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Price of Cement is up 8% to N2,700 while Brent Slipped to $56.34pb

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Friday, October 13, 2017 / 8:40 AM /FDC


The retail price of cement is up 8% to N2,700. This is not unusual because at this time of the year, the demand for cement surges due to increased real estate activity. In addition, the FGN’s increased capex of N2.2trn in 2017 means more civil works and construction.

 

In the global markets, brent slipped to $56.34pb due to concerns that rising U.S production will offset OPEC’s efforts at maintaining market stability.

 

Burning Economic Issues  

·        Oil price down 1.07% to $56.34pb

·
        Cement price jumps 8% to N2700

·
        IMF warns against excessive foreign borrowing

·
        Naira flat at N363/$ and N475/£

·
        Diesel retail price rises to N200/ltr

 

Economic News  


The Good  

·        OPEC’s determined to curb excess supplies

The Bad

·        High diesel price will stoke inflation

·        Cement price up to N2,700 per bag

Power Generation analysis & Impact 
October 8th: Average power output sent was 3486MWh/hour (up 312MWh/h)


·       
Gas constraint was 302.4MW; frequency management constraint due to loss of DisCo feeders was 2169.6MW

·       
Estimated loss: N1.187bn (annualised at N433.25bn /$1.21bn)

·       
DisCos’ inability to pick load is the largest constraint to improved service delivery

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Domestic Commodity Prices Movement
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Stock Market 
·        NSE ASI 0.22% to 36,732.24pts

·       
Consumer goods sub index 0.61% to 933.24pts


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Oil Prices
·        Brent crude 1.07% to $56.34pb

·       
EIA reported a 2.8mb drawdown in U.S. crude Inventories

·       
Refineries in Texas recover from hurricane-related shutdowns

·       
De facto OPEC leader - Saudi Arabia determined to reduce monthly crude exports

·       
On expectations that market rebalancing is underway 

Oil Markets Today
 

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Outlook – Oil Prices
   
·        Oil prices expected to maintain upward trend

·       
Supply & demand gap is expected to narrow further in coming months

·       
Amid a surge in global demand growth

·     
OPEC’s Secretary-General seeks U.S. shale producers cooperation to help cut excess global supplies


Outlook – Agric Prices 

Grains 
  

·        Markets await the release of the USDA crop report

·       
Prices expected to trade lower on forecasts of rising inventories and weak demand

Soft

Sugar
·        Demand from bulk consumers will drive price movement

Cocoa 
·        Prices will trade slightly higher due to lower than expected cocoa deliveries in Ivory Coast

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Related News
1.       Domestic Price of Palm Oil Has Declined by 25% in 12 Months
2.      FG to Bring Down the Price of a 50kg Bag of Rice to N9,000 Within a Month
3.      Price of Cement Dropped by 3.8% to N2,500 per Bag
4.      Oil Prices Climbed Sharply to a 2-year High of $59pb
5.      Cashew Nut Exports Increased Significantly by 463% to $37m in Q2’17
6.      Volatile Oil Prices in August
7.      Oil Prices Hovered Around $55pb Ahead of OPEC Meeting
8.     Higher Price of Oil Has More Than Compensated for Any Cocoa Shortfalls
9.      Oil Price Up to $54.16pb Due to Lower OPEC Production
10.  BUA Group Additional Investment Likely to Drive Cement Price Downwards
11.   Commodities Market Exports – Brent Crude Traded Bullish in the 2nd Half of August
12.  Intermittent Power Supply In Nigeria Has Become An Intractable Problem
13.  Nigeria’s Dependence on Imported Sugar will Reduce as Dangote’s $450mn Initiative Takes off
14.  Domestic Commodity Prices Remained Flat Despite August Break, Harvest Season & Improved Logistics
15.   US Shale Production to Climb to 6.14mbpd
16.  Bonny Light Slipped to $50.26pb Following Slowdown in Chinese Refining
17.   Brent Crude Now Trading Above July 2017 Average
18.  Domestic Commodity Prices Remain Static In Spite of MPC Hold Decision
19.  Price of Rice Still High at N18,500 per bag

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