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Nuclear factors and demand in Germany are on the rise
The projections of a daily increase in demand in Germany on Tuesday boosted European prices for prompt power, while nuclear outages in France and Switzerland created short-term uncertainty regarding timely restarts. According to LSEG Research, the higher wind generation volume and thermal availability weighed negatively. By 8am GMT on Wednesday, the French baseload contract was 79 euros (92.33 dollars) per megawatt-hour (MWh), up 36.2% from the previous close. The German equivalent gained 6%, to 79.5 euros/MWh. The power consumption in Germany will rise by 1.7 gigawatts to 53.1 GW, but in France it is expected to drop by 400 MW. On a broader scale, the region including Switzerland and Austria saw a daily increase of 1.4 GW, to 110.3 GW. The German wind energy output was forecast to increase by 2.9 GW, to 22.4 GW. The Belleville 2 reactor in France went offline Monday afternoon due to faulty signals detected in the turbine control rooms located in the nonnuclear portion of the installation. Repair checks are currently underway, according to EDF, the operator. The French nuclear capacity increased by 3 percentage points overnight to 75%. The operator of Switzerland's largest reactor in Leibstadt said that the plant will be restarted in a controlled manner on Tuesday and Wednesday following a minor repair. The load had already been reduced by 875MW since Friday. The German baseload power for the year ahead was down by 0.4% to 85.2 euros/MWh. However, its French counterpart was not traded after closing at 62.2 euro. The benchmark European carbon contract fell 0.4%, to 68.92 euro per metric ton. It had traded mainly in the 70-72 euros range last week. Veyt, a consultancy, saw the market trading sideways in this week's report but noted that there was some downward pressure due to higher wind speeds expected for late July which favor low-carbon energy generation. (Reporting and editing by Susan Fenton, Vera Eckert, Forrest Crellin)
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Toxic algae bloom off South Australia devastates marine life, tourism
Peter Malinauskas, the state premier, called Tuesday's massive algae bloom off South Australia a "natural catastrophe" because it has destroyed hundreds of marine species and affected local tourism and fishing. According to environmental officials, the algal bloom was first detected in march and covers an area of 4,500 square kilometers (1,737 square mile). It has also been aggravated due to rising ocean temperatures. Malinauskas, a national broadcaster for ABC News Breakfast, said that "over 400 different marine species have died or been affected by this algal bloom." This is a natural catastrophe and it should be recognized as such. Malinauskas has announced a support package of A$14million ($9.11million) to combat the outbreak. This package matches that offered by the federal government. The A$28 million combined would help with clean-up, research and business support. According to the environment department of Washington state, the toxic bloom is caused by an overgrowth of Karenia micromotoi algae, which damages fish gills while sucking oxygen from the water. A marine heatwave in 2024, which saw sea temperatures rise by about 2,5 degrees Celsius (36,5 degrees Fahrenheit), contributed to the growth of this disease. Local media reported that the bloom had a negative impact on tourism, and caused oyster and mussel farming to be temporarily closed due to an algal toxin in water. The iNaturalist application has recorded over 13,850 dead animals including sharks, rays, and invertebrates. Murray Watt, the federal Environment Minister, said that on Monday algal blooms were a "very severe environmental event." However he did not declare it a disaster of national proportions which would have allowed for more federal assistance.
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Shanghai aluminium reaches nearly nine-month high amid better China demand
On Tuesday, the most traded aluminium contract at the Shanghai Futures Exchange hit its highest level since November. This could be due to a better demand from China for metals as the authorities promise to stabilize industrial growth including metals. SHFE aluminium rose by 0.75% at 20,900 yuan (2,913.26) per ton as of 0702 GMT. This is the highest price since November 12. The fundamentals of aluminum are among the strongest in China. It is the only metal that has a maximum smelting capability of 45 million tons. Alumina's price surge also helped, according to a Shanghai-based futures company metals analyst. SHFE alumina rose 4.23%, to 3,452 Yuan per ton. This is the highest level since February 26. Aluminium stocks in the SHFE monitored warehouses also increased. Totaled 108,822 tonnes by July 18 or the lowest level since February 2024, despite three consecutive weeks of rebound. The Chinese government's plans to stabilize industrial growth, and the opening of the massive Tibet hydropower station are all positive signs for the metals markets. In addition, the prospects of metals demand in the country will boost the sentiment. Analysts added that it is unclear just how much demand there will be. An analyst in Shanghai echoed this view and said, "Despite all the uncertainty, such news seems definite and positive. This may support the commodities market for a little while." China started building the largest hydropower project in the world on the eastern edge of the Tibetan Plateau. The dam is estimated to cost at least $170 billion. The price of nickel rose 1.51% at SHFE to 123.530 yuan per ton. Tin increased 1.11%, to 268,520, and zinc was up 0.7%, to 22,945, the highest level since April 2. Copper was up 0.61%, to 79.740, while lead fell 0.21%, to 16,900. The London Metals Exchange saw the three-month price of zinc rise 0.14%, to $2.842.5 per ton. Tin rose 0.1%, to $33,845, while copper increased 0.07%, to $9,866.5. Lead fell by 0.55%, to $2.003.5. Nickel dropped 0.18%, to $15,495. Aliuminium was flat at $2.645.5. Click or to see the latest news in metals, and other related stories.
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China's coal prices have again reached their daily limit after a discussion about government mine inspections
The prices of coking coal in China reached their maximum for the second consecutive session on Tuesday amid market talk about possible government inspections at China's main coal production hubs, which could lead to supply disruptions. The Dalian Commodity Exchange's most active China coking-coal contract jumped almost 8%, reaching its highest price in March at 1,048.5 Yuan ($146.19). Simon Wu, senior consultant at Wood Mackenzie, stated that a document purporting to be from National Bureau of Energy, calling for inspections of coal mines in 8 provinces, to determine if production exceeded licensed capacities, played a role in the rise in price. He said that this could reduce the actual supply on the market. Could not verify the authenticity a document circulated on social media by the Henan Provincial Government which contained inspection orders issued by the NBE. Someone answered a phone call at a number listed in the document, saying that they were following the instructions of the NBE. They asked not to call the number again. The NBE didn't immediately respond to our request for comment. Prices of coking coal have risen by 28% in July, after a President Xi Jinping's visit to Shanxi earlier this month, China’s largest coal producing hub, sparked speculations about a new wave of supply reform.
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Spain's demand for gas is on the rise as power plants are burning more since the blackout
Since a major blackout in April 28, the gas grid operator Enagas reported that Spain increased its gas consumption to produce electricity. The grid voltage is more stable with conventional power plants, such as gas-fired combined cycles plants. Enagas reported that the overall gas demand in the country rose by 5.6% during the first half of this year. This was boosted by an increase of 41.2% in the demand for electricity. Exports of gas also increased during the period. This was mainly due to France filling its underground storage. Spain does not produce gas, but it re-exports natural gas from other European countries. Enagas' Chief Executive Arturo Gonzalo stated on Tuesday that "Gas Infrastructure plays a crucial role in ensuring security of the energy system in Spain and Europe and enabling energy transition." He said that Spain's underground gas storage tanks are more than 75% full. This is higher than the minimum of 64% set by the European Commission for July 2025. Reporting by Pietro Lombardi. (Editing by Inti landauro and Mark Potter.
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Statkraft, a Norwegian utility, reports a quarterly loss of $640 million after impairments
Statkraft, Norway's largest utility and state-owned company, announced a larger quarterly net loss Tuesday as lower expectations of Nordic power prices, along with ongoing restructuring, led it to write off the value of several assets. The net loss in the period April-June widened from 992 millions crowns to 6.5 billion Norwegian Crowns ($638.56 Million) from the second quarter 2024. Statkraft, who has slowed down its growth plans this year due to rising costs, announced on Tuesday that it would prioritise investment in short-term profitable opportunities. Birgitte Vartdal, CEO of Statkraft, said that "given the current market conditions and geopolitical reality, as well as Statkraft's high level of activity and recent investment, we are adapting our strategic ambitions." Fitch, the ratings agency, cut Statkraft's rating this month by one notch from BBB+ to BBB+. The reason given was a weakening of performance and financial metrics. In the second quarter of 2010, the company recorded impairments totaling 6.3 billion crowns, with 2.5 billion crowns relating to Swedish wind power assets. The remaining 0.5 billion crowns was attributed to Norwegian wind farms. Statkraft reported that other impairments were related to investments in battery energy storage systems in Britain, joint-venture hydropower plants located in Chile, and the group's Corporate Development Portfolio. The EBITDA (earnings before interest, taxes, depreciation, and amortization) has fallen to 4.5 billion crowns from 6.5 billion crowns a year earlier as lower electricity prices have outweighed increased production. Statkraft reported that Nordic power prices were 26.5 euros/MWh on average in the third quarter. This is down from 35.3 euros/MWh one year earlier. $1 = 10.1791 Norwegian Crowns (Reporting and editing by Louise Rasmussen and Kirby Donovan).
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Indonesia Mining Ministry proposes 18 Development Projects for Danantara Funding
The Indonesian mining ministry has compiled a list with 18 projects totaling $38,6 billion for the development of natural resources in Indonesia. It handed it to Danantara Indonesia, a sovereign wealth fund on Tuesday to be considered for investment. Danantara, launched earlier this year by Indonesian President Prabowo Subito, is his main vehicle for achieving his 8% target of economic growth by 2029. It does so by managing the shares of all state-owned companies and reinvesting dividends into commercial projects. Prabowo's economic agenda includes the development and acceleration Indonesia's processing industries. Energy and Mineral Resources minister Bahlil lahadalia stated that the fund has the capability to finance and manage projects. Bahlil, who spoke at the ceremony, said that the priority projects included eight projects for processing minerals and coal. Two of the projects support energy security. The rest are energy transition projects and projects involving the processing and processing of agricultural and fishery products. The government has carried out preliminary studies on the projects and passed them to Danantara, for further evaluation and implementation. Officials from the ministry said that amongst other projects, there are oil refineries, storage facilities, solar panel production plants, jet fuel biofuels and iron and alumina melting plants. Rosan Roeslani, CEO of Danantara which has recently secured a credit line worth $10 billion, told reporters that the fund will only invest in projects if they fit its investment criteria. Rosan stated that "the financing can come from Danantara or state-owned companies...We can even invite domestic and foreign private companies to ensure we can use the best technology."
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UK greenlights Sizewell C nuclear plant after La Caisse investment
The final approval for the Sizewell C nuclear power plant in eastern England, worth 51 billion pounds (38 billion pounds), was given by Britain on Tuesday. This came after the company secured investments from British and foreign investors including the Canadian pension fund La Caisse. The deal will see the British government as the biggest shareholder with 44.9%, La Caisse holding 20%, UK energy company Centrica 15%, and London's Amber Infrastructure acquiring an initial 7.6%. This will join France's EDF, which has already announced its 12.5% share. Britain must build new nuclear power plants to replace the aging fleet of its existing reactors, improve energy security, meet its climate goals and create new job opportunities. In a recent statement, Finance Minister Rachel Reeves stated that "delivering next-generation clean power owned by the public is essential to our energy security." After months of speculation, the announcement that La Caisse is the second largest shareholder was a pleasant surprise. Brookfield I was in a prime position to invest. Sizewell is the only new nuclear power plant to be built in Britain for more than 20 years, following Hinkley Point C, owned by EDF, which has experienced delays and cost overruns. It will not be operational until 2030. Sizewell C, originally proposed by EDF in early 2010, was to be developed with China General Nuclear Power Group. However, the UK government purchased the Chinese firm’s stake in 2022 due to security concerns. EDF, a French company, has announced that it will invest around 1.1 billion pounds at Sizewell. Centrica's statement confirms its commitment to 1.3 billion pounds of construction funding. In a government statement, it was stated that the National Wealth Fund of Britain would provide a majority of the debt financing for the project. This will be accompanied by a guarantee provided by Bpifrance Assurance Export, France's export credit agency.
Asian stocks rise as investors focus on tariff negotiations and earnings
Investors took note of the tariff negotiations between America and its trading partners, while Asian stock markets remained near their four-year high on Tuesday. They were buoyed up by Wall Street's record closing high in advance of a series of corporate earnings.
After a weekend election in which the ruling coalition lost in the upper house elections but Prime Minister Shigeru ishiba pledged to stay in his position, the Japanese markets have returned to activity.
Japanese shares briefly rose at the opening before trading modestly higher. Bonds had a muted response as the results of the elections were already priced in, and not as bad for investors as they had anticipated. The yen rose 1% on Sunday, recouping losses from previous weeks. It was little changed on Tuesday at 147.46 to the dollar.
Kristina Clifon, economist at Commonwealth Bank of Australia said that the weakening of Ishiba’s leadership would open the door for more fiscal expansion, which will be negative for Japanese assets including the yen.
The bottom line is that the yields on longer-term Japanese government bonds and JPY could fall if worries about Japan's fiscal expenditures intensify.
MSCI's broadest Asia-Pacific share index outside Japan reached its highest level in October 2021 during early Asian hours, but last changed little. The index has risen by nearly 16% in the last year.
Alphabet, and other megacaps, have lifted the S&P 500 to record highs overnight, ahead of a flurry of earnings reports due this week.
Investors have focused on tariff negotiations in advance of the deadline of August 1, with the European Union exploring an broader range of possible countermeasures to the United States, as the prospects of an acceptable agreement with Washington diminish.
CBA's Clifton says that the EU and Japan are the two most important countries for global growth.
Clifton noted that the USD's reaction to trade deals announced with these countries will depend on their details. The dollar could also fall against the British pound and the euro.
The euro was unchanged at $1.1689 after gaining 0.5% the previous session, but it is still far from the four-year high that it reached at the beginning of the month. Investors are looking for alternatives to U.S. stocks that have been hurt by tariff uncertainty. The euro is up 13% in 2018.
The dollar index measured against six key currencies was 97.905.
Investors have been on tenterhooks for the past few weeks due to the rumblings about whether President Donald Trump would fire Fed chair Jerome Powell.
Trump was on the verge of firing Powell last week but backtracked, citing the likely market disruption.
U.S. Treasury secretary Scott Bessent said on Monday that the Federal Reserve as a whole needed to be examined and whether or not it was successful. This further exacerbated concerns about the independence of U.S. Central Bank.
It is expected that the Fed will hold rates at their July meeting, but may lower them later in the year. The market will focus on Powell's address on Tuesday to get clues as to when the Fed may ease policy.
Goldman Sachs' strategists predict that the Fed will deliver three consecutive 25 basis-point reductions starting in September "provided inflation expectation remains in check amid concerns about Fed independence."
Oil prices in commodities fell on fears that a trade war between the U.S., the European Union and other major oil consumers would curb fuel demand.
Brent crude futures dropped 0.35% to $68.97 per barrel while U.S. West Texas intermediate crude fell 0.31% to $66.49 per barrel.
(source: Reuters)