Week 40
AlbionDesign week 40/2021
Economically Ecological
€/$ 1.1569 $/₽ 72.54
EUA Dec 21 €62.08 API 2 Front month $274
The marginal cost of no power/heat to a household is death. Coal is at new levels. Power is at new levels. Utilities have their natural hedge and if things get tricky governments will step in. Heavy industry is not in the same position to be indifferent to input costs.
Overview:
· Low fuel stocks and increasing demand, coupled with several supply constraints, have sent all energy markets into new territory. Coal, piped Gas, LNG are all at record levels. However, extremely high electricity prices allow the utilities to keep bidding higher.
· Short covering of TTF futures will likely send EU gas higher.
· Spot transport is expensive and hard to come by. October is a large agricultural exporting month meaning tough competition on coasters, Russian rail wagons, and .
· Russia cuts SunOil export duty to $194.5. Expect crushing rates to increase ∴ increased husk supply
Demand:
· The demand for fuel is universal and bidders outweigh sellers. Utilities can outbid cement and lime for coal as the fuel increase is offset by extremely high electricity costs. Utilities are indifferent in the short term.
· Increasing inquiries and trialing from heavy industry continues.
Freight:
· Baltic Coaster – up on last week. Agri exports are finding higher rates. Charterers having to accept offers.
· Black Sea Coaster – up on week 39. Market feeling that we have reached the peak.
· Azov <–> Marmara Coaster – up slightly on week 39. Russian export taxes are key to watch.
Prices:
· Sunflower Husk Pellet Baltic: Spot 60 days FOB €110+-
· Sunflower Husk Pellet Black Sea: Spot 60 days CIF 3kt coaster Constanza/Varna/Burgas 3kt $140
· Wood pellet I2 quality East Med: Spot 60 days FOB $125
Into ARA on the sunhusk deduct $1+- for every additional 1kt as there is a freight saving.
Links and interesting reading:
· https://circabc.europa.eu/sd/a/2c8378ab-c686-449d-9dd1-65371ab30889/Oilseeds-dashboard_en.pdf
· https://www.agricensus.com/vegoil-news/
· https://www.theice.com/products/197/EUA-Futures/data?marketId=5115279&span=2
Numbers subject to change. These figures are indications and in no way a confirmation on tradable prices. For reference only.
