Week 34

AlbionDesign GmbH                                                      week 34/2022

Economically Ecological                               

€/$ 0.995 ↘                      $/₽ 59.99 ↘  black market rate between 100-115 Rubles to the Dollar

EUA Dec 22 €90.96 ↘     API 2 Front month $361.00  ↗

Gas burners, I feel for you. Wait a few years and there should be a lot more biogas available. Until then, brace yourselves. Freeport’s return to LNG has been pushed back, GazProm has gone full stupid, and prices are high on low liquidity. The consequences of overreliance on Putin’s piggybank are now visible: Aluminium smelters, Polish fert producers, possible winter black outs. For some good news, look at dry bulk freight currently: it’s down across the board. So if you actually do manage to find a solid to burn, at least the freight is less painful. However, I assume the higher FOB more than offsets the lower freight.

Overview:

·         Power and gas are skyhigh. Do not expect any utility to release pellets as their output is electron gold.

·         UK will lower the certification standards for winter. Unsure how much extra volume will come

·         Slightly wild west currently. Push your regulator and provide docs on possible new biomasses

Demand:

·         From where I’m sitting there is a lot of demand

·         As the EUA and coal/gas creep higher the economics of biomass look even better

·         Heavy industry seems further ahead the progress curve than lignite power stations

Freight:

·          Baltic Coaster – ARA  ↘ on week 33 €27/28 on 3kt                             

·         Black Sea Coaster  ↘ on week 33. $38/40 on 3kt                                 

·         Azov-Marmara Coaster  ↘ on week 33. $49/52 on 3kt                    

·          Handys/Supras  ↘  on week 33.                 About $17.5k on a 4 month time charter. Panamax and larger puking guts out                                                        

 Prices:                                                                                                                

·         Sunflower Husk Pellet - European Production: flat  €250+

·         Non-sanctioned Russian origin Sunflower Husk Pellet CIF Med     €175/185

·         SBP Wood pellet CIF ARA:  ↗ on week 33      Industrial quality & volume  $430                                     

·         Wood pellet A1 FOB Baltic non Russian/Belarus feedstock  €515

·         Certified PKS FOB Indo/Malay flat  $154

·         Spent olive wastes ex Works Spain flat to higher €82/€85

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/1345048/european-spot-power-surges-to-new-highs-as-crisis-deepens

·         https://www.montelnews.com/news/1345271/germanys-steag-aims-to-restart-two-coal-units-in-november

·         https://www.ft.com/content/9739c1cf-e7fd-4a32-95a1-3289de6b0367

·         https://oilprice.com/Energy/Energy-General/Finland-Braces-For-Rolling-Blackouts-This-Winter.html

·         https://www.baltpool.eu/medienos-birza/medienos-produktu-kainos/

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