November 9th 2023
Tank Storage Market Report
National Holidays: Monday, November 20th
Grains and Markets:
Egypt has purchased 34,000 tons of soya bean oil and 27,500 tons of sunflower seed oil for January and February dates.
Egypt is also in the market for a Panamax of soya bean in January.
Venezuela is in the market for a Supramax of soya bean meal in December.
Iran is still open on their tender for 180,000 tons of maize on November-December dates.
Mv CYMONA PRIDE – Grounded at Km 104 Martin Garcia Canal:
The mv CYMONA PRIDE remains grounded at Km 104 of the Martin Garcia canal since Friday 3rd at about 11:30 hours.
She was proceeding in loaded condition with a cargo of 41,000 tons of iron ore from Brazil to Villa Constitución (Acindar) on about 9.90 meters draft.
At this time she is being assisted by three tugs to free from the grounding.
CoastGuard traffic control have restricted navigation in the area to vessels not over 200 meters LOA, 7 meters draft and only during daylight.
Navigation to Upriver ports is proceeding along the Emilio Mitre Canal and is not otherwise affected.
ODIN-RVB Storage Market Report – October/November 2023:
We share with you the report prepared by our friends at ODIN-RVB:
Tank Storage Market Report
In October, the Oil and Gas industry witnessed two significant mergers. On October 26th, Chevron announced its plans to acquire the oil and gas company Fess for USD 53 billion in stock. Less than two weeks after, ExxonMobil made its own announcement, revealing its acquisition of the oil company Pioneer Natural Resources for USD 59.5 billion in stock. These acquisitions indicate that the major oil companies are not foreseeing an end to fossil fuels in the near future, affirming their commitment to the industry and oil production in the coming decades. The International Energy Agency (IEA) released its annual World Energy Outlook, projecting that global demand for coal, oil, and natural gas will reach an all-time high by 2030. Additionally, the IEA stated that the transition to clean energy is happening worldwide and is unstoppable! However, based on their recent acquisitions, it appears Chevron and Exxon are preparing for a different world compared to the one foreseen by the IEA.
Last month, we reported that terminals in North-West Europe have been struggling with lower throughput numbers at their facilities. At the end of October, the Port of Rotterdam released their third-quarter figures on transshipped volumes, confirming the same trend. For all liquid bulk, there was a 2.4% decrease in total volume reported for the first 9 months of 2023, compared to the same period last year. Crude Oil volumes dropped by 1.9%, primarily due to increased maintenance activity at European refineries. A 3.1% decrease was observed in mineral oil, mainly as a result of the Russian sanctions, which reduced the volume of fuel oil transported through Rotterdam. Volumes for other liquid bulk segments, including chemicals, biofuels, and vegetable oils, were 3.5% lower compared to the previous year. This decline can be attributed to higher energy costs and lower occupancy rates at European factories, leading to depletion of existing volumes.
Oil – Petroleum
With the ongoing conflict between Israel and the militant group Hamas, oil markets remain on edge after Iran warned the conflict could escalate across the Middle East. The region’s energy infrastructure and key shipping chokepoints, including the Suez Canal and the Strait of Hormuz, are at risk should the conflict spread. This escalation could lead to a significant increase in oil prices and have a profound impact on the oil supply. The United States and its allies maintain a substantial military naval presence at these shipping chokepoints to ensure they remain open to trade flows.
On October 18th, 2023, following the signing of an “electoral roadmap” between the Maduro government and the political opposition, the Biden administration announced a significant relaxation of U.S. sanctions on Venezuela. However, on October 30th, the return of Venezuelan crude exports seemed in jeopardy after the Venezuelan Supreme court ordered the suspension of the election results. In response, the U.S. urged president Nicolas Maduro to uphold their political roadmap agreement with the opposition. For many years, India and China have been among the largest customers for Venezuelan crude oil. With the lifting of the sanctions, there will be increased competition for these Latin American cargoes. At the time of writing, West Teas Intermediate (WTI) crude oil is trading at USD 82.56 per barrel, while Brent crude is priced at USD 87.77 per barrel.
It was in the line with expectations, but following the Netherlands; initial introduction of legislation in April to tighten the specifications for fuel exports to West Africa, Belgium’s environment and energy ministers are currently planning to introduce their own draft rules to tighten the quality of exported fuels. This would further reduce Northern Europe’s role in supplying Africa with ‘dirtier’ gasoline and diesel.
All in all there remain high levels of volatility within the oil industry, and this is causing traders to take a look at positions. Several oil majors and trading houses are currently evaluating storage possibilities for diesel, fuel oil, and gasoline in 2024, and reconsidering their positions in anticipation of further price increases due to uncertainties in supply resulting from potential escalations in the Middle East. There may be current and upcoming opportunities that align with your needs. Please let us know your requirements, and we will be happy to check for potential matches that suit your preferences.
Lackluster economic growth, high inflation rates and a corresponding increase in interest rates have dampened the demand for chemicals in the West this year. Additionally, capacity expansion in China and a slow recovery in the country’s economy have also constrained the overall growth in the chemical trade in 2023. Meanwhile, the global organic chemicals market grapples with overcapacity as supply has outpaced demand because of rapid expansion of production capacity in China. With the ongoing overcapacity, operating margins and plant operating rates outside China have dropped. Persistent overcapacity will force old and inefficient plants to shut down, but the market will still require time to rebalance. Despite healthy growth in the methanol trade, overall organic trade declined this year as paraxylene, styrene and glycol trades were constrained.
Not all news in the segment is negative, as Dow has commenced commercial operations of its new MDI plant in Freeport, Texas, to replace its capacity in La Porte, Texas, and is expected to supply an additional 30% of product. In addition, Methanex has plans to reopen its Methanol plant in Trinidad and Tobago after securing a new gas supply contract.
Reviewing enquiries received during October, we still noticed some limited requirements for smaller volumes, primarily in the ARA and the Mediterranean region. It is anticipated that the chemical trade will regain momentum again after 2024, with recovery in global economic growth leading to an increase in chemical demand. Biodiesel, UCO, and methanol trades will continue to benefit from the expected surge in demand for clean energy.
Market conditions for exporting Chinese used cooking oil to the US are expected to persist in the coming months due to incentives from the Inflation Reduction Act. However, outflows to Europe have declines as a result of the EU’s investigation into allegations of fraud regarding volumes from China.
Sustainable aviation fuel (SAF) is gaining traction and attracting increased interest from multiple global players. Two main issues are strongly correlated with the production of SAF. The first issue is the increased competition to obtain feedstock for fuel production, which necessitates keeping SAF prices high. The second issue pertain to additional refining requirements and lower production yields. It is anticipated that air travelers will face a permanent increase in airfares for the successful transition of the industry to SAF. Regarding feedstock, Indonesia recently executed its first commercial flight using palm oil-blended jet fuel. This blended jet fuel is produced using hydro processed esters and fatty acid (HEFA) technology and is derived from refined, bleached, and deodorized palm kernel oil.
Activity within biofuel segment has picked up since June/July, but is yet to reach the levels seen in 2022. Depending on specific requirements, there are opportunities for storage in various locations with stable prices.
On October 10th, Iran imposed an immediate ban on soybean and sunflower oil imports. The reason for this action was most likely due to an oversupply of oil in the market and aiming to prevent further price reduction. This news had an immediate impact on the regional sunflower oil market, as offers for delivery to Turkey fell by USD 25/mt to USD 820/mt CIF Mersin. The ban is further expected to lead to an excess supply of vegetable oil from Russia in the global markets. Iran is one of the major buyers of sunflower oil from Russia, accounting for approximately 40,000 mt per month. It remains uncertain for how long the ban will be maintained, as Iran often changes its policies without clear justifications.
Additionally, rapeseed import to the EU were 38% lower in the first quarter of the running crop year compared to a year ago. Demand for storage of vegetable oils has been low in recent months. Perhaps the (temporary) oversupply will cause a spike in requests for parties to be able to store excess oil for a period of time and/or cause inventories to rise due to cheaper product availability.
Hydrogen, and its role in the new energy economy continues to be one of the most discussed topics at conferences, seminars, and meetings, at the moment. Rotterdam has officially started construction on October 27th on its planned 1,200 km hydrogen pipeline. With the initial section being a 30-km section expected operational in 2025. It will link the new Tweede Maasvlakte port in Rotterdam to Pernis, where Shell has its refinery. The wider network is intended to link major industrial clusters in the Netherlands, as well as cross-border connections to Germany and Belgium from 2030 onwards.
Following the introduction of shipping into the EU-ETS, where CO2 emissions generated from sea transport will be subject to taxation starting in 2024, the European Commission has recently outlined a strategy to regulate methane emissions from imported fossil fuels beyond 2030. This strategy comprises three phases of implementation. The first phase entails the establishment of a methane transparency database and the publication of methane intensity profiles for EU countries, as well as for oil, gas, and coal exporters. Additionally, it includes the creation of a global methane emitter monitoring tool by 2026, which will provide information about the magnitude, recurrence, and location of high methane-emitting sources. In the second phase, by 2028, the European Commission plans to impose an obligation on importers to demonstrate their compliance with the authorities of the Member State where the fossil energy enters the EU market. Moreover, a methodology for calculating the methane intensity of upstream oil production will be developed. Importers will then be required to report the verified methane intensities of the companies from which they import. Ultimately, in the third phase, the commission will mandate imports to meet a specific level of methane intensity performance by 2030.
STS BUNKER AT ZONA COMUN FOR NEXT DAYS:
As always, the STS operation is up to the discretion of the Masters of the vessels involved.
Will keep you posted.
Antares Servicios Maritimos S.A.
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