Week 20

AlbionDesign GmbH                                                      week 20/2022

Economically Ecological                               

€/$ 1.0518 ↘                    $/₽ 64.85 ↘    black market rate between 100-115 Rubles to the Dollar

EUA Dec 22 €88.01 ↗     API 2 Front month $325.00  ↗

Who is making money in this market? It’s not producers. If anything, those with the longest term signed 2 years ago are massively underwater and haemorrhaging cash...yet some still pay huge dividends. Feedstocks costs up, availability down, labour costs up, power up.. don’t expect a cheaper pellet for a while. Inflation is real and everyone needs to be ready to pay up.  

Overview:

·         PKS is heading to Poland in a trickle that could turn into a flood. Bureaucracy is holding up further purchasing  

·         Baltic feedstock prices are really at eye watering levels

·         Coasters are showing more availability in Azov and Baltics. Out of EU Black Sea it’s expensive.  

·         UK power is a short term, transitory, anomaly. This is not an argument to lower biomass offers.  

Demand:

·         The overall “winter profile” of biomass is flattening. Heating is making up less of the market. Summer highs

·         Incremental new growth continues unabated in markets that traditionally didn’t use biomass.

Freight:

·          Baltic Coaster – ARA  ↘ on week 19. €35/36 on 3kt                           it took long enough but the Baltic should be lower

·         Black Sea Coaster  ↗ on week  19. $60/62 on 3kt                               Constanza in now the EUs #1 grain port

·         Azov-Marmara Coaster  ↘ on week 19. $36/37                                    Overall way down but equally volatile

·          Handys/Supras  flat to down on week 19.                                    While the Baltic Indices are pushing higher it’s mainly larger vessels                                               

 Prices:                                                                                                                

·         Sunflower Husk European Production: ↗ FCA €244+

·         Olive Wastes S. Spain FOB: ↗ €N.A. FOB Sfax €137/tonne             

·         Wood pellet CIF ARA:  ↗  higher on week 19      Industrial quality & volume  $335                                               

·         Wood pellet A1 FOB Baltic non Russian/Belarus feedstock ↗ €280+

·         PKS FOB Indo/Malay  ↗ $145

Into ARA on the densified biomass 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.bbc.com/news/world-europe-61484222

·         https://news.sky.com/story/the-surreal-but-also-real-problem-of-britains-gas-glut-12614797

·         https://www.reuters.com/markets/commodities/exclusive-transneft-limits-access-monthly-russian-oil-loading-plans-sources-2022-05-17/

·         https://www.reuters.com/business/energy/requests-russian-gas-via-key-ukraine-transit-point-fall-zero-data-shows-2022-05-11/

·         https://www.ft.com/content/870d9b43-f4c1-4b8d-a1ec-384de654120c

·         http://www.biomassmagazine.com/articles/18962/enviva-reports-q1-challenges-accelerates-capacity-expansions

Numbers subject to change. These figures are indications and in no way a confirmation on tradable prices. For reference only.