The Rise of BioplasticsOct22

THEME ALERT

As reflected in the charts below, the share prices of bioplastic manufacturers have outperformed conventional plastic manufacturers and the broad equity market over the past two years and year-to-date. Over the past month, however, some of the top performers have suffered double-digit losses. For investors interested in the space, the drop could represent an opportunistic entry point.

We’ve also summarized the following articles related to this topic in the Manufacturing & Logistics section of today’s report.

Plastic

• Scientists Are Replacing Plastic With Algae, a Revolutionary Idea That Can Suck Carbon Out of the Air
• First Commercial Bioplastics Plant Based on Thyssenkrupp’s PLA Process is Commissioned in China
• 3D printed bioplastic: the future of construction?
• Plastic waste piling up in Japan after Chinese import ban
• Turkey’s plastic waste imports from the UK are booming – but at what cost?

Plastic (AMCRY, SLGN, BERY) vs Bioplastic (BAK, BIOM.L, ON.MI) vs S&P 500 (SPY)

Disruptive Change Updates

FX Matters

The dollar’s ups and downs have had significant repercussions. The earnings of global companies, the trend of interest rates, commodity prices, and many nations’ economies – emerging markets in particular – have all been impacted. This issue of MRP’s Viewpoint first examines the forces driving the dollar’s fluctuations, then looks at where the buck might go next and offers some thoughts on what it could mean for the capital markets.

Joe Mac’s Market Viewpoint: FX Matters →

Markets

Brexit Trade

Brexit Fund Loads Up With U.K. Exporters as Make-or-Break Nears

The manager of an outperforming fund with Brexit in its name says a deal will come — but is ready if it doesn’t. That’s because FDC Brexit, which has three-quarters of its portfolio in U.K. stocks, is loaded up with British exporters, according to fund manager Alexis Charveriat. If the U.K. and European Union reach a deal, global funds will flow back to the U.K. market, supporting his bets; if they don’t, the pound’s slide will boost exporters, he said.

Brexit talks are now coming to a head, with the EU aiming to finish the deal in December so that a blueprint can be laid out by the time the U.K. is officially scheduled to leave in March. But the two sides remain at an impasse over the Irish border issue, and the concrete details of their future relations may be fudged until later.

The fund, run by Paris-based Financiere de la Cite, lets investors hedge against a break-up of the euro zone, with a portfolio concentrated in European stocks outside the single-currency bloc. It has returned 6 percent this year, beating the U.K. equity benchmark and 98 percent of European stock funds.

The fund favors U.K. healthcare companies like AstraZeneca Plc and GlaxoSmithKline Plc, as well as stocks like Johnson Matthey Plc, BAE Systems Plc and International Consolidated Airlines Group SA, he said. Y

Economics & Trade

China

China moves to lift confidence as economic growth hits weakest pace since 2009

China’s economic growth cooled to its weakest quarterly pace since the global financial crisis, with regulators moving quickly to calm nervous investors as a years-long campaign to tackle debt risks and the trade war with the United States began to bite.

Chinese authorities are trying to navigate through numerous challenges, as the trade war fears have sparked a blistering selloff in domestic stock markets and a steep decline in the value of the yuan versus the dollar, heightening worries about the growth outlook.

The economy grew 6.5 percent in the third quarter from a year earlier, below an expected 6.6 percent rate, and slower than 6.7 percent in the second quarter, the National Bureau of Statistics said on Friday. It marked the weakest year-on-year quarterly gross domestic product growth since the first quarter of 2009 at the height of the global financial crisis.

“The trend of slowdown is strengthening despite Chinese authorities’ pledge to encourage domestic investment to support the economy. Domestic demand turned out weaker than unexpectedly solid exports,” said Kota Hirayama, senior emerging markets economist at SMBC Nikko Securities in Tokyo. R

Saudi Arabia

Suddenly Toxic, Saudi Prince Is Shunned by Investors He Courted

He was the man who sold the world on his vision of a Saudi economy no longer dependent on oil. Now Crown Prince Mohammed bin Salman could become the biggest risk to his own project. Everything changed when Jamal Khashoggi walked into the Saudi consulate in Istanbul on Oct. 2 and didn’t come out. Allegations rapidly spread that the Washington-based journalist was murdered by a hit team sent from Riyadh. And suspicion naturally fell on the oil-rich kingdom’s de facto ruler, the 33-year-old heir to the throne.

Prince Mohammed, who’s denied any knowledge of Khashoggi’s fate, still has his defenders — notably Donald Trump. The U.S. president and his top diplomat have cautioned against putting America’s decades-old Saudi alliance at risk while they await the results of a Saudi investigation. But that’s in sharp contrast to a growing chorus of outrage, putting pressure on the White House to act. In Congress, lawmakers from Trump’s own party denounced the prince personally and demanded sanctions.

And, crucially for Prince Mohammed’s economic plans, the global business leaders he courted are distancing themselves. The bosses of JPMorgan Chase & Co., Ford Motor Co. and Uber Technologies Inc. are among dozens of executives and policy makers scrapping plans to attend the prince’s business forum next week. B

US

U.S. Recession Chances in Next Two Years Top 60%, JPMorgan Says

The U.S. economy has a greater than 50-50 chance of tipping into a recession in the next two years, according to a model tracked by JPMorgan Chase & Co. The probability of a U.S. recession within one year is almost 28 percent, and rises to more than 60 percent over the next two years, researchers wrote in a note this week. Over the next three years, the odds are higher than 80 percent, according to the note.

JPMorgan’s model includes indicators ranging from consumer and business sentiment to prime-age male labor participation, compensation growth, and durables and structures as a share of gross domestic product. The bank’s gauge is more pessimistic than a recession tracker maintained by the Federal Reserve Bank of New York, which shows a 14.5 percent chance of a recession a year from now. B

Politics & Policy

OPEC

U.S-Saudi Clash Could Spell Disaster For OPEC

The Khashoggi case is far from over, as current harsh statements coming from Washington are showing. Not only is there a long line of U.S. Senators calling for an in-depth investigation of the matter, some have even openly called for the removal of Saudi Crown Prince Mohammed bin. These moves from Washington are not only endangering the very strong ties between Washington and Riyadh, but also endanger the overall Middle East and internal stability of OPEC.

Statements made by US R-Senator Graham, already supported by other high-ranking U.S. officials, show that the position of Saudi Arabia as a strategic ally of Washington in the Middle East, and MBS in particular, is under severe pressure.

Washington is set to implement sanctions on Iran, possibly shaking global energy markets to its foundations. And Washington’s so-called ‘No Oil Producing and Exporting Cartels Act “or “NOPEC” legislation is threatening anti-trust lawsuits against the oil cartel.

The Khashoggi crisis comes at a pivotal moment in the energy markets and geopolitical arena. Ongoing pressure in Washington to put the law up for voting has caused bad blood in several OPEC capitals. Trump’s repeated calls on OPEC to increase production to lower prices also has not been taken lightly.

At present, $1 trillion in Saudi investments in the U.S. could be at stake. If the NOPEC bill is signed into law, the move would revoke the sovereign immunity from U.S. legal action which oil producers, including OPEC members, currently enjoy. OP

Construction & Real Estate

Data Centers

Data in the cloud falls back to earth

The past few years have been good for co-located datacentre companies, which rent serviced rack-and-cage space to server owners. The scramble to find such space has benefited companies such as Equinix and Digital Realty Trust, the two largest independent co-located datacentre companies.

But datacentres are a demanding business. As one industry veteran says: “This is capital intensive and you have to deliver service to a customer at “five nines” reliability (99.999 per cent). You need access to (property) in the right place, electrical substation access and redundant connectivity to lots of (telecoms) carriers. You also need co-location with ‘hyperusers’ such as Amazon and Google.”

As data and applications become more portable across platforms, large users will migrate to the most effective points of the cloud. Those will include independent datacentres with the densest interconnections, most desirable co-tenants and low latency for the customer.

It will not include interlopers such as garden-variety private equity and infrastructure funds. You have to know what you are doing. FT

Services

Cannabis

Canada’s Legalization of Marijuana Offers a Test Case for Other Countries

Canada became the largest country to legalize the recreational use of marijuana on Wednesday, a potentially watershed moment for a nascent cannabis industry that is banking on showing the drug can be safely regulated. Its implementation here will likely serve as a test case for other Western governments considering an alternate approach to cannabis.

Before Wednesday, legalization had already started to reshape Canada’s financial markets. There are more than 120 marijuana companies listed on Canadian stock exchanges, but the market is overshadowed by five companies whose total stock market value has ballooned from less than $4 billion to more than $40 billion in the past year.

Canada’s cannabis regime has also attracted the attention of global consumer-goods firms, who are keen not to miss out on the next big trend. Corona brewer Constellation Brands acquired last year a 10% stake in Canopy Growth Corp. , one of Canada’s largest, government-approved marijuana producers, and in August invested an additional $4 billion in the Smith Falls, Ontario grower and seller. Molson Coors Brewing Co. is also in a joint venture with Hexo Corp. , a Quebec-based cannabis company, to make nonalcoholic, cannabis-infused beverages for the Canadian market.

Despite the enthusiasm, Canadian marijuana producers and sellers could get off to a slow start because of supply problems, limited retail locations and a mixed bag of regulations across the country’s provinces and territories. WSJ

Video Games

EA and Activision’s $79bn games-as-a-service growth

A new report shows Electronic Arts and Activision have grown by almost $80 billion combined since ramping up their efforts with games-as-a-service.

Activision Blizzard has seen its market value soar from $10 billion to over $60 billion in the same period. Activision’s growth can partly be attributed to live titles like Destiny and Overwatch, but also some key acquisitions – most notably, the purchase of King for close to $6 billion back in 2015. This deal brings the likes of Candy Crush Saga, Bubble Witch Saga and other hugely popular casual games into the fold. In fact, DFC reports that Activision’s digital profits almost doubled in the year following the acquisition.

Since 2012, EA’s value has risen from $4 billion to $33 billion. Electronic Arts, on the other hand, has its annual sports franchises to thank. FIFA, Madden, NHL and NBA are all live service titles, with Ultimate Team modes in UFC and Hockey bringing in additional revenue.

That’s not to say these companies are the unchallenged leaders in the live service space. NCSoft is cited as another prime example, with mobile game Lineage M boosting that company’s revenues to $1.6 billion last year. GI

Manufacturing & Logistics

Plastic

Scientists Are Replacing Plastic With Algae, a Revolutionary Idea That Can Suck Carbon Out of the Air

Two Dutch scientists are using algae to replace plastics throughout their city – and if their mission proves successful, they believe that no one will ever have to use plastic again.

Designers Eric Klarenbeek and Maartje Dros have developed a bioplastic made from algae which they believe could be used to replace synthetic plastics over time. Dros and Klarenbeek grow algae, which they then harvest, dry, and turn into a material that can be used in 3D printers to create plastic items from trash cans and tableware to shampoo bottles.

The two have partnered with a number of companies producing bio-polymer to create a network known as 3D Bakery. They hope that – instead of buying products from large multi-national companies – one could simply walk down the street and “bake” some replacement items, whether it be cups, plates, flower vases, or tables.

Another feature of the studio’s 3D-printed products is that because they’re made of algae, a substance which absorbs CO2 from the air, they internally bind with the carbon when they are turned into solids, effectively becoming CO2 jailers that prevent the carbon from being released back into the atmosphere. GNN

Plastic

First Commercial Bioplastics Plant Based on Thyssenkrupp’s PLA Process is Commissioned in China

thyssenkrupp Industrial Solutions announced that the world’s first commercial plant based on the company’s patented manufacturing process for the bioplastic polylactide (PLA) ― the PLAneo technology ― recently started production in Changchun, China. It is operated by the Jilin COFCO Biomaterial Corporation, a subsidiary of COFCO, China’s largest food and beverage group.

Sami Pelkonen, CEO of the Electrolysis & Polymers Technologies business unit of thyssenkrupp Industrial Solutions: “The bioplastics market will continue to grow in the coming years, not least due to the increasing environmental awareness of industry, governments and consumers. With our PLAneo® technology we want to do our bit to make the plastics sector more sustainable and resource-friendly. With it we enable our customers to produce high-quality bioplastics with a wide range of properties – at a price that is competitive with conventional plastics.”

Polyactide (PLA) is a 100% bio-based and compostable plastic, which thanks to its physical and mechanical properties, can replace conventional oil-based polymers in many areas. The starting material for PLA production is lactic acid, which is recovered from renewable resources such as sugar, starch or cellulose. PLAneo technology converts lactic acid into PLA in a particularly efficient and resource-friendly way. Another advantage is its transferability to large-scale plants with capacities of up to 100,000 tons per year. ChemEng

Plastic

3D printed bioplastic: the future of construction?

Currently most 3D printed construction projects use concrete, but Zoubeir Lafhaj, an expert in the future of construction, is certain that is not the future. He says we need to move towards materials that use less energy, have a lower carbon footprint and produce less waste. Plastic is a good alternative because it is more environmentally friendly than concrete, Lafhaj says, but it also has another advantage. In dense urban environments, such as cities like Tokyo, it can be much easier and cheaper to import and move around.

Examples of 3D printed construction using bioplastics can be seen on the canal-side site of Dus Architecture in Amsterdam. A full-sized, 700m2 canal house is being 3D printed out of bio-based plastic to be used as the firm’s offices and workspace. In 2015 it unveiled an 8m2 urban cabin that had been made using a black bio-based plastic – complete with printed outdoor bath tub.

One of the major advantages of this type of construction is that it produces very little waste. On an average building projects you have about 25% material waste. With printing you really only use the material that you actually need. Youris

Plastic

Plastic waste piling up in Japan after Chinese import ban

Plastic waste is piling up in Japan with many local governments struggling to cope after China banned the import of such waste late last year. According to about a quarter of 102 local governments that responded to a ministry survey, the amount of plastic waste stored at local scrap companies increased between January and July, with some reporting that piled-up waste had exceeded the legal limit.

Japan exports about 1.5 million tons of plastic waste per year and until last year around half went to China, which imported the waste for recycling purposes. In late 2017, China stopped accepting plastic waste out of concern over environmental pollution.

Japan produces the largest amount of plastic waste per capita after the United States and has lagged behind other countries in curbing the use of plastics despite growing fears over environmental pollution.

The Environment Ministry is compiling a strategy to reduce plastic waste, and sources said it is considering including a numerical target of cutting the amount of disposable plastic waste by 25 percent by 2030, while increasing the use of environmentally friendly bioplastics made from plants. JPT

Plastic

Turkey’s plastic waste imports from the UK are booming – but at what cost?

Itinerant garbage pickers run down the hilly streets of Istanbul, their trolleys packed with plastic and other waste. Their haul is a boon for the recycling industry in Turkey. “We collect 80% of the waste from the streets,” said Recep Karaman, head of the street waste collectors association.

But imports of plastic waste from the UK are increasing, and Karaman says it could damage the income he and his colleagues earn from garbage picking. “3.5m of the 6m tonnes of waste produced annually is collected by us,” he said. “But our earnings drop due to imports; they decrease the value of the waste we collect.”

Waste collectors are holding out hope that a new protocol by the government will protect and secure the jobs of the 500,000 collectors, while also protecting the environment and the economic potential of waste in Turkey.

Following restrictions on imports of UK plastic waste imposed by Malaysia and Vietnam and now being considered in Poland, the rise in the tonnage of containers landing on Turkish shores is causing growing concern. According to data submitted by UK exporters to the Environment Agency (EA) and seen by the Guardian, in the first three months of 2018 the UK shipped 27,034 tonnes of waste plastic to Turkey, compared with 12,022 tonnes in the same period last year. Guardian

Technology

3DP

3D-printed supercapacitor electrode breaks records in lab tests

Scientists have reported unprecedented performance results for a supercapacitor electrode. The researchers fabricated electrodes using a printable graphene aerogel to build a porous three-dimensional scaffold loaded with pseudocapacitive material. In laboratory tests, the novel electrodes achieved the highest areal capacitance (electric charge stored per unit of electrode surface area) ever reported for a supercapacitor.

As energy storage devices, supercapacitors have the advantages of charging very rapidly (in seconds to minutes) and retaining their storage capacity through tens of thousands of charge cycles. They are used for regenerative braking systems in electric vehicles and other applications. Compared to batteries, they hold less energy in the same amount of space, and they don’t hold a charge for as long. But advances in supercapacitor technology could make them competitive with batteries in a much wider range of applications.

A pseudocapacitor is a type of supercapacitor that stores energy through a reaction at the electrode surface, giving it more battery-like performance than supercapacitors that store energy primarily through an electrostatic mechanism (called electric double-layer capacitance, or EDLC).

The new study demonstrates a breakthrough in balancing mass loading and capacitance in a pseudocapacitor. The researchers were able to increase mass loading to record levels of more than 100 milligrams of manganese oxide per square centimeter without compromising performance, compared to typical levels of around 10 milligrams per square centimeter for commercial devices. SD

Quantum

There’s now proof that quantum computers can outperform classical machines

Because they have such short coherence time before the system becomes chaotic and useless for any computations, you can only perform a relatively small number of operations on them. In quantum computing speak, that’s “depth,” and today’s systems are considered shallow.

Science today published a paper, in which the researchers prove that a quantum computer with a fixed circuit depth is able to outperform a classical computer that’s tackling the same problem because the classical computer will require the circuit depth to grow larger, while it can stay constant for the quantum computer.

As IBM Q Ecosystem and Strategy VP Bub Sutor notes, “there is still this core question, which is, ‘why are you bothering?'” Today’s result should put that question to rest, but Sutor still stressed that he tries to stay grounded and never says quantum computing “will” do something until it does. “There’s a strategy through this, but there’s going to be little left turns and right turns along the way.” TC

Quantum

Boeing creates unit to focus on super-computing that mimics the brain, hack-proof communications

Boeing Co. is creating a new unit to focus on technology that’s seemingly straight out of science fiction, including super-fast computing that mimics the synapses of the human brain and hack-proof communications links based on applied quantum physics.

So-called neuromorphic processing and quantum communications, two of the futuristic technologies Boeing wants to explore, may seem an odd fit for the world’s largest plane-maker. But such concepts increasingly form the core of aerospace innovation, like the networks that may one day manage millions of airborne drones, said Greg Hyslop, Boeing’s chief technology officer.

The rapid advances in computers and communications are under study by other industrial titans as well. Billionaire Elon Musk’s secretive Neuralink business is developing “brain-machine interfaces to connect humans and computers,” according to its website. Defense contractors Harris Corp. and L3 Technologies Inc. are forming a $33.5 billion behemoth focused on the increasingly complex communications systems embedded in military systems.

The gains to be reaped in processing speed under traditional computer architecture are slowing as researchers reach the physical limits of how many transistors can be squeezed onto a single silicon chip. JPT

Robotics & Automation

China robot market growth to slump this year as trade war weighs

Sales of industrial robots in China, the world’s biggest market, will grow this year at only about a third of last year as an escalating Sino-U.S. trade war hits spending on equipment, a global robot group said on Thursday.

The International Federation of Robotics (IFR) in its annual report forecast Chinese demand for robots will grow 15-20 percent this year after surging 59 percent to 137,920 units last year. With China accounting for 36 percent of the global robot market and with its sales volume exceeding the total of Europe and the Americas combined, slowing demand growth in the Asian nation is also impacting global demand. IFR, which brings together nearly 60 global robot suppliers and integrators, predicts worldwide industrial robot sales this year will grow 10 percent compared to last year’s 30 percent.

Because of the trade war, many global manufacturers “are now in a wait-and-see mode, wondering whether to shift production (away from China) to, let’s say, Vietnam or the United States,” IFR President Junji Tsuda told Reuters in an interview.

China’s robot market benefited last year from accelerated automation at smartphone and automobile plants. Foreign suppliers, mainly European and Japanese robot makers, accounted for 75 percent of robot sales in China, including those produced locally. R

Cannabis

Marijuana Stocks Mellow: Here Are 3 Reasons Investors Are Bullish

Marijuana stocks stabilized Thursday amid Aurora Cannabis’ upcoming U.S. stock listing, bullish sales indications in Canada, and another blockbuster pot merger.

After a two-day skid among marijuana stocks, Canopy Growth (CGC), the first pure-play marijuana company to list on the New York Stock Exchange, rose 0.7% in the stock market today. Cronos Group (CRON), the first pot stock to list on the Nasdaq, fell 3.6%. Tilray (TLRY), which joined it in July via the first pure-play marijuana IPO on a big U.S. exchange, picked up 2.9%. Here are three big developments driving marijuana stocks:

The New York Stock Exchange approved Aurora Cannabis’ listing on Wednesday, the same day that legal recreational marijuana sales began in Canada. Aurora will join rival Canadian marijuana producer Canopy Growth on the exchange. Shares will start trading Oct. 23 under the ticker ACB.

Aurora, on Thursday, received some early high marks from an analyst after the first day of recreational legalization. GMP Securities analyst Martin Landry, in a research note on Thursday, said Aurora stood out for having an array of products available and “generally strong pricing.”

And two marijuana companies, iAnthus Capital Holdings and MPX Bioceutical, said they had agreed to merge in an all-stock deal valued at 835 million Canadian dollars. The combined company will have operations and licenses in 10 states. IBD

Transportation

EVs

VW is building an all-electric vehicle factory for 300,000 cars per year in China

VW started construction on its first factory specifically designed for the production of its new MEB platform for all-electric vehicles. The new factory will be in China and it will have a capacity of 300,000 cars per year. Through its SAIC Volkswagen joint-venture, they broke ground at their Anting, Shanghai location. The MEB platform will first go into production in Germany next year, but it will not be at a factory especially designed for the platform.

The first vehicle to be produced at the new plant will be an all-electric SUV in 2020, but there will be a range of different EVs. The German automaker says that they are deploying their “industry 4.0” approach in the factory with a bunch of high tech systems like AI and VR: It will enable VW to quickly deploy a high volume of electric vehicles in China, which has aggressive electrification goals.

VW will start with a capacity of 100,000 electric cars per year for its first plant to go electric in Germany by 2020. In North America and Europe, VW’s series of “I.D.” concept vehicles are powered by the company’s new MEB platform for electric vehicles.

There’s the I.D., which is a Golf-sized vehicle expected to be their first mass-market EV for the model year 2020. VW also unveiled the I.D. VIZZION sedan, the crossover all-electric I.D. CROZZ Concept, and then there’s the I.D. BUZZ electric microbus coming in 2022. Electrek

Commodities

Coal

American Coal’s Asian Savior Is a Fantasy

The Trump administration is looking at using naval facilities or other federal properties to open up exports of thermal coal from the Great Plains of Wyoming and Montana to the energy-hungry populations of East Asia. In theory, that would solve a long-standing gripe of the U.S. coal industry: That state governments in Washington, Oregon and California are blocking their route to the ocean by refusing to approve coal terminals.

The trouble is, it’s a lot more than coastal liberals that are stopping Asian consumers from buying American coal. For one thing, the stuff mined in Wyoming’s Powder River Basin tends to be pretty low-quality. Then there’s the distance. Then there’s ocean freight.

The brutal truth is that even in a best-case scenario Asian coal demand would never be able to replace the production that’s going from the Powder River, which lost about 100 million short tons of output between 2014 and 2016 alone – greater than the total volume of U.S. coal exports.

As renewables and gas undermine the economics of coal generators and governments work to avert the worst consequences of climate change, the world’s coal miners are increasingly fighting over a dwindling pool of demand. Only the fittest will make it. The Powder River, long protected in the redoubt of the domestic U.S. market, will never survive on the open ocean. B

Pork

America Struggles to Take Its Pigs to World’s Biggest Market

China has the world’s biggest appetite for pork. It’s such a beloved staple that the written Chinese character for “home” depicts a pig inside a house. U.S. producers banked on that business being around for years.

That’s changed. As a result of the Trump administration’s clash with Beijing over trade, China’s tariffs on U.S. pork have climbed as high as 70%, making U.S. imports more expensive. At the same time, an outbreak of African swine fever in China has increased demand for imported pork.

To fill the void, Chinese customers are increasingly looking to companies in Europe and South America to fill their orders―and those companies aim to turn that opportunity into long-term business. The shift raises the prospect of not just a short-term hiccup for American hog farmers, but a fundamental realignment in the global supply chain in one of the world’s hungriest markets.

China’s pork imports swelled to 3.6 billion pounds last year, nearly 10 times more than a decade ago, the USDA says. The surge has encouraged producers in other countries, including the $200 billion U.S. meat industry, to spend hundreds of millions of dollars on gigantic, state-of-the-art slaughterhouses to help fill that demand. WSJ

Steel

China’s Steel Production Hits New Highs

China’s steelmakers pushed production rates to record levels last month, underscoring a broadly bullish picture for mills in the world’s biggest market as prices rally again.

Output of crude steel rose 7.5% on year to 80.85 million metric tons, according to the statistics bureau Friday. That means a daily rate of 2.695 million tons, beating the previous all-time high of 2.673 million tons posted in June. Output for the first nine months of the year climbed 6.1% to a record 699.42 million tons.

China’s mills have boosted output to benefit from an unusually long period of high prices and healthier profits that shows few signs of ending. The price of rebar used in construction rallied this week to the highest this year, while iron ore prices have surged to a March high, ahead of winter production curbs to fight pollution that are likely to continue to support the nation’s steel markets.

China steel industry, which accounts for about half of world output, has recovered from a crisis that peaked in late 2015 by shutting outdated or illegal plants, and enforcing tougher environmental standards. The anti-pollution measures should bolster prices for steel and iron ore in the medium term, Citigroup Inc. said in a note Wednesday.

Output of primary aluminum rose 7.1% on year in September to 2.79 million tons, according to the statistics bureau. Production for the first nine months increased 4.2% to 25 million tons. IW

Steel

Global Steel Demand Forecast to Grow, but Slowly

The World Steel Assn. forecasts global steel demand will total 1.66 billion metric tons for 2018, 3.9% higher than 2017, and that 2019 demand will rise a further 1.4% to 1.68 billion metric tons. The figures are provided by World Steel’s Economics Committee, which issued its semi-annual Short-Range Outlook report for 2018. The current report signals that demand for steel has expanded by 41.8 million metric tons since the last SRO issued in April, and it sees 2019 demand increasing by 54.5 million metric tons over the previous forecast.

Al Remeithi, chairman of the World Steel Economics Committee, said: “In 2018, global steel demand continued to show resilience supported by the recovery in investment activities in developed economies and the improved performance of emerging economies. “Demand for steel is expected to remain positive into 2019, growing at 1.4% globally,” he added.

The forecasters commented that risks to demand growth have increased, too, citing trade tensions and currency volatility. Normalization of monetary policies in the U.S. and EU could adversely affect the currencies in emerging economies, they noted. AM

Energy & Environment

Batteries

Who’s Ahead in the Battery Race?

In the race for the next generation battery, lithium-ion technology has made huge leaps in recent years. But the power packs continue to have drawbacks: they use raw material mined in unstable countries, they’re dangerous if they break and they could pack more power. Solving those conundrums is the focus of hundreds of companies and thousands of scientists all over the world. And in that crowded field, Tesla Inc., a French billionaire and a startup in Massachusetts are pulling ahead.

Reducing Cobalt: Tesla. Battery makers are working to pare down the amount of cobalt in their devices to the bare minimum to control costs and reputational risk. The battery that Tesla’s currently making for its Model 3 cars and its PowerWalls currently contains less than 3 percent cobalt.

Safer Batteries: Bollore Group. Blue Solutions, a division of Bollore Group, is leading the pack in solid state batteries and already has two factories up and running.

Energy Density: Pellion Technologies. Pellion Technologies, a startup in Massachusetts, makes a battery that it says can store double the amount of electricity of a conventional power pack. It started shipping it last quarter to customers and is planning to ramp up production 10-fold next year. B

Biotechnology & Healthcare

CRISPR

Gene-edited zebrafish models take disease research to the next level

Advances in optimisation of the gene-editing technique CRISPR/Cas9 in zebrafish disease models offer a new level of accuracy and specificity previously out of reach for research into human genetic disorders.

A wide variety of diseases that affect people of all ages across the globe, including dementia, developmental disorders, some forms of cancer, muscular dystrophies and heart conditions, result from mutations in our genes. As scientists seek to understand the genetic basis of these diseases and to work towards the development of effective treatments, having genetic models of the diseases is key to their research.

While mice or fruit flies will usually come to mind when thinking of animal models in the lab, zebrafish are increasingly popular for a number of important reasons. Due to their small size and inexpensive husbandry, they can be housed in large numbers. They have a relatively short life cycle, reaching sexual maturity in 2-3 months and producing up to 300 eggs per week. The embryos develop externally and are transparent, making them an ideal tool for non-invasive microscopic investigation as they develop. Zebrafish embryos are also an excellent tool for drug screening, thanks to their availability in large numbers and substantial contact surface with the water in which they grow.

Zebrafish have enormous potential for creating precise knock-in models of human disease caused by point mutations.SD

Endnote

Chart

The number of “zombie” companies in the OECD nations continues to climb

WSJ