This morning in metal news, a new report paints a positive picture for jobs in the renewables sector, Moody’s downgrades China’s credit rating, and the results of the OPEC meeting are in. The current supply cuts will be extended for another nine months, and oil prices tumbled on the news.
OPEC Agrees on 9-Month Extension of Supply Cuts
Let’s start with the big headline of the morning. As expected, the Organization of Petroleum Exporting Countries (OPEC) has agreed to extend supply cuts for another nine months, until March 2018.
After OPEC wrapped up its first meeting in Vienna around 3:30pm CEDT (8:30am CDT), oil prices responded over the next few hours by sliding 4.5% to $51.60 per barrel. Some industry analysts think OPEC should have agreed to deeper cuts. As The Guardian reported, OPEC is “sticking to the 1.8 [million] barrel a deal first agreed in late November.” Russia and other oil producing non-OPEC members are also expected to go along with the supply cuts.
Forget Bringing Back Coal Jobs
The burgeoning renewable energy sector employed 9.8 million people in 2016, according to the latest annual report released by the International Renewable Energy Agency (IRENA). Global employment in the sector has been growing every year since 2013, and there may be as many as 24 million renewables workers worldwide by 2030.
As of last year, solar energy is the biggest employer of the renewables industry, with 3.1 million workers. This marked a 12% increase from 2015. If we compare the solar industry in the U.S. to the country’s overall economy, the former grew 17 times faster than the latter. And while the U.S. remains a key market, it is far from the most promising. Earlier this morning, Sohrab Darabshaw wrote about the Indian government’s commitment towards renewable energy, and fittingly, the IRENA report shows that 62% of renewables jobs in 2016 were located in Asia.
China’s Credit Rating Downgraded
Moody’s Investors Service downgraded China’s credit rating yesterday from A1 to Aa3, Reuters reported. The downgrade, China’s first since 1989, “reflects Moody’s expectation that China’s financial strength will erode somewhat over the coming years, with economy-wide debt continuing to rise as potential growth slows,” as the ratings agency announced in a statement.
A displeased Chinese Ministry of Finance has retorted that Moody’s overestimated risks facing the Chinese economy and used “inappropriate methodology.” In recent months, economists have warned that China is heading towards a banking crisis as a result of accelerated credit growth.