Author: Fiona Craig

European and British wholesale natural gas prices were relatively stable on Monday following several weeks of gains, as traders assessed escalating military activity in the Middle East alongside signs of a partial recovery in regional energy supplies.

The benchmark Dutch front-month natural gas contract declined 0.2% to €74.50 per megawatt-hour, remaining close to its recent multi-week highs.

In Britain, the equivalent wholesale natural gas contract fell 0.5% to 187.00 pence per therm.

Middle East Developments Remain in Focus

Yemen’s internationally recognised, Saudi-backed government announced a military campaign aimed at retaking territory controlled by Iran-backed Houthi forces.

Houthi forces subsequently launched ballistic missiles and attack drones targeting Saudi Aramco energy facilities south of Riyadh, increasing concerns about potential disruption to regional energy infrastructure.

However, Saudi Arabia has partially restored operations on its East-West Pipeline and resumed tanker loadings from the Red Sea port of Yanbu following earlier disruptions, providing some recovery in regional supply operations.

European Gas Storage Remains Below Last Year

European gas storage levels remain a consideration for the market as the region approaches the winter heating period.

Underground natural gas storage across the European Union is approximately 12 percentage points below levels recorded at the same point last year, reducing the available inventory buffer in the event of colder weather or supply disruptions.

Bank of America analysts said higher energy prices associated with the Middle East conflict were contributing to inflation and interest-rate pressures, which in turn were weighing on economic growth.

However, the bank does not expect a significant recession driven by energy costs, saying that “energy prices and interest rates are not high enough to suppress demand.”

Eurozone business activity expanded at its fastest rate in more than three years in September, while the latest survey also showed an acceleration in input costs and selling prices.

The S&P Global Eurozone Composite PMI rose to 53.1 in September from 52.0 in August, reaching its highest level in 41 months. A reading above 50 indicates an expansion in activity.

Input costs and selling prices increased at their fastest rates since May, although both remained below their recent peaks. Price increases were more pronounced in manufacturing than in services.

S&P Global Chief Business Economist Chris Williamson said the survey data were consistent with inflation running closer to 4% than the European Central Bank’s 2% target and indicated that the combination of higher price pressures and stronger economic activity could increase expectations for tighter monetary policy.

Williamson said the PMI figures were consistent with eurozone GDP expanding at an annual quarterly rate of approximately 0.4%, with growth gaining momentum heading into the fourth quarter.

Services PMI Rises to 10-Month High

The Eurozone Services PMI increased to 53.0 from 51.6 in August, reaching its highest level in 10 months. Services activity expanded for a third consecutive month, while manufacturing output also increased at a faster rate.

Services companies raised their prices at the fastest rate since February 2024, while their input costs recorded the largest increase in four months.

IT-related services were among the sectors recording higher activity, supported by spending associated with artificial intelligence and growth in professional and business services. Consumer-facing services also continued to expand despite higher energy prices, particularly in Spain.

All five eurozone economies covered by the survey recorded growth for the first time since November.

Spain reported the fastest expansion, followed by Ireland. Growth in Germany accelerated to one of its highest rates since early 2022, while Italy and France recorded more moderate increases.

Services activity returned to growth in Germany and France, while Italy recorded a fourth consecutive month of expansion.

New Orders Increase at Fastest Rate in 41 Months

Demand for goods and services increased for a third consecutive month and at the fastest rate in 41 months.

New orders from overseas customers recorded their strongest increase in more than four-and-a-half years. New business in the services sector also increased for a third month, primarily reflecting domestic demand, while export orders were broadly unchanged.

Backlogs of work across the eurozone increased for the first time since June 2022. Employment rose slightly for a second consecutive month, although the rate of hiring in services slowed.

Businesses remained positive about activity over the coming 12 months, although confidence remained below historical norms. Manufacturing expectations improved to a seven-month high, while confidence among services companies declined.

METLEN Energy & Metals (LSE:MTLN) has agreed to supply gallium to a major Japanese chemical company under a long-term agreement covering up to 16% of the annual production planned from its new facility in Greece.

Financial terms of the agreement were not disclosed and METLEN did not identify the Japanese customer.

The agreement is the company’s second long-term supply deal for the metal in just over two months. In late July, METLEN announced an agreement to supply up to 25% of the facility’s planned output to a US technology company.

Together, the two agreements account for up to 41% of the plant’s future annual production capacity before commercial operations have started.

The facility is being developed with planned annual capacity of 50 metric tons of gallium. Commercial production is scheduled to begin in the third quarter of 2027.

METLEN said it expects the plant’s entire planned annual capacity to be contracted several months before commercial production begins.

Further supply agreements are expected, according to information obtained by Investing.com, with potential customers in the US and Japan among those that have expressed interest.

Greece Facility Targets European Gallium Production

Gallium is used in high-performance semiconductors, including applications in artificial intelligence infrastructure, power electronics, telecommunications and electric mobility.

China currently accounts for the majority of global gallium production and has previously introduced export restrictions, contributing to efforts by customers outside China to secure alternative sources of supply.

According to information obtained by Investing.com, METLEN is expected to establish integrated gallium production in Europe using feedstock from the refinery operated by its wholly owned Aluminium of Greece business.

“The international response to our gallium project continues to exceed expectations,” Executive Chairman Evangelos Mytilineos said. “The successive commercial agreements we are announcing demonstrate that global industry is actively seeking reliable, high-quality and diversified supply sources.”

Mytilineos has previously said METLEN also plans to produce other critical raw materials, including scandium and germanium.

More about METLEN Energy & Metals

METLEN Energy & Metals operates across the energy and metals sectors, including aluminium production and processing.

The company is developing gallium production capacity in Greece as part of its activities in critical raw materials.

Quartix (LSE:QTX) said annualised recurring revenue increased by £3.9 million to £39.7 million, representing growth of 11%, as the vehicle tracking and telematics provider maintained subscription growth across its core markets.

The company expects full-year revenue to be in line with market expectations, while adjusted profit before tax is forecast to be modestly ahead of expectations.

Quartix said the anticipated profit performance partly reflects cost savings that had originally been expected to be reinvested during the current year. That investment has now been deferred to 2027.

For the first nine months of the year, the company generated estimated free cash flow of approximately £4.7 million. Quartix ended the period with cash of £5.3 million and no debt.

Customer and Subscription Numbers Increase

Quartix reported trailing 12-month growth of 6% in its customer base and 7% in subscriptions.

The company recorded growth in France, Italy and Spain, while performance in the US was broadly flat. Net revenue retention was 97.3%.

Quartix also reported customer uptake of its new video telematics product in the UK and is preparing to introduce the offering more widely across its European markets.

Management said it remains confident that the company will meet its full-year expectations.

Separately, Quartix has appointed BDO as its external auditor following a competitive tender process. BDO replaces PKF Littlejohn.

More about Quartix

Quartix Technologies provides subscription-based vehicle tracking software and telematics services to commercial fleet operators across the UK, Europe and the US.

The company generates recurring revenue from its subscription base and provides fleet monitoring and video telematics products.

Sabien Technology Group (LSE:SNT) has ended commercial discussions with Haydale and SaveMoneyCutCarbon regarding a proposed UK distribution and implementation agreement for its M2G boiler optimisation technology.

The discussions had been continuing for an extended period but did not result in agreement on binding commercial and legal terms.

Sabien said it will instead pursue an independent growth strategy for M2G while seeking to work with a broader range of commercial partners.

The company said the decision provides greater clarity for its strategy as it seeks to develop an asset-light technology business and expand its commercial partnerships.

City Oil Field Review Suspended

Sabien has also suspended the strategic review of its interests in b.grn Group and City Oil Field, or COF, which had previously been announced by the company.

The decision follows what Sabien described as increasing commercial activity surrounding COF’s Regenerated Green Oil technology in Canada and the north-eastern United States.

The company said new business development activity is taking place in North America, while prospective Canadian counterparties are expected to visit COF’s facility in South Korea.

Development costs associated with the project are currently being funded at the b.grn level. Sabien said this means its shareholders retain exposure to the potential development of the COF technology without additional near-term funding requirements from Sabien.

The company has not committed to additional capital investment and said it retains flexibility over whether it participates in future funding.

More about Sabien Technology

Sabien Technology Group plc is a UK-listed energy efficiency technology company.

Its M2G intelligent boiler optimisation technology is designed to reduce energy consumption and carbon emissions from commercial heating systems and improve building energy efficiency.

Sabien holds the London Stock Exchange’s Green Economy Mark, which identifies companies and funds deriving at least half of their revenues from products and services contributing to the global green economy.