Week 43

AlbionDesign GmbH                                                      week 43/2022

Economically Ecological                               

€/$ 1.00358 ↗                 $/₽ 64.9479 ↗                              black market rate between roughly 30% higher

EUA Dec 22 €76.88  ↗   API 2 Front month $269.25  ↗

Unseasonably warm weather mixed with limited and expensive supply of wood pellets, South African coal, and sunflower husk pellets has seen prices across the energy complex rise slightly. CO2 is volatile but trending higher. Overall, the market is as schizophrenic as it has been since February. The EUA is showing strong signals that carbon neutral fuels are looking as, or more, attractive than they ever have been.

Look around – you may be at a coal conference talking about olive wastes, or in Copenhagen talking to heavy industry. This never happened in the past.

 Prices:                                                                                                                

·         Sunflower Husk Pellet - EU Production: flat €380+

·         Russian Sunflower Husk Pellet CIF Med flat to higher €187/197

·         SBP Wood pellet CIF ARA  flat on week 42    Industrial $520                                           

·         Wood pellet A1 FOB Baltic flat on week 42  €575+

·         Certified PKS (dura) FOB Indonesia Q4 flat $170

·         Spent olive wastes ex Works Spain flat to higher €91/€95

·         Woodchips LT €40.94/MWh ↘ : LV €47.76/MWh 50.61 ↘ : EE €34.5/MWh ↗

Freight:

·          Baltic Coaster – ARA  flat  on week 42 €26/28 on 3kt                         

·         Black Sea Coaster  flat on week 42 $41/43 on 3kt                                

·         Azov-Marmara Coaster flat  on week 42. $65/68 on 3kt                  

·          Handys/Supras  ↘ on week 42.   About $17.5k on a 4 month time charter.                                                              

Overview:

·         Can you handle a handy? Freight is coming off, making deep sea voyages more economical

·         If your option is coal or biomass, coal is expensive. Petcoke users with flexibility might still find bio cheaper

·         Water levels on the Rhine are well above July/August levels and not forecasted to drop in the near future

·         Will BECC allow the UK to burn post 2027?

Demand:

·         Demand interest has remerged as this war shows no signs of ending and competing fuels remain pricey

·         The want and desire for biomass is huge. Getting the necessary logistics in place, first, is less appealing

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

Links and interesting reading:

·         https://www.bloomberg.com/news/articles/2022-10-25/too-much-gas-the-unexpected-twist-in-europe-s-energy-crisis

·         https://www.reuters.com/business/energy/eu-countries-try-map-out-path-gas-price-cap-2022-10-25/

·         https://www.energylivenews.com/2022/10/26/uk-off-track-to-meet-2030-climate-targets-government-data-shows/

·         https://www.cnbc.com/2022/10/26/uk-trial-will-inject-hydrogen-into-a-gas-fired-grid-connected-power-station.html

·         https://energynews.pro/en/green-light-for-a-contested-gasification-plant-in-tuscany/

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