Subscribe

If you'd like our market updates to be sent straight to your inbox, subscribe here.

line 3.png

General news

  • Bitcoin has risen above $11,000 for the first time.
    • Bitcoin has so far now risen by more than 900% in 2017, having traded at around $1,000 at the beginning of the year.
    • The soaring price, volumes and volatility of Bitcoin trading is making many of the more traditional marketplaces uneasy.
    • IG for example has suspended the trading of some of its Bitcoin derivatives.
  • Britain and the EU appear to be closing in on agreeing a Brexit deal. Theresa May is in Brussels today with the aims of signing off a draft joint text with the European Commission president, Jean-Claude Juncker.
  • The Bank of England has said that if the UK left the EU in a “disorderly” Brexit, the UK’s banks would still be able to cope. This follows all of the UK’s biggest lenders passing the Bank of England’s stress tests for the first time since the financial crisis.
  • North Korea has tested an intercontinental ballistic missile (ICBM) which it claims can reach the whole of continental US.
  • According to Business Solutions, nearly half of UK businesses aren’t planning on investing in EV technologies until after 2025.

Agriculture

  • French consultancy Strategie Gains has said it expects EU rapeseed production to reach as much as 22.6m tonnes next season in 2018/19, up from an estimated 21.7m in 2017/18. Rapeseed is the most widely grown crop in the EU and is used to produce edible oil and is also used in livestock feed and biodiesel.
  • According to the US Department of Agriculture (USDA), US farmers are likely to plant a record 91m acres of land with soybeans next year (compared to 90.2 in 2017) and boost the area devoted to planting most other crops. If the USDA’s forecasts are realised, 2018 will likely be another year of bumper supply, prolonging a global glut of grains that has kept soybean and corn prices depressed for years.
  • According to leading agriculture consultancy SovEcon, Russia is expected to produce another large grain crop in 2018. Russia is a major global wheat exporter and if SovEcon’s predictions of a 128.2m tonne grain harvest in 2018 materialise, global grain prices are likely to find themselves under even further pressure.
  • Robusta coffee prices hit a 17-month low last week. There are increasing concerns that the market will struggle to “hold on” at these levels, especially with the new Vietnam crop coming to market. Robusta coffee for January delivery is currently valued at around $1,749 a tonne.
  • Qatar has moved to defy trade cuts imposed on them by Saudi Arabia, the UAE, Bahrain and Egypt by building their own dairy industry.
    • According to the chief executive of farming company Baladna, Qatar is looking to be self-sufficient in milk by June 2018.
    • Raising cows in near 50°C heat is however challenging, and the process relies heavily on technology to keep the cattle cool. This however comes at a cost and the process is only achievable thanks to the deep pockets of the Qatari farming company owners.
  • A top EU official has called on the Puglia region of Italy to do more to prevent the spreading of a bacterium called Xylella fastidiosa which has ravaged olive groves in the region. No treatment currently exists for the bacterium and it has presented the EU with its biggest phytosanitary crisis for years.

Metals

  • Meetings last week between Glencore, other major cobalt producers and Volkswagen have ended without a deal. Volkswagen is the world’s largest automaker and is seeking to secure long-term supplies of cobalt to make batteries for EVs.
  • There are rumours that Rio Tinto is looking at buying into Sociedad Quimica y Minera de Chile, a $15bn lithium producer. A 32% stake in the company is up for grabs, and Rio is favourite to buy the stake following the set-up of Rio Tinto Ventures, an internal unit which focuses on identifying and investing in the minerals and resources the world is expected to need in the next 10-15 years.
  • Following concerns over the ethical and environmental implications of the mining of materials used in EVs, ten of the world’s leading carmakers have pledged to address the issues by integrating supply criteria into their supply chain processes. It is likely that as manufacturers move to ensure their raw materials supplies meet ethical and environmental requirements, demand for high quality metals such as iron ore, aluminium and copper will likely be boosted.
  • China’s drive to focus on the rental market is threatening demand for metals including iron ore, steel, copper and nickel. According to investment bank Liberium, this, coupled by an oversupply of empty housing, could decrease iron ore demand by 4.3%, and copper demand by 2.1%.
  • Dalradian Resources, a small gold miner operating in a remote part of Northern Ireland, has secured just under £45m towards developing what it claims to be one of the world’s largest gold deposits.

Energy - UK 

  • Last week saw UK wholesale electricity prices supported by bullish fuel prices and the expectation of colder weather which influenced prompt and nearer dated winter prices.
  • Lancashire County Council is to install 150 EV charging points as part of Chargemaster’s EV charging network POLAR.
  • The government has announced that the Feed-in Tariff (FiT) scheme, which pays people to create their own sustainable, clean electricity, is to be closed by April 2019.
  • Envision Energy has joined up with the Met Office, the European Centre for Medium Range Weather Forecasts and Aarhus University to advance research in renewable energy forecasting. The collaboration aims to increase the accuracy of energy resource assessments and improve the ability of the grid to plan for renewable energy inputs.
  • The Scottish government has awarded £2.6m to 12 green energy projects as part of its Low Carbon Infrastructure Transition Programme.
  • According to the Nuclear Industry Association, the nuclear power sector contributed £6.4bn to the UK economy last year.

Energy - International

Oil

  • OPEC agreed at last week’s meeting in Vienna to extend the 1.8m bpd oil production cuts from March 2018 to the end of 2018.
    • OPEC controls 60% of global oak production and has 24 member countries.
    • Although OPEC members Libya and Nigeria were excluded from the agreement on the basis of internal conflict, and who struggle to maintain output in any case. The African nations have pledged to keep production next year at 2017 levels.
    • The extension comes despite Russia’s concerns that price recovery beyond $60 could trigger a wave of rival supplies. In other words – Russia are concerned that OPEC could end up becoming a victim of its own success.
    • The deal sent oil prices upwards with Brent trading above $64 on Friday.
    • The production cuts will next be revised mid-2018.
  • China National Petroleum Corp, China’s largest energy group, has reported that it has discovered a new oil field in northwest China. The group has reported that the Junggar Basin holds 520m tonnes of proven crude reserves.
  • According to Oil & Gas UK, more than 200 North Sea rigs and 2,500 wells are to be decommissioned by 2025. The majority of fields where projects are being decommissioned are on the UK Continental Shelf.

Other

  • According to the Costa Rican Institute of Electricity, Costa Rica has successfully achieved 300 days of 100% renewable energy this year. Costa Rica currently generates most of its power (78%) from hydropower, with some also from wind, geothermal, biomass and solar.
  • According to the International Energy Agency (IEA), Denmark is on track to meet its goals of generating at least half of its total energy consumption through renewables by 2030, and of becoming independent of fossil fuels by 2050.
  • Members of the European Parliament (MEPs) have voted to reduce energy use by the end of 2030 by 40%. Each nation will have its own national efficiency target set based on the overall reduction target.