In this week's Market Movers Europe with Maria-Eleni Tsimeki:
- Red Sea escalation raises concerns over European supply
- Plastics exporters halt trade on freight chaos
- French reactor maintenance season gets underway
In oil, more frequent attacks on Red Sea shipping are forcing companies to reroute around South Africa and raising concerns over supplies of oil to Europe – not least as US refining also experiences winter outages.
Threats to Red Sea transit are hampering chemicals and dry bulk shipping. Plastics producers are reeling from the high cost and limited availability of vessel and container space.
Taiwan’s Formosa Plastic Corp. has stopped all CIF exports to Europe and Turkey, and US PVC producer Westlake said it will seek a rise in delivered prices to compensate for the jump in freight costs.
Meanwhile, shipping sources predict increased dry bulk diversions around the Cape of Good Hope, with about 20% of grain cargoes already opting for this route.
In France, the nuclear maintenance season is getting underway with two reactors about to ramp down for major six-month-long overhauls.
This will reduce nuclear availability from a three-year-high reached mid-January, but five other reactors are set to return before further maintenance starts in February.
Meanwhile a forecast swing to milder and windier weather was seen pulling spot power prices down, adding bearish momentum to European gas and carbon prices.
I’m Marilena Tsimeki, thank you for kicking off your Monday with S&P Global Commodity Insights.