Week 9 2023

AlbionDesign GmbH                                                      week 09/2023

Economically Ecological                               

€/$ 1.06104                       ↘                                         API 2 Front month $140.9      ↗

EUA Dec 23 €93.38           ↘                                        EUA DEC 24 €98.34                    ↘

Biomass from wood pellets to wood chips, PKS to agri residues continue dropping while freight seems to have stabilised or, at least, taken a  break from dropping.

Wood pellet producers continue suffering from high production costs. Costs have come down but prices have fallen further making this a difficult situation, likely to get worse in the short term.

 Prices:

·                     Sunflower Husk Pellet - EU Production: ↘ €135+

·                     Russian Sunflower Husk Pellet CIF Med ↘ €165/170

·                     SBP Wood pellet CIF ARA  ↘ on week 08 Industrial $205               

·                     Wood pellet A1 FOB Baltic ↘ on week 08 €205+

·                     Certified PKS (dura) FOB Indonesia Q1 flat $130

·                     Spent olive wastes ex Works Spain flat  €140/€145 

·                     Baltpool Woodchips LT €23.89/MWh ↘: LV €34.83/MWh ↗: EE €23.28/MWh ↘

Freight:

·                      Baltic Coaster – ARA  ↘: on week 08 €23/25 on 3kt                            

·                      Black Sea Coaster  ↘: on week 08 $32/34 on 3kt                                 

·                     Azov-Marmara Coaster  ↘: on week 08 $67/70 on 3kt                    

·                      Handys/Supras  flat on week 08.               About $9.0k on a 4 month time charter.                                                                

Overview:

·                     Plentiful stored volumes, low heating demand and less demand means prices keep falling

·                     While feedstock prices and electricity have come down, wood pellet producers are not fairing any better

·                     Coasters have stopped tumbling and are taking a breather but the demand from charterers remain weak

·                     Small pockets of cold are doing nothing to arrest declines in €/GJ

Demand:

·                     The intrinsic value of biomass remains better than coal. Logistics to store it are not there yet for many

·                     Matching supply and demand is completing a puzzle. Matching exact specs isn’t always straightforward

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/1447791/europes-coal-imports-fall-to-1-year-low-in-february

·                     https://www.ft.com/content/bfc32042-6193-48f6-aa5a-481c8e6e2790

·                     https://biomassmagazine.com/articles/19804/new-zealand-power-producer-successfully-trials-torrefied-biomass

·                     https://www.hellenicshippingnews.com/baltic-index-hits-near-two-month-high-on-stronger-vessel-demand/

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