thermal coal are occurring as demand for seaborne cargoes appears to be weakening among Asia's top two importing nations.

LAUNCESTON, Australia, Jan 24 (Reuters) - The premium of high-grade thermal coal over coking coal in Asia is shrinking as China's re-opening and ending of a ban on imports from Australia powers a rally for coking coal, a key steelmaking ingredient. Newcastle thermal coal futures have traded above coking coal contracts since June 1 last year - something that had not occurred previously in the history of the two contracts. At the same time, coking coal prices weakened as steel production outside China softened while the global economy simultaneously tried to deal with an energy crisis and the accompanying surge in inflation. Thermal coal vs coking coal pricesAUSTRALIA EXPORTSIt's worth noting that the end of Beijing's unofficial ban on coal imports from Australia has yet to show up in any meaningful way in China's imports, although there are signs that coking coal flows will resume. This raises the possibility that coking coal prices will continue to rally, while thermal coal prices may soften as the northern winter ends.

Russian crude export volumes have held up since Moscow's Feb. 24 invasion of Ukraine, but only because China and India have stepped in to buy steeply discounted Russian oil. But while China's crude imports have been rising, a greater share appears to have been captured by Russia. If imports from Russia are excluded, it shows that June imports were 6.97 million bpd and November's were 9.52 million bpd. The increase for imports from all sources in November over June was 2.67 million bpd, but the total ex-Russia was 2.55 million bpd. This raises the possibility that Russia's share of China's crude imports will rise even higher.

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