(EnergyAsia, April 12 2012, Thursday) — S&P held a media roundtable in Singapore last month featuring three experts to discuss the commodities markets and the economies of China, Japan and India.

Jodie Gunzberg, S&P Indices’ Director of Commodity Indices, Mike Davis, ICE Futures Europe’s Director of Market Development, and Nicholas Kennedy, NYSE Liffe’s Head of Business Development for Commodity Derivatives, shared their thoughts on the outlook for various commodities and Asian economies in the coming year.

China: What growth slowdown means China’s red-hot economy is slowing down as it increases its government shifts the country’s focus towards domestic consumption and reduce dependence on export.

Commodity prices have fallen broadly as more evidence of China’s slowing economy has renewed concerns about its future demand for everything from oil and copper to soybeans.

As well, investors are concerned about global and regional developments including political turbulence in the Middle East, India’s economic and energy policy changes and the Fukushima nuclear disaster, and their impacts on the commodity and financial markets, said Ms Gunzberg.

China’s rapid growth has slowed in the past year because of government measures designed to prevent the economy from overheating.

Ms Gunzberg observed that China’s economic growth had slowed to 8.9% in the final quarter of 2011, compared with a double-digit rate of expansion the previous year. For 2012, the government has set a growth target of 7.5%.

“I don’t think we’re going to see any real broad sell-off,” she said.

“I think that people are going to look more at these little pullbacks as buying opportunities than anything else.”

Oil prices have been hovering in a tight range, bound on the one hand by concerns about the weak state of the global economy, China’s slowdown and Saudi Arabia’s promise to step up production, and on the other, by worries over potential conflicts in the Middle East and Iran’s nuclear programme.

Ms Gunzberg said a cooling Chinese economy will translate into slower rates of increase of investment in infrastructure and electricity, and weaker imports of oil, gas, coal, iron ore, and other commodities from Brazil, Australia, the Middle East and other major commodity suppliers.

Japan: Worries over power supply and demand Japan has been sweating over its domestic power sector since last year’s devastating earthquake and tsunami that destroyed Tokyo Electric Power Company’s Fukushima Daiichi nuclear plant, prompting the government to shutdown almost all the country’s 54 reactors.  Nuclear power supplies nearly 30% of the country’s electricity.

With summer approaching, Japan’s utilities are worried that a surge increase in the usage of air-conditioning could stretch power supplies.

Mr Davis said Japan has started to turn to Canada to provide a stable supply of energy resources, especially natural gas and coal. Resource-poor Japan imports almost all of its energy including oil, gas and coal.

Already the world’s largest LNG importer, Japan is looking to increase its purchases from Australia, Indonesia and Qatar.

Mr Davies said: “Demand for LNG is rising sharply in Japan as an alternative to atomic power in the wake of the nuclear crisis and the Japanese government has been in talks with US administration on importing the cleaner-burning fuel from the US mainland.”

India: Going nuclear-way

Nuclear energy is set to play a major role in India’s search for supplies to address both energy supply as well as climate concerns, said Mr Davis.

The Indian government will not be able to dismiss the nuclear option given the country’s growing energy needs and limited energy resources available.

He said recent protests against the Kudankulam power project in the southern state of Tamil Nadu were inspired by national and international groups opposed to nuclear power in the wake of the Fukushima disaster.

He observed that Indian Prime Minister Manmohan Singh has reiterated support for nuclear energy by calling on the industry to address safety and security issues to win public support.