Week 28 2023

AlbionDesign GmbH                                                      week 28/2023

Economically Ecological                               

€/$ 1.10281                        ↗                                         API 2 Front month $100.70    ↗

EUA DEC 23 €86.97          ↘                                          EUA DEC 24 €91.53                  ↘

With temperatures reaching historical global highs day after day it’s hard to focus when sweat beads into one’s eyes.

The market for wood pellets has, likewise, had trouble focusing on where it wants to go. Mr/Ms Market can’t seem to decide which random walk to take. Prices are pretty much flat in whatever niche is currently picking up volumes in small doses.

The non wood pellet market, was, is, and forever shall be more fragmented and local in nature. Thus, things happen but in different ways. Prices and price expectations whipsaw on weather forecasts, soil moisture, and whether the changes to the FiT will suck up more SE Asian agri residues.

By the way, have a look at the 3 year TTF data or API II going further back. Everyone needs to keep a cool head.

It almost feels like prices are reverting to their long-term mean; surprise, surprise.

 Prices:

·                     Sunflower Husk Pellet - EU Production: flat: €105

·                     Russian Sunflower Husk Pellet CIF Med ↘: €120/125

·                     SBP Wood pellet CIF ARA  flat on week 27 $180                  

·                     Wood pellet A1 FOB Baltic flat on week 27 €195+

·                     Certified PKS (dura) FOB Indonesia Q2 flat $130

·                     Spent olive wastes ex Works Spain slightly lower  €120/€124

·                     Baltpool Woodchips Lithuania  €22.19/MWh ↘ Latvia/MWh €19.09 ↗ Estonia €18.00/MWh ↗  

Freight:

·                      Baltic Coaster – ARA  flat  on week 27 €22/23 on 3kt                         

·                     Black Sea Coaster  slightly lower on week 27 $21.5/22.5 on 3kt                    

·                     Azov-Marmara Coaster  ↗ on week 27 $37/$41 on 3kt                   

·                      Handys/Supras  flat on week 27.                                                                               

Overview:

·                     Industrial biomass sentiment  is driven by the UK. Without the UK there is little to support large cargoes.

·                     Industrial activity in the EU is cooling

Demand:

·                     Personally, optimistic about demand in the near-ish term. Less bullish on prices for industrial vs residential

·                     Purchasing patterns are changing as local markets adapt to overly dry or overly wet farm conditions

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

Links and interesting reading:

·         https://www.montelnews.com/news/1509635/well-stocked-coal-market-tracks-gas-lower

·         https://www.hellenicshippingnews.com/sgx-iron-ore-retreats-from-1-month-low-on-china-stimulus/

·         https://www.rhineforecast.com/

·         https://circabc.europa.eu/sd/a/2c8378ab-c686-449d-9dd1-65371ab30889/Oilseeds-dashboard_en.pdf

·         https://biomassmagazine.com/articles/20172/paper-and-packaging-slowdown-impacts-wood-fiber-prices

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