Connect with us

Markets

China’s Exports Remained Resilient as Global Demand Recovers

Published

on

NEPC
  • China’s Exports Remained Resilient as Global Demand Recovers

China’s overseas shipments held up in April amid recovering global demand and as the threat of a trade war with the U.S. dissipated.

Key Points

  • Exports rose 8 percent in dollar terms from a year earlier, less than the 11.3 percent increase economists projected in Bloomberg survey
  • Imports increased 11.9 percent, compared with an estimate for 18 percent growth
  • Trade surplus widened to $38.05 billion

Big Picture

China’s export outlook has improved on recovering global demand and as the threat of a trade war with its biggest trading partner fizzled. The International Monetary Fund boosted its estimate of global growth this year, brightening the outlook for external demand. Still, both exports and imports missed economists’ estimates, adding to recent evidence that growth may be pulling back after a strong first quarter.

Economist Takeaways

“The latest numbers are consistent with signs of a slowdown from April business surveys,” Bloomberg Intelligence economists Tom Orlik and Fielding Chen wrote in a report. “If the peak for 2017 growth is already in the past, China’s space for progress on a challenging deleveraging agenda will be limited. Diminished scope for higher interest rates will also add pressure for yuan weakness.”

“Growth in exports shows robust global demand,” said Xia Le, a Hong Kong-based economist at Banco Bilbao Vizcaya Argentaria SA. “China’s financial deleveraging has just started, and will weigh on the domestic economy. Imports will reflect that trend first.”

“The broader context for China’s export stabilization is the recovery of global economy,” said Tommy Xie, an economist at OCBC Bank in Singapore. “China’s own economy is also off a good start in the first quarter and the momentum seems to have carried onto April.”

“The upward trajectory for imports and exports is unlikely to hold,” said Michael Every, head of financial markets research at Rabobank Group in Hong Kong. “On the import side, commodity prices are tumbling and credit is being tightened, for now. On the export side, China can’t realistically think it can find a market for its goods 14 percent bigger than last year.”

The Details

  • Shipments to the U.S. climbed 11.7 percent, easing from a 19.7 percent gain in March
  • Exports to the European Union increased 4 percent, the customs agency said Monday
  • Crude Imports slipped from a record to equivalent of 8.4 million barrels per day
  • Coal imports climbed to the highest in four months
  • Imports of refined copper plunged to the lowest level since October

CEO/Founder Investors King Ltd, a foreign exchange research analyst, contributing author on New York-based Talk Markets and Investing.com, with over a decade experience in the global financial markets.

Markets

Communities in Delta State Shut OML30 Operates by Heritage Energy Operational Services Ltd

Published

on

Oil

The OML30 operated by Heritage Energy Operational Services Limited in Delta State has been shut down by the host communities for failing to meet its obligations to the 112 host communities.

The host communities, led by its Management Committee/President Generals, had accused the company of gross indifference and failure in its obligations to the host communities despite several meetings and calls to ensure a peaceful resolution.

The station with a production capacity of 80,000 barrels per day and eight flow stations operates within the Ughelli area of Delta State.

The host communities specifically accused HEOSL of failure to pay the GMOU fund for the last two years despite mediation by the Delta State Government on May 18, 2020.

Also, the host communities accused HEOSL of ‘total stoppage of scholarship award and payment to host communities since 2016’.

The Chairman, Dr Harrison Oboghor and Secretary, Mr Ibuje Joseph that led the OML30 host communities explained to journalists on Monday that the host communities had resolved not to backpedal until all their demands were met.

Continue Reading

Markets

Crude Oil Recovers from 4 Percent Decline as Joe Biden Wins

Published

on

Oil Prices Recover from 4 Percent Decline as Joe Biden Wins

Crude oil prices rose with other financial markets on Monday following a 4 percent decline on Friday.

This was after Joe Biden, the former Vice-President and now the President-elect won the race to the White House.

Global benchmark oil, Brent crude oil, gained $1.06 or 2.7 percent to $40.51 per barrel on Monday while the U.S West Texas Intermediate crude oil gained $1.07 or 2.9 percent to $38.21 per barrel.

On Friday, Brent crude oil declined by 4 percent as global uncertainty surged amid unclear US election and a series of negative comments from President Trump. However, on Saturday when it became clear that Joe Biden has won, global financial markets rebounded in anticipation of additional stimulus given Biden’s position on economic growth and recovery.

Trading this morning has a risk-on flavor, reflecting increasing confidence that Joe Biden will occupy the White House, but the Republican Party will retain control of the Senate,” Michael McCarthy, chief market strategist at CMC Markets in Sydney.

“The outcome is ideal from a market point of view. Neither party controls the Congress, so both trade wars and higher taxes are largely off the agenda.”

The president-elect and his team are now working on mitigating the risk of COVID-19, grow the world’s largest economy by protecting small businesses and the middle class that is the backbone of the American economy.

There will be some repercussions further down the road,” said OCBC’s economist Howie Lee, raising the possibility of lockdowns in the United States under Biden.

“Either you’re crimping energy demand or consumption behavior.”

Continue Reading

Markets

Nigeria, Other OPEC Members Oil Revenue to Hit 18 Year Low in 2020

Published

on

oil-rig

Revenue of OPEC Members to Drop to 18 Year Low in 2020

The United States Energy Information Administration (EIA) has predicted that the oil revenue of members of the Organisation of the Petroleum Exporting Countries (OPEC) will decline to 18-year low in 2020.

EIA said their combined oil export revenue will plunge to its lowest level since 2002. It proceeded to put a value to the projection by saying members of the oil cartel would earn around $323 billion in net oil export in 2020.

If realised, this forecast revenue would be the lowest in 18 years. Lower crude oil prices and lower export volumes drive this expected decrease in export revenues,” it said.

The oil expert based its projection on weak global oil demand and low oil prices because of COVID-19.

It said this coupled with production cuts by OPEC members in recent months will impact net revenue of the cartel in 2020.

It said, “OPEC earned an estimated $595bn in net oil export revenues in 2019, less than half of the estimated record high of $1.2tn, which was earned in 2012.

“Continued declines in revenue in 2020 could be detrimental to member countries’ fiscal budgets, which rely heavily on revenues from oil sales to import goods, fund social programmes, and support public services.”

Continue Reading

Trending