UK-based hydrogen power company AFC Energy has renewed its collaboration with Air Products, the world’s largest hydrogen producer, extending their partnership for 5 more years.

AFC Energy shares over 5% in early trade on Tuesday after the renewed deal confirmed AFC Energy’s commitment to the expanding European hydrogen market.

AFC Energy will repurpose its existing hydrogen fuel cell facility in Stade, Germany into a site for factory acceptance testing (FAT) of its H-Power hydrogen fuel cell systems. The move leverages the site’s existing hydrogen infrastructure and grid connection, requiring little investment.

The facility will employ local staff to test systems prior to customer deployment, positioning AFC Energy to support growing deployments in Germany and Europe where hydrogen adoption is accelerating. Germany was chosen partly due to far lower hydrogen fuel prices compared to the UK, delivering major cost savings.

Given rapid growth expected in the European hydrogen market, especially Germany, establishing a footprint there is strategic for AFC Energy. The company is also assessing potential co-location of a development and manufacturing facility in Germany, benefitting from its extensive fuel cell supply chain and skilled manufacturing.

Adam Bond, Chief Executive Officer at AFC Energy, said: 

“The repurposing of our Stade facility creates a solid footprint within Germany and the wider EU hydrogen market whilst providing a cost effective path for our H-Power Generator factory acceptance testing programme. The market for zero emission off-grid power generation continues to grow internationally with our Stade facility now set to become a further catalyst in the delivery of H-Power Generators within one of the world’s fastest growing hydrogen markets.”

The FTSE 100 started the week on the back foot after a raft of Chinese economic data provided further evidence the world’s second-largest economy’s recovery from the pandemic was facing major obstacles.

Chinese GDP missed analyst expectations and came in at 6.3% v forecasts of 7.1%. Retail sales data came in lower than consensus estimates.

• 2Q GDP GROWS 6.3% Y/Y; EST. 7.1%
• JUNE RETAIL SALES RISE 3.1% Y/Y; EST. 3.3%
• JUNE INDUSTRIAL OUTPUT RISES 4.4% Y/Y; EST. 2.5%

“The FTSE 100 has relinquished some of the gains it accumulated last week on weaker-than-expected Chinese economic data. China’s GDP rose 6.3%, which was higher than last quarter but some way below expectations,” said Sophie Lund-Yates, lead equity analyst at Hargreaves Lansdown.

“The sheer scale of China’s economy means a perceived stalling in the post-pandemic recovery has ramifications for global demand and economies. There’s also little news to distract the market from looming UK inflation data later this week, with the UK poised to assess the latest reading and what this will mean for the interest rate trajectory.”

The FTSE 100 started the week down around 0.4% before buyers stepped in and helped close the gap from Friday’s close. As the session progressed, the FTSE 100 fluctuated in negative territory was down 17 points to 7,417 at 13.30pm in London.

Oil was weaker, with Brent trading down around 0.8% to $78.17 at the time of writing.

FTSE 100 movers

Weakness in commodities hit the FTSE 100’s natural resource constituents with miners suffering. Glencore fell 2.5%.

Ocado was down 2.8% ahead of half-year results due to be released tomorrow. The company’s retail business has suffered since the pandemic and the group as a whole is experiencing an identity crisis with some focused on average basket sizes of their food delivery service while speculation swirls Amazon are eyeing their technology business and are preparing a bid. Neither Amazon or Ocado have commented on takeover talks.

Johnson Matthey was the FTSE 100 top riser after Deutsche Bank raised their rating to buy with a 2,500p price target.

There were few other gainers of note.

The FTSE 100 was heading into the weekend with a further gain on Friday after what AJ Bell analysts have called a ‘blockbuster’ week.

Softer US inflation data and a continued rally in US tech stocks lifted sentiment and helped the FTSE 100 recover from the worst levels since December 2022.

The FTSE 100 traded 0.3% higher to 7,463 at 13.20pm on Friday. The FTSE 100 touched 7,230 last Friday.

“The FTSE 100 squeezed out another drop of happiness at the end of what’s been a positive trading week for equities. The UK blue chip index rose six points to 7,446, putting it on track to end the week 2.6% higher as US inflation pressures ease, raising the hope that the Federal Reserve is near to the end of its interest rate hike cycle,” said Danni Hewson, head of financial analysis at AJ Bell.

FTSE 100 movers

A 17% rise in reported retail revenue failed to spark interest in Burberry shares on Friday as shares slipped 0.1%.

“Burberry has reported a 19% jump in retail revenue for its first quarter, as the luxury giant proves it’s still very much flavour of the month overall, said Sophie Lund-Yates, lead equity analyst at Hargreaves Lansdown.

“Underneath the hood, things aren’t quite as rosy as they might appear though. A large reason for the uplift stems from a rebound in demand from Asia and especially mainland China, after restrictions this time last year dented performance. European tourists also helped tow the top line in a big way. This increase helps to mask an 8% drop in the Americas, where a reduction in domestic spending was only partially offset by people spending abroad.”

Spirax-Sarco Engineering was the FTSE 100 top gainer after being upgraded to buy by analysts at UBS. A buy rating for AstraZeneca helped the pharma giant 2% higher. HSBC started Astra as a buy with a 13,250p target.

Croda International was the top faller after Barclays analysts cut their price target to 6,600p. Croda was down 2.2% to 5,678p at the time of writing.