Week 22

1 Jun

AlbionDesign GmbH week 22/2022

Economically Ecological

€/$ 1.0715↗ $/₽ 61.23 ↗ black market rate between 100-115 Rubles to the Dollar

EUA Dec 22 €84.68 ↗ API 2 Front month $310.00 ↗

Greenwashing is bad: look no further than crisis prone Deutsche Bank & DWS. Insuring Russian oil cargoes is bad, too. So hopefully, both the issuance of policies to shipowners and overpromising on vague details of being green have seen their last days. What happens now at the petrol station might be more important in the short term.

With all of the stars aligned for greater adoption of solid biomass the underlying issue is the production capacity holding back the floodgates. Another issue is cost - To the buyer it looks “historically” high. While the producers, rightfully, claim that production costs are through the roof.

Coal is historically high, as is gas & the EUA. Keep looking at your total cost per Joule/MWh. Biomass may not look so bad, after all. Producers won’t produce at a negative margin. If it doesn’t make dollars, it doesn’t make sense.

Overview:

· There is no hiding from inflation. Every producer, hauler, distributor etc has higher costs that 12 months ago.

· Have a look at the firewood (malkos/malka) prices in Lithuania and Latvia.

· The Baltic Coaster is down slightly for the first time in a long time.

Demand:

· In June prices are rising and reaching beyond levels ever discussed before. There is a huge shortage of pellets

· If you want big volumes be prepared to invest alongside an established actor. You’ll get volumes. Price?

Freight:

· Baltic Coaster – ARA flat on week 21. €34/35 on 3kt

· Black Sea Coaster ↗ on week 21. $65/67 on 3kt

· Azov-Marmara Coaster ↘ on week 21. $36/37

· Handys/Supras flat to marginally down on week 21.