In this week's highlights: Oil recovery expectations boosted by travel corridors; r-PET prices hit decade highs; and dry weather boosts global corn prices.
- Germany details new climate law
- Travel corridors add to recovery expectations
- Recycled-PET pricing hits 10-year highs
- Dry weather pushes global corn prices up
In this week's highlights: Oil recovery expectations boosted by travel corridors; r-PET prices hit decade highs; and dry weather boosts global corn prices.
But first, on Wednesday, the German government is set to detail a new climate law, lifting its target for emission cuts from 55% to 65% by 2030, and bringing its net-zero target forward to 2045. For the power sector, a tighter target will leave little room to burn coal beyond 2030, even if Germany's official coal phase out date remains 2038.
September's election result could force a revision of this date, given the Greens' strong showing in the polls. Last year saw the biggest decline in German carbon emissions on record, to 60% below 1990 levels. Bringing this down to 35%, however, remains a monumental challenge.
And that brings us to our social media question for the week: Will Germany achieve its emissions targets on time? Tweet us your thoughts using the hashtag #PlattsMM.
In oil, the focus is on growing expectations of demand recovery, as news on travel corridors brings long-awaited relief to the aviation sector and refiners, hamstrung by the collapse in jet fuel demand. This comes as numerous banks and market watchers have been revising upward their economic expectations, with Platts Analytics expecting Dated Brent crude to break above $70/barrel in early-summer, before easing back in the fourth quarter.
There are also growing indications of some OPEC+ countries growing blasé about production quotas, with Russia, Iraq and South Sudan under scrutiny. The topic is explored in the monthly Platts survey of OPEC+ production, out Monday. We'll hear views on all these topics and more when OPEC and the IEA release their monthly oil market reports, on Tuesday and Wednesday respectively.
Recycled polyethylene terephthalate clear flake prices hit fresh 10-year highs in the past week - at Eur1,250/mt FD Northwest Europe. And demand shows little sign of letting up amid tight post-consumer waste supply following summer 2020's notably low bottle demand due to limited tourism and events, and strong virgin PET pricing.
The market has moved to prompt pricing and delivery and this week recyclers will be putting offers out to the market for the second half of May, with early evidence suggesting they will be pushing for pricing around the highest level ever assessed by Platts, Eur1,295/mt back in May 2011.
And finally, dry weather during the corn planting campaign in the US and Brazil has resulted in lower-than-required soil moisture, generating delays in planting, and potentially undermining 2021-22 production and exports. In Brazil, around 50% of the corn crop was planted later than the advised period and persisting dryness in some regions may further undermine yields.
As a result, corn prices in Brazil and Ukraine have grown strongly from April 1 - by 30% in Brazil and 13% in Ukraine to May 6.
The US Department of Agriculture will release its World Agricultural Supply and Demand Estimates report May 12, with corn production in Brazil expected to be lowered from the current estimated 109 million mt to 100-106 million mt.
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Thanks for kicking off your Monday with us and have a great week ahead!