Commodity Tracker: 5 charts to watch this week

Russian crude exports have surged despite sanctions, while Canadian crude prices have dropped amid tariff threats. Additionally, S&P Global Commodity Insights editors are analyzing the EU stainless steel scrap market and rising chicken demand in the UAE ahead of Ramadan.

1. Russian seaborne crude exports increase

What's happening? Russian seaborne crude exports reached a seven-week high of 3.8 million b/d in the week ending Jan. 19, marking a 24% increase from 3.07 million b/d the previous week, despite a crackdown on shadow fleet tankers. However, Russian fuel and oil product exports dropped to 2.77 million b/d from 2.9 million b/d. The US expanded its sanctions on tankers transporting Russian oil on Jan. 10. Over 80% of Russia's crude exports were destined for India and China last year.

What's next? Russian crude values might weaken further due to increased reliance on Western shipping under the G7's price cap. Russia's ESPO crude exports saw discounts widen to $11.5/b to Platts Dubai on Jan. 14, S&P Global Commodity Insights data showed. The Urals crude discount to Dated Brent, however, is currently still at its lowest since the Ukraine invasion and was assessed at $11.05/b to Dated Brent on Jan. 17. In the immediate aftermath of the latest US sanctions, Middle Eastern crude premiums surged as Indian and Chinese refiners temporarily shifted their focus to Middle Eastern supplies after the US clampdown. Aframax freight rates for Russia's ESPO blend crude skyrocketed from $1.625 million to $6.25 million between Jan. 10 and Jan. 16.

2. Canadian crude differentials drop as market braces for Trump tariffs

What's happening? Canadian crude oil prices in Alberta plunged due to the threat of US tariffs on imports. March barrels of key heavy sour crude grade Western Canadian Select in Hardisty, Alberta, fell $2.25/b on Jan. 17 to a $14.75/b discount to the WTI calendar month average. US President Donald Trump has promised to impose 25% tariffs on all imports from Canada and Mexico, including the more than 4 million b/d of Canadian crude that flows across the border. Prices started sinking after Alberta Premier Danielle Smith met with Trump and said afterward that Canada should prepare for oil to be included in the tariffs.

What's next? US gasoline prices would also likely rise if tariffs are imposed, as nearly 50 US refineries depend on Western Canadian crude as feedstock. Alberta is home to 4.2 million b/d of heavy and light oil production and 17 Bcf/d of natural gas. The province exports 94% of its output to the US.

3. European stainless steel scrap market faces challenges

What's happening? In early January, European scrap prices appeared less attractive compared to those in India, where stainless scrap is priced at a $100/mt premium on a CIF Nhava Sheva/Mundra basis. On Jan. 20, Platts assessed the price of grade 304 stainless solids at Eur1,180/mt CIF Rotterdam, down from Eur1,250/mt in December 2024. The outlook for finished stainless scrap remains uncertain, with European mills struggling to cope with ongoing overcapacity issues from China.

What's next? EU producers are facing the reintroduction of Section 232 tariffs on stainless steel exports to the US, adding another layer of uncertainty to trade flows. With profit margins for European mills remaining low, many companies are expected to continue utilizing cheaper nickel pig iron in their raw material mix, further dampening demand for stainless scrap. Demand for stainless scrap in Europe is anticipated to remain weak in early 2025 due to low buying interest from mills.

4. UAE chicken stocks deplete before Ramadan

What's happening? Cold stores of chicken meat in the UAE have nearly emptied as a major local distributor has increased purchases in preparation for Ramadan, which starts on Feb. 27. This comes after a period of high inventory levels and low domestic prices. Demand from the UAE is now strengthening, and the stores are notably low on chicken cuts. The Platts CIF Middle East chicken breast was assessed at $2,990/mt on Jan. 15, reflecting a $100/mt recovery from November 2024 low. Prices increased further to close to $3,070/mt on Jan. 20.

What's next? With Ramadan on the horizon, the UAE is poised for heightened demand, prompting importers to seek additional chicken supplies from Brazilian exporters. This surge in demand is expected to continue influencing price trends, particularly as importers maintain lower stock levels. The market dynamics indicate a potential price increase as the UAE's demand grows, especially for chicken breast meat -- an essential import for the region. The impact of these purchases will be felt in the coming weeks as Ramadan approaches, potentially stabilizing or increasing prices further.

5. Terrana's strategic expansion under new leadership

What's happening? Brazilian fuel distributor Terrana, acquired by Branson Holdings in December 2024, is planning to expand in the ethanol market, invest in bunker fuel operations and enter the retail business, new owner Paulo Narcélio Simões do Amaral told Commodity Insights. The company ranks eighth among top distributors in Southeast and Center-West Brazil. Terrana sold 966,360 cu m of fuel from January to November 2024, slightly down from the previous year. Brazilian officials impose no restrictions on Russian diesel imports. However, some companies have previously refrained from purchasing Russian fuel due to internal compliance policies.

What's next? Amaral plans to invest in bunker fuel operations in Rio de Janeiro and strengthen Terrana's position in the São Paulo anhydrous ethanol market. He is also eyeing verticalization opportunities, especially partnerships with unbranded gas stations.

Reporting and analysis by Robert Perkins, Laura Huchzermeyer, Jeff Mower, Sophie Dyas, Graham Style, Beatriz Baltieri, Isabela Rocha and Vinicius Damazio.