(Bloomberg) — Oil refining margins are showing early signs of a comeback. Lithium doldrums linger despite output adjustments at China’s biggest mine. And Africa’s worst flooding in decades is devastating agricultural commodities and exacerbating food shortages.
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Here are four notable charts — and a map — to consider in global commodity markets as the week gets underway.
Oil
Weak refining margins have been blighting the oil market for several weeks, but there are signs that could finally be turning. Following a handful of cuts to processing rates in Europe as well as unplanned outages, Brent hydroskimming margins have recovered from a 10-month low. If margins sustain the recovery it could boost crude prices in the short-term, although traders continue to grapple with bumper capacity additions that have lifted supplies this year. Brent swung between gains and losses in Monday trading.
Grains
China warehouses are bulging with grain as an economic crisis takes hold, leaving the world’s farmers to grapple with prospects of a long-lasting slowdown for one of their largest customers. Beijing has asked traders to limit overseas purchases of corn, barley and sorghum — an effort to ease oversupply exacerbated by a buying spree when merchants snapped up cheap overseas cargoes earlier this year. These eventually flowed to Chinese ports just as demand softened.
Weather
Floods across a swath of West and Central Africa have affected at least 4 million people and devastated crops in a region already short of food and plagued by insecurity. The deadly flooding has hit at least 14 nations that are among the least-prepared globally for climate-related disasters, with little money available to buffer infrastructure against bad weather. The area is suffering from destroyed farmland, drowned livestock and damaged crops including cocoa, corn, rice, millet and sorghum in what’s viewed as the worst flooding in 30 years.
Lithium
A reported shutdown at one of China’s largest lithium mines this month has done little to revive prices of the battery metal. Contemporary Amperex Technology Co. Ltd. — better known as CATL — said it’s adjusting output at Yichun mine in Jiangxi province. While the operation is one of the world’s biggest sources of lithium, other suppliers remain. Battery metals — including lithium, cobalt and nickel — have struggled as a flood of new production overwhelmed demand just as the pace of electric-vehicle adoption cooled.
Electric Vehicles
EV charging infrastructure is growing around the world, aided by billions of dollars in government incentives. Installations are expected to rise by at least 800,000 in the second half of this year, a third more than the numbers posted from January through June, according to BloombergNEF estimates. Trends suggest China may see more installations in the final three months of the year, while government grants in the US and new entrants such as the automakers’ joint venture Ionna could boost growth in North America beyond 2024 despite slowing EV sales.
–With assistance from Doug Alexander and Martin Ritchie.
(Adds Monday market move for Brent oil in third paragraph.)
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