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Market Movers Europe


Market Movers - Europe, Oct 2-6: Traders wary of low French nuclear availability ahead of winter

With Ana-Maria Tolbaru, Power Analyst

October 02, 2017 07:18:37 EST (3:01)

Traders in European power markets are concerned their fears of low French nuclear availability may be coming to pass right at the start of winter. Power prices surged September 28 on news that all four reactors at the Tricastin plant were ordered to be shut down for safety reasons. S&P Global Platts Power Analyst Ana-Maria Tolbaru shares why capacity could become even tighter.


October 1 marks the biggest change in the region's sugar industry in 11 years with the end of the EU sugar production and export quota system.


Meanwhile, top officials from the oil and gas industry are meeting in Moscow for the Russian Energy Week. Saudi Arabia's King Salman's visit to Russia is a sign of ever-closer bilateral ties.


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Video Transcript


In this week’s highlights, we look at major energy meetings in Russia, a landmark in EU sugar, and France’s latest nuclear outage.


This week will see top oil and gas officials meet at Russian Energy Week on Moscow. Saudi Arabia’s King Salman will also pay his first ever visit to fellow to top oil producer Russia in a sign of ever-closer bilateral ties.


Moving on to a sweeter topic -- October the first marks the biggest change in the EU sugar industry in eleven years. The EU sugar production and export quota system ends. Most producing countries have taken already advantage of the lift and increased their planted acres. Now, coupled with favorable weather, this has resulted in a steep rise in production and the exportable surplus.


While there might be plenty of sugar in the European power markets, traders are concerned their fears of low French nuclear availability may be coming to pass right at the start of winter. Last Thursday, All four reactors at the Tricastin plant were ordered to be shut down for safety reasons during maintenance on a nearby embankment. That’s just short of four gigawatts, a huge amount of capacity.


European power prices surged on the news. And capacity could become even tighter. Twelve reactor restarts in October and November depend on the regulator’s approval, and EDF has already put back the return of the first reactor by ten days.


And our social media question is: How likely is a major slump in French nuclear capacity this winter? Tweet us using the hashtag #PlattsMM.


Across the channel, in the UK, this week sees the start of the Early Capacity Market starts in the UK and with it the return of capacity that hasn’t generated for years. Platts Analytics' Eclipse Energy says this addition in capacity has likely been a key factor in the relative calmness UK prices’ response to the bullish French curve. The UK market seems confident that, as last winter, it will be able to pull on French power during the absolute peak periods. As a result the UK-France Peak spread for Winter 17 contracts has moved increasingly into negative territory in response to the French curve.


Price expectations will also be the focus in steel. Large European mills are beginning to start automotive supply negotiations for 2018, and are targeting price increases of Eur120/mt. Coking coal and iron ore costs have fluctuated this year and may not justify such high rises. However other costs -- such as graphite electrodes and refractories -- have rocketed. Q4 is widely seen as the crunch moment for electrode supply, when shortages could really start to bite.


Thanks for kicking-off your Monday with us and have a great week ahead.





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