Week 25

23 Jun

AlbionDesign GmbH week 25/2022

Economically Ecological

€/$ 1.0512 ↗ $/₽ 53.61 ↘ black market rate between 100-115 Rubles to the Dollar

EUA Dec 22 €81.94 ↘ API 2 Front month $345.00 ↗

There is no real market now due to a lack of fungibility across varying markets’ local certification and quality requirements. To the right buyer at the right time, if a volume appears on your radar that ticks all the boxes that you need, you will pay anything for it. For something nearly your usual spec that shows up, you might start thinking creative about how to buy it. ISCC, SURE, SBP, A1, DIN, Light colour, extra hard... with Russia gone and overall demand expanding it seems a difficult time if your regulator/customers require multiple certificates and specs.

Overview:

· Natural Gas keeps its epithet Widow Maker. Impressive volatility across EU gas markets

· Coal futures have had huge gains since the start of the war. Vs gas the volatility looks relatively calm

Demand:

· How much over lapping capacity is there across gas, coal, 100% bio & co-fired? Biomass is comparatively cheap. So, there is a lot of demand and the potential do substitute vs coal is large with minimal capex

· With biomass extending its spread vs coal more industries, higher up the value chain, explore biomass

Freight:

· Baltic Coaster – ARA flat on week 24 €33/34 on 3kt

· Black Sea Coaster ↘ on week 24. $60/62 on 3kt

· Azov-Marmara Coaster ↗ on week 24. $40/45

· Handys/Supras ↘ on week 24. About $24k on a 4 month time charter. Panamax and larger coming off highs

Prices:

· Sunflower Husk European Production: ↗ FCA €250+

· Wood pellet CIF ARA: ↗ higher on week 24 Industrial quality & volume $350

· Wood pellet A1 FOB Baltic non Russian/Belarus feedstock ↗ €310+

· PKS FOB Indo/Malay ↗ $155

Into ARA on the densified biomass deduct $1+- for every additional 1kt as there is a freight saving.