Watch: Market Movers Americas, July 18-22: Surging demand sends US power, freight prices to peak levels

In this week's Market Movers: Key US steel industry leaders testify in the Congressional Steel Caucus, an ongoing heat wave sends Texas power demand to all-time highs, and higher demand from European crude buyers pushes Aframax rates to two-years highs.

Starting in metals, US steel industry executives will be on Capitol Hill this week to testify as part of a Congressional Steel Caucus hearing on July 20. Steelmakers and union officials will discuss the state of the domestic steel industry and key policy priorities for Congress and the Biden administration. Witnesses are expected to include leadership from Cleveland-Cliffs, Nucor, US Steel, Commercial Metals Company, Zekelman Industries and the United Steelworkers union.

Now let's look at power. After the Electric Reliability Council of Texas market set eight all-time records for power demand since June 12, more challenges now loom, as record-breaking peakloads are forecast this week. Also, ERCOT forecast wind output to fall to less than 5.7 gigawatts, about one-sixth of ERCOT's 35.7-gigawatt nameplate capacity, and thermal generation outages caused by nonstop operation during the extended heat wave could further diminish supply. These factors could boost real-time wholesale power prices to the 5,000 dollars per megawatt-hour systemwide offer cap, which happened for four hours last Wednesday. In Central Texas, Austin's high temperatures are forecast in triple digits for the week.

In shipping, freight for vessels carrying crude out of the US Gulf Coast, namely for the smaller-tonnage Aframaxes, continues to drive a great deal of volatility in the tanker market as increased demand for US crude to replace Russian barrels in Europe supports local tanker demand. Freight for the benchmark 70,000 metric-ton US Gulf Coast-UK Continent route jumped to over a two-year high last week at worldscale 245, or 45 dollars and 86 cents per metric ton. The market will watch this week to see if the elevated cargo inquiry levels seen last week will remain and send freight higher amid a slowly replenishing position list. This brings us to our social media question of the week: Will this surge in demand for US-origin crudes in Europe continue to impact these trade flows, and how high can freight rates go before Europe has to look elsewhere?

The Platts Atlas of Energy Transition is your map to the sustainable commodity markets of the future. You can explore the Atlas by visiting the address displayed on your screen. Thanks for kicking off your Monday with us and have a great week ahead.