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- US President Trump signed an executive order last week to push forward with plans to impose a 25% tariff on imports of steel and 10% tariff on imports on aluminium.
- Canada and Mexico are expected to be exempt from the tariffs.
- China and Europe are threatening retaliation if Trump decides to push ahead with the plan.
- China's government has already been put under pressure by its metals sector to retaliate by targeting US coal.
- The US's soybean sector has also been highlighted as being a prime target for Chinese retaliation against Trump's plan.
- The world's largest sugar merchant, Brazil's Copersucar, has indicated that they expect sugar output from Brazil's sugarcane crop that starts April to fall by 5m tonnes due to mills putting more cane to ethanol production as opposed to sugar production.
- Brazilian mills are tending to prefer ethanol production due to good prices and strong local demand.
- Ethanol is benefiting from a large price gap compared to gasoline which is leading to flex fuel car owners to opt for biofuel at pumps.
- According to government data, Malaysia's end-of-February palm oil inventories were at a 4-month low due to a decline in production relative to export volumes. Stocks fell almost 3% in February to 2.48m tonnes, supporting benchmark palm oil prices.
- According to the chairman of Chinese state-owned mill Fujian Sangang Group Co Ltd, exports of steel from China are likely to continue to fall this year due to strong domestic demand and a decrease in capacity as a result of government-imposed restrictions which are in place in an effort to meet environmental commitments.
- Chinese steel exports dropped 30.5% last year to 75.43m tonnes, with total production for 2017 having reached 831.73m tonnes.
- Chinese demand in the property, infrastructure, manufacturing and shipbuilding sectors is expected to increase over the coming months.
- Shanghai aluminium prices have recorded their lowest closing price in 14 months, 3 days before the winter output curbs on Chinese smelters are set to end. Concerns over the impact of US trade tariffs on the aluminium and steel sectors are also weighing on prices. The most traded May aluminium contract on the SHFE has closed at $2,223.33 a tonne, the lowest close since January 2017.
Energy - UK
- British wholesale gas prices have risen today ahead of forecasted colder temperatures whilst stocks remain depleted.
- According to industry group Energy UK, despite February being the shortest month of the year, a record 668,000 British energy customers switched suppliers last month.
- The data comes as Britain's energy firms continue to come under increasing pressure to reduce bills and Ofgem prepares to issue a price cap on the most widely used tariffs.
- Although the data does not show which companies gained or lost customers, it does show that almost half the switches were between large suppliers, and almost a quarter of switches were from larger firms to smaller companies.
Energy - International
- Iran's oil minister Bijan Zanganeh has hinted that OPEC could agree as early as June to start easing the current oil production curbs in 2019. Zanganeh also said that Iran would want to keep crude prices at around the $60 benchmark in order to keep US shale production under control.
- Last week saw US energy companies decrease their rig count for the first time in 7 weeks. Oil prices have however now given up their earlier gains following the rig count news from Baker Hughes as a result of sustained rising of US output. Both Brent and WTI are down 0.2% from their close last week at $65.38 and $61.91, respectively.
- Day-ahead spot European electricity prices have risen today on the back of forecasts for increased demand due to colder weather and a drop off in wind power generation in France.
- Russia and Serbia are back in discussions about building a pipeline through Serbia which would enable Russia's Gazprom to step up its supplies of gas to Europe by by-passing Ukraine.
- LNG prices jumped last week following sudden shortages triggered by the Papua New Guinean earthquake at the end of the month coming at the same time as a demand spike in Europe due to extreme cold weather. It is expected that ExxonMobil's export facility will remain out of action for weeks following the company having declared force majeure on its exports as it assesses damage to the remote exporting facility and over 700km of pipeline.