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In my view, the most interesting thing to happen this week was that we got a rather extraordinary claim from the ACCC: it says “renewable gas” won’t hit Aussie households for “a generation” – which I’m taking to mean around 40Y.
This comes as the competition and consumer watchdog sues a major Australian pipeline operator (and thus gas retailer) over an early-mid 20’s digital campaign promising that its customers would be seeing renewable gas fuel their household stovetops “within a generation.”
This, the ACCC says, cannot be done.
And to anybody who pays attention to the Australian energy market carefully (and the economics around it,) this isn’t surprising. Of course it can’t be done. But it’s unusual that the watchdog comes out with such a bold statement – it may as well have said “carbon capture has never been proved to work at scale.”
Which it hasn’t, but many people get quite bristly if you tell them that.
Why I think this matters, though, is that the ACCC’s claims may end up the stuff of future lawsuits involving any number of potential companies. Canberra has recently moved to recognise hydrogen and biomethane as “natural gas equivalents,” and this week, Delorean Corporation won the right to issue renewable-gas based carbon offset certificates.
But now, here’s the ACCC saying that renewable gas is uneconomical and impossible to deliver at affordable costs within the next forty years.
Which, in my view, throws the whole renewable gas offset certificate thing into question.
It may be a different story for industrial end-users, but at the end of the day, I’d be surprised if this doesn’t end up becoming part of a legal test case, in some form or another, not too far down the line.
RBA rate cut talk back in vogue
In more predictable news, whether or not the RBA will cut the cash rate when it next meets on July 8 is becoming a subject of more and more chatter from the financial commentariat.
City Index, NAB and Westpac all tip a July cut; but pretty much everyone else is agreed that if we don’t get it in July, then August is the kicker.
While the job market remains strong there are signs of weakness and with the latest Aussie CPI coming in at 2.1% for the 12mths to May (2.4% for TMI or our version of ‘core,’) things are still within the target band. UBS did note that core inflation is slightly hotter than what the RBA would like; the impact of oil price volatility and, more importantly, Trump tariffs remain to be seen.
But on the whole, it looks like there’s more reasons than not for the RBA to make another trim. It would certainly be good news for what is undeniably the start of an ASX IPO market recovery (though that could be up and down in months ahead, unless the recent red-tape windback has been particularly enticing.)
The last big thing of noteworthiness to me: Goldman Sachs reckon we’ll see peak copper prices for CY2025 hit in August. Make of that what you will, find more information at the relevant link below.
Australian Equities
Metcash the latest to suffer from black market tobacco pressure
UBS cuts ANZ to sell, while Morgan Stanley warns threat of divvy downgrade
Droneshield is back, baby: stock stages huge Iran-Israel conflict rally
Australian Economy
RBA poised to cut in July: CityIndex
Westpac joins RBA bulls with prediction for July cut
“Still high labour demand”: latest job vacancy data shows still-strong market
International Equities
After much delay, Tesla finally launches Robotaxis
UBS downgrades Thai stocks to ‘Neutral’ as leader refuses to quit in Sth. Korea echo
NVIDIA once again becomes world’s most valuable company
Commodities
Congo extends cobalt export ban, further ‘surging’ prices
ANZ fix oil with a US$80/bbl price forecast
Goldman Sachs say copper market trends to trigger 2025 peak prices in Aug
Geopolitics
Russia’s security chief says multiple nations ready to supply Iran with nukes
Most oil thru Strait of Hormuz goes to Asia
The US and Iran to hold talks next week as tenuous Israel-Iran ceasefire holds
Japan refuses to accept Trump’s 25% automaker tariff on unfairness concerns
Odds & Ends
Commonwealth Bank board member Rob Whitfield to co-head ASX inquiry
South Australian gov’t introduces demands for ADNOC-Santos deal
ACCC declares no renewable gas will go to household stoves in next 40y
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