Week 47
AlbionDesign week 47/2021
Economically Ecological
€/$ 1.12 ↘ $/₽ 74.46 ↗
EUA Dec 21 €69.65 ↗ API 2 Front month $146.00 ↗
CO2 hits new highs. Electricity is breaking records. Japan tendering extra 2 million tonnes of winter LNG. Curfews and lockdowns are slowing dripping back in Europe. Should we expect power & heat demand to decrease? The tug-of-war playing out globally is causing a lot of headaches. Amazingly, biomass has not experienced the same volatility.
Overview:
· The cold has yet to cause ice in the Baltic while coasters rates continue climbing.
· The wood pellet price increases are pushing users to explore more exotic feedstocks
· Location is important, but many consumers are accepting higher prices for green materials. While some energy intensive industries are slowing/cutting production due to power prices, some can pass it along.
Demand:
· Purchasing is strong and demand is rapidly increasing as parties become more comfortable with biomass
· The total demand is capped by how much conversion from coal/petcoke to biomass can be performed safely. If the gas crisis continues, expect some creative solutions to burn carbon neutral fuels
Freight:
· Deep sea is down but coasters are still on a roll, in both the North & South of Europe
· Baltic Coaster ↗– up €1.00 on week 46. Incredible numbers on the back of extremely tight availability.
· Black Sea Coaster ↗ €1.00. Could this be the last push of the year to get Russian grain out?
· Azov-Marmara Coaster ↗ – same as above. Russian rivers will close for the winter and the grain must move
· Geared deep-sea vessels are coming off in the Atlantic and Pacific basins making coasters look luxurious.
Prices:
· Sunflower Husk Pellet Baltic: <-> Spot 60 days FOB €121+-
· Sunflower Husk Pellet Black Sea: ↗ Spot 60 days CIF 3kt coaster Constanza/Varna/Burgas 3kt $174
· Wood pellet I2 quality East Med: ↗ Spot 60 days FOB $155
· Wood pellet CIF ARA: ↗ Q1 + Q2 - $210+
Into ARA on the sunhusk deduct $1+- for every additional 1kt as there is a freight saving.
Links and interesting reading:
· https://circabc.europa.eu/sd/a/2c8378ab-c686-449d-9dd1-65371ab30889/Oilseeds-dashboard_en.pdf
· https://www.danskenergi.dk/sites/danskenergi.dk/files/media/dokumenter/2017-09/BiomassForEnergy.pdf
· https://www.japantimes.co.jp/news/2021/11/23/business/euro-gas-crunch/
· https://www.ft.com/content/a06df5b2-58ff-46f2-920d-a5ebaca68b11
· https://www.hellenicshippingnews.com/
· www.splash247.com
Numbers subject to change. These figures are indications and in no way a confirmation on tradable prices. For reference only.
