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General news

  • Trade tensions between the US and China continue to rise following the unveiling of Trump’s plan to impose a 25% tariff on as much as $60bn of annual imports from China.

    • The full list of products affected is expected to be released by next week.

    • China have retaliated by outlining plans to introduce tariffs on 128 products, account for around $3bn of US imports, ranging from steel pipes and recycled aluminium to fresh fruit and pork.

Agriculture

  • Beijing has decided against imposing tariffs on US soybeans, excluding it for the time-being from the list of levied products announced on Friday.
    • Although imposing a tariff on US soybeans would have a big impact on US farmers, many of which are in states which voted for Trump, doing so would also have a substantial negative impact on Chinese consumers.
    • China relied on the US for 37% of its soybean demand last year.
    • It is likely however that if a “true trade war” were to unfold, China would resort to levying soybeans.

Metals

  • Analysts at Goldman Sachs are forecasting that the price of copper will rise to $8,000 tonnes this year, up over 15% from the current $6,950 price tag.
    • There has been little investment in new mines over the past few years since the crash in commodity prices.
    • Demand for copper continues to increase thanks to its use in renewable energy and electric car charging.
    • The main risk to demand comes from any slowdown in Chinese demand, where 40% of the world’s copper is currently consumed.

Energy - UK 

  • According to the UK Energy Research Centre (UKERC) the UK should be focusing on investing on demand side response measures as well as energy efficiency measures in order to boost energy security.

  • Rolls-Royce has announced it is to team up with UK-based start-up Superdielectrics to develop the next generation of high energy storage technology. The technology makes use of polymers to increase the electrical storage capabilities of capacitors which could rival the capacity and charging rate of traditional lithium-ion batteries.

Energy - International

Oil

  • Oil has had its best week in almost 8 months following a week of heightened geopolitical risk and a surprise decline in US stockpiles.
    • Trump’s appointment of John Bolton as his new national security adviser has heightened the likelihood of US sanctions being imposed against Iran.
    • Tensions between the US and oil-rich Venezuela are also rising following Washington’s decision to prohibit all American trade in the petro, the digital currency launched by Venezuela earlier this year.
    • Brent settled at $70.45 on Friday, closing in on the 2018 high of $71.28 set in January, whilst WTI settled at $65.88 having had its best week since last summer.
  • Ian Taylor, the chairman of the world’s largest independent oil trader Vitol, has warned that OPEC and Russia will need to extend their production cuts into next year if the price of oil is to be kept above the $60 benchmark.

Other

  • The latest research from Bloomberg New Energy Finance (BNEF) indicates that although the global demand for LNG will rise to 305MMtpa this year, and to 490MMTpa by 2030, driven by environmental measures in China, reduced domestic gas production in Europe and increased power generation in South and Southeast Asia.