Week 29

20 Jul

AlbionDesign GmbH week 29/2022

Economically Ecological

€/$ 1.024 ↗ $/₽ 55.66 ↘ black market rate between 100-115 Rubles to the Dollar

EUA Dec 22 €83.41 ↘ API 2 Front month $320.00 ↘

Volatility looks likely to stay for a while, ruining our summer plans and making contract discussions very difficult. Apart from cattle and cocoa, we are well off the highs across all major commodity sectors in March/April. Biomass is no different. While prices have remained at highs, the panic feeling has abated.

This is neither a buyer’s nor seller’s market, currently. It is a hot mess. Unfortunately, there is no good hedging mechanism and very few (none) sophisticated producers that can hedge costs. Add to that, their relatively poor credit quality and one wonders why it is so hard to come up with a long term number. 😉

Overview:

· Europe is preparing for less gas and more coal. Germany gas reserves lower than desired. 60+-% vs 85%

· Handys and supras have seen minor gains while larger vessels have dropped slightly.

Demand:

· Solid fuels are back! More coal will lead to more co-firing.

· Biomass still provides the cheapest calorie currently (ex RDF etc).

· When local standards have dropped A1 requirement, we’ll see plenty of demand coming

Freight:

· Baltic Coaster – ARA ↘ on week 28 €29/30on 3kt

· Black Sea Coaster ↘ on week 28. $47/49 on 3kt

· Azov-Marmara Coaster ↗ on week 28. $47/51

· Handys/Supras ↗ on week 28. About $20k on a 4 month time charter. Panamax and larger coming off highs