In this week's Market Movers: The Turkish Lira reaches crisis point; new US sanctions hurt Russia; and Rhine water levels under renewed threat.
US President Donald Trump ratcheted up the pressure on the lira by doubling the tariffs on imports of Turkish steel and aluminum due to what he called the poor relations between the two countries.
Demand for scrap metal in Turkey is expected to fall further as the Lira increases input costs for buyers. Imports of polymers into the country are also slowing, with demand set to weaken even more.
That brings us to our social media question of the week: Just how low can the Turkish lira go -- or will it bounce back? And why? Tweet us your thoughts with the hashtag #PlattsMM.
On the other side of the Black Sea, we can expect reaction to the latest US sanctions against Moscow, which led to the ruble reach lows against the dollar last seen more than 2 years ago.
OPEC publishes its monthly oil market report on Monday, while Total's oil and gas platforms continue to face strike disruption as unions and management struggle to reach a deal.
Finally, temperatures are forecast to climb again in France and Germany, adding a potential fresh wave of pressure to trade routes along the Rhine and Rhone where water levels remain incredibly low. Meanwhile, European biodiesel prices fall even further due to supply being unable to leave the ARA region.
Join our conversations on Twitter - use #PlattsMM and connect with us.
In this week's highlights: The Turkish Lira reaches crisis point; new US sanctions hurt Russia; and Rhine water levels under renewed threat.
But first, In Turkey, the Turkish lira plunged to fresh record lows on Friday, shedding 18 percent on the day alone to more than six liras to the dollar after President Tayyip Recep Erdogan urged Turks to sell gold and greenbacks to help win what he termed an "economic war".
US President Donald Trump ratcheted up the pressure on the lira by doubling the tariffs on imports of Turkish steel and aluminum due to what he called the poor relations between the two countries. The lira's tailspin means increasing problems for importers of raw materials and exporters of finished products in Turkey.
Demand for scrap metal in Turkey is expected to fall further as the Lira increases input costs for buyers. Similarly, prices are forecast to flounder for finished metal products due to a fresh 50% tariff on steel and 20% on aluminum imports into the US.
On the import side cement plants have already ceased their coal and petcoke procurement while more are likely to follow.
Imports of polymers into Turkey are also slowing, with demand set to weaken even more. In the grains market, Turkish flour millers' margins have pushed state grains agency TMO to release key wheat stocks months ahead of time.
The number of coasters moving grains across the Black Sea from Russia to Turkey is expected to drop to less than 5 per week, versus 10 per day, a year ago. Nonetheless, TMO's intervention in the market is likely to mean a fresh 200,000 to 300,000 metric ton wheat tender in the near future. This should support Black Sea wheat markets.
That brings us to our social media question of the week: Just how low can the Turkish lira go – or will it bounce back? And why? Tweet us your thoughts with the hashtag #PlattsMM.
On the other side of the Black Sea, we can expect reaction to the latest US sanctions against Moscow, which led to the ruble reaching lows against the dollar last seen more than 2 years ago. While this will help support lower prices in the grains markets, sentiment toward Russia in the oil industry is wilting. Arctic oil producer Gazprom Neft may give its views when it publishes its first-half results on Thursday.
Staying with oil, OPEC, publishes its monthly oil market report on Monday, as a perfect storm of sanctions against Iran, subdued oil prices, and outages from Angola to Venezuela divide consensus within the group.
The North Sea industry also faces trouble. Total's oil and gas platforms, which supply the Forties crude pipeline, continue to face disruption as unions and management struggle to reach a deal, the latest strike happening on Monday.
Temperatures are forecast to climb again in France and Germany, after a cooler and windier period, adding a potential fresh wave of pressure to trade routes along the Rhine and Rhone where water levels remain incredibly low. Power market traders will be on the lookout for new river-based generation restrictions and whether less water and wind will result in less hydro and wind power supply.
In contrast, European biodiesel prices could fall even further due to supply being unable to leave the ARA region due to the low Rhine level preventing product flowing inland.
That concludes this week's Market Movers. Thanks for starting your week with us. Have a great week ahead.