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Market Movers Europe, Oct 26-30: Oil, metals markets eye Q3 corporate results

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Watch: Market Movers Europe, Oct 26-30: Oil, metals markets eye Q3 corporate results

In this week's highlights: It's corporate results season for oil majors; Glencore is due to release its third-quarter production report; global steel overcapacity is on the agenda; and a possible lack of capacity is exercising the UK power market.

  • Oil majors results, reconstruction in focus
  • Glencore's cobalt plans eyed
  • Meeting of the European Steelmakers Association
  • Coronavirus worries petrochemical markets
  • UK power capacity margins causing concern

Platts Live

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In this week's highlights: Glencore is due to release its third-quarter production report; global steel overcapacity is on the agenda; and a possible lack of capacity is exercising the UK power market.

But first, in oil, it's corporate results season. Third-quarter results from Italy's Eni are due Wednesday, followed by BP, Shell and Norway's Equinor on Thursday, with Total on Friday. Oil companies have been hit not only by rock-bottom prices but also upstream production cuts. But CEOs are likely to focus on post-pandemic reconstruction plans through mass job cuts and divestments. They're also likely to detail emerging bright spots from slightly higher oil prices to the gradual increase in US rig counts.

And that takes us to our social media question: What do you think the impact will be of the oil majors' reconstruction plans? Tweet us your thoughts using the hashtag #PlattsMM.

For the metals markets corporate reports will be in the spotlight too. Mining giant Glencore will release its third-quarter production report on Friday. With some global operations suspended in the first half of the year due to lockdowns, the third quarter should indicate whether the company made up for production lost in the second.

The cobalt market will pay particular attention to Glencore's production of the rare battery metal at its Katanga Mining operations in the Democratic Republic of the Congo, where it was expected to commission a delayed acid plant in the second half of this year. Glencore previously placed its Mutanda cobalt operations there under care and maintenance at the end of 2019, cutting off 20% of global cobalt supply.

Moving on to a more common metal, on Wednesday, the European Steelmakers Association will host a webinar on the challenges facing the European steel market, before releasing its report on the first half of 2020. The association will discuss the perennial problem of global steel overcapacity, the focus of a G20 ministerial meeting Monday and a factor behind the so-called "unlevel playing field" affecting the competitiveness of steelmakers in higher-cost environments such as the EU.

Capacity will also be in focus in the European ethylene and propylene markets. As the number of coronavirus cases grows the demand outlook for both petrochemicals is becoming increasingly uncertain. Buyers are becoming cautious with volume commitments, taking a wait-and-see approach. As a result, there is talk in the market of plant rates being cut.

And let's end with a blackout, or at least the prospect of one. Power traders are warning of potential supply deficits possibly leading to blackouts in the UK this winter.

As you can see from the chart, the UK has surplus supply when low pressure systems bring windy, mild conditions. But when high pressure hits, the UK displays vulnerability, illustrated by price spikes in mid-September and October.

Tightness increased with the withdrawal in August of three large gas plants after Calon Energy went into administration. National Grid argues that, when prices rise, interconnectors will deliver. But the market isn't so sure.

For more on all the issues affecting commodity markets from wherever you are, make sure to check out Platts LIVE at the address displayed on your screen. Thanks for kicking off your Monday with us and have a great week ahead!