Marine fuel global weekly market update
A weekly Argus news digest of interest to the conventional and alternative marine fuel markets. To speak to our team about accessing the stories below and access to Argus Marine Fuels, please contact: marinefuels@argusmedia.com.
Alternative marine fuels
9 June Rotterdam LNG share of bunker demand to rise LNG as a share of the Rotterdam bunker market may surpass 3pc this summer as LNG prices dip below conventional marine fuels.
9 June Indonesia's palm waste exports down on month in April Indonesia's palm waste exports decreased in April on the back of International Sustainability and Carbon Certificate (ISCC) withdrawals because of alleged fraudulent practices, curtailing China's import volumes from the southeast Asian country.
9 June Demand needed to drive new fuel supply: Nor Shipping More demand is needed if zero-carbon shipping fuels are going to become the norm, shipping industry leaders told attendees at the Nor-Shipping conference in Oslo this week.
9 June Iberdrola to build green ammonia plant in Spain Spanish utility Iberdrola plans to build a green ammonia plant in the south of the country following an agreement with ammonia trader Trammo for the purchase and sale of up to 100,000 t/yr of green ammonia from 2026.
8 June Japan's Asahi Kasei buys bio-methanol from Mitsui Japanese petrochemical producer Asahi Kasei has started purchasing bio-methanol from Japanese trading house Mitsui to produce bio-engineering plastic, amid growing pressure to decarbonise.
8 June Price goal of $100/t CO2 is 'unrealistic' for DAC The much talked about goal of $100/t of CO2 for direct air capture (DAC) is "not at all realistic", and firms should be careful about "lowballing" costs, delegates heard at an industry event this week.
8 June Policy, costs make US key clean ammonia supplier The US is uniquely positioned to become a principal exporter of clean ammonia within the next decade despite price-related challenges that remain in play, delegates said Wednesday at the Argus Clean Ammonia North America Conference in Houston, Texas.
8 June Klapedia, Proman agree on methanol bunkering The Port of Klapedia in Lithuania is adding methanol bunkering capability to its operations.
8 June Japan's Mol to charter LNG-fuelled bulk carrier Japanese shipping firm Mitsui OSK Lines (Mol) has agreed to charter a new LNG-fuelled bulk carrier for utility Kansai Electric Power to deliver coal from Kansai's Maizuru power complex, targeting commissioning in 2026.
8 June Iran's methanol output dips on squeezed margins Production at methanol units in Iran is expected to dip in June, with some producers opting to cut operating rates because of weakening margins.
8 June IMO must boost emissions targets: Maritime group The head of a Norwegian maritime group said the UN's International Maritime Organization (IMO) must adopt a more ambitious emissions goal to meet a zero-emissions target by 2050.
8 June Titan LNG charters new bunkering vessel Dutch shipping firm Titan LNG has signed a long-term charter with Italian bunker supplier and shipowner Fratelli Cosulich for its 8,200m³ Alice Cosulich LNG bunkering vessel.
7 June Royal Caribbean to test biofuel on two ships US cruise ship operator Royal Caribbean will test a biofuel blend in two of its ships as part of its research on using alternative marine fuels.
7 June Monjasa's total CO2 emissions rose in 2022 Total direct CO2 equivalent emissions put out by Danish marine fuel and trading company Monjasa rose between 2021 and 2022, according to its 2022 responsibility report.
7 June VLGC owner Avance Gas enters MGC market Oslo-listed shipowner Avance Gas has purchased two newbuild LPG/ammonia vessels and entered the midsize gas carrier (MGC) market.
6 June Stena mulls sale of LNG assets Swedish shipping firm Stena is considering selling some or all of its LNG assets.
6 June X-Press Feeders orders six methanol-fuelled ships Singapore-based shipping company X-Press Feeders has ordered six 1,250TEU methanol dual-fuelled containerships.
6 June Ardmore orders 3 more CO2 capture units to MR tankers Ireland-based shipping company Ardmore Shipping will retrofit three of its Medium Range (MR) tankers with CO2 capture systems.
6 June China biodiesel sector responds to EU policy proposals Chinese biodiesel stakeholders have responded to calls from European waste-based and advanced biofuels association (Ewaba) for policy measures to address stronger Chinese biodiesel exports to the EU.
6 June WinGD partners with Mitsubishi on ammonia engines Swiss marine power company Winterthur Gas and Diesel (WinGD) has partnered with Japanese shipbuilder Mitsubishi Shipbuilding to develop ammonia-fuelled vessels.
5 June Norway's Stena mulls sale of LNG assets Norwegian shipping firm Stena Power is considering selling some or all of its LNG assets.
5 June Biofuels use in shipping has limitations: DNV Biofuels have the potential to contribute significantly to reducing carbon emissions in shipping because of their flexibility as a "drop-in fuel", but they are "unlikely to be the only solution to shipping's goal of transitioning to zero [greenhouse gas] GHG emissions in the future", according to marine certification society DNV.
5 June Singapore, Australia seek shipping corridor Singapore and Australia have opened discussions to establish a green shipping corridor by 2025.
5 June EU investigates allegations of biofuels fraud The European Commission today said it is investigating allegations of "possible fraud" related to biofuel imports from China into the EU, having received reports from a member state.
5 June Industry earmarks €18bn in biomethane investments: EBA Industry stakeholders have set aside a first tranche of €18bn ($19.2bn) in investments to scale up biomethane production in Europe, according to the first investment outlook by industry association EBA.
Conventional marine fuels
9 June US increases European diesel market share The US has been providing more than 10pc of Europe's diesel imports since the start of May, up from around 5pc last year and 7-8pc in the opening months of this year. Cargoes have probably been freed up by Russian sellers taking around half of the US' previous market share in Brazil.
9 June Asian HSFO flips into contango on lack of summer demand Singapore 180cst high-sulphur fuel oil (HSFO) markets have flipped into contango mainly as typical South Asian summer utility demand has failed to materialise, market participants said.
9 June Chinese prices signal higher gasoline, diesel exports Chinese spot diesel prices have fallen to their lowest since last year's lockdown even as international prices rally — increasing the likelihood of higher exports.
9 June Slow demand weighs on Japan's April bonded bunker sales Japan's bonded marine fuel sales fell in April, pressured by weaker delivery demand from domestic shipowners and the spot market.
9 June Japan's Tokyo VLSFO supplies tighten on lower stocks Very low-sulphur fuel oil (VLSFO) deliveries in Japan's Tokyo bay area tightened, pressured by lower stocks because of refinery turnarounds.
8 June Low Turkish, Greek diesel exports tighten Europe supply Turkish and Greek diesel cargo offers have dwindled over recent weeks, according to market participants, further stoking diesel supply tightness in the Mediterranean market.
8 June Oman's Duqm refinery offers fuel oil, naphtha Oman's 230,000 b/d Duqm refinery has offered fuel oil and a naphtha cargo as it starts up, although residual fuel offers should taper off as downstream units come on line, said market participants.
8 June UAE, Saudi May fuel oil imports from Russia fall 35pc The UAE's and Saudi Arabia's imports of Russia-origin fuel oil fell by nearly 35pc in May from April, reflecting spring maintenance at Russian refineries.
7 June Brazil diesel imports fall further in May Brazil diesel imports fell for the second consecutive month in May amid a growing preference for domestic output after state-controlled Petrobras reduced its wholesale prices on 16 May.
7 June China raises oil product exports in May on huge quotas China's oil product exports jumped to 4.89mn t in May, sharply up on the month and year on year and higher than market expectations, after huge quotas were issued in the month.
7 June Peninsula to supply bunker fuels in Egypt Marine fuel supplier Peninsula Petroleum has been awarded a bunker supply licence for Mediterranean ports by the Egyptian government.
7 June World Bank lifts Russia outlook The World Bank has significantly upgraded its outlook for the Russian economy this year, largely because of continuing energy exports.
5 June Lake Charles refinery shut 1-2 months Calcasieu Refining's 135,000 b/d Lake Charles, Louisiana, refinery may be closed for up to two months after a 3 June lightning strike caused a naphtha tank fire.
5 June Afipsky refinery resumes normal operations Independent refiner Forteinvest is resuming normal operations at its 120,000 b/d Afipsky plant ...
5 June NWE diesel price spreads point to tighter supply Northwest European diesel premiums to crude, jet fuel and intermediate feedstocks all hit their highest in more than a month last week, as did the backwardation structure in the forward curve, affirming indications from traders that supply is substantially tightening.
Related news posts
Low US natgas prices help ammonia economics
Low US natgas prices help ammonia economics
Houston, 8 May (Argus) — Nitrogen fertilizer production costs in the US are primed to hit historically low levels through the third quarter, potentially creating favorable margin and arbitrage opportunities during the offseason as bloated natural gas inventories depress key feedstock prices. Estimated ammonia production costs for most US producers tied to Henry Hub natural gas prices have spent the last 12 consecutive weeks below $100/short ton (st) on sub-$2/mmBtu feedstock prices. They should benefit from sub-$3/mmBtu natural gas costs through October, based on the 7 May Nymex futures curve. A mild winter stemmed seasonal withdrawals from natural gas storage and mitigated heating demand. US natural gas inventories exited the 2023-24 winter at the highest seasonal levels in eight years. High inventories help contain US gas prices by easing concerns about spikes in demand or supply shortfalls. Slackened natural gas demand has continued through April and has maintained downward price pressure, even as producers curtail output. The US Energy Information Administration (EIA) said that it expects inventory growth to lag average levels in the coming months as producers cut output in response to lower prices. But inventories were still expected to exit the injection season, when gas stockpiles are replenished to meet winter heating needs, at an all-time high above 4.1 Tcf, the EIA said. Natural gas is the primary feedstock for US ammonia producers, comprising on average 60-70pc of total production costs at current prices. Ammonia production costs have not spent this long below $100/st since May-July 2020, according to Argus data. Ammonia is a key feedstock for urea and UAN manufacturing. Sinking feedstock ammonia costs lowers the cost floor for upgraded nitrogen alternatives and fosters favorable margin opportunities. US producer CF Industries said during its first quarter results the energy curves between North America and Europe — with the latter a higher-cost ammonia production hub — remain wider than historical levels, creating potential arbitrage scenarios. Ammonia production costs based on the Dutch TTF natural gas day-ahead contract, which serves as the European benchmark, have averaged more than three-times more than those tied to Henry Hub since January, according to Argus data. "Longer term, we expect the global energy cost structure to continue to provide significant margin opportunities for our North American production network," CF chief executive Tony Will said during the company's earnings call. By Connor Hyde Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.
Baltic April gas consumption rises on year
Baltic April gas consumption rises on year
London, 8 May (Argus) — Gas demand in the three Baltic states and Finland was up by 26pc on the year in April, although there were diverging trends in the different markets. Consumption in Finland, Estonia, Latvia and Lithuania totalled 3.56TWh, up from 2.82TWh a year earlier but down from 4.31TWh in March ( see data and download, graph ). That said, total demand was still well below the 2018-21 average for the month of 5.03TWh. Consumption was up on the year in all three Baltic countries, but Finnish demand edged down. This was the first month in which Finnish demand was lower on the year since April 2023. In contrast, Lithuanian consumption surged by nearly 50pc on the year, and was also higher than in February and March despite the end of the traditional heating season. Gas-fired power generation held broadly stable from a year earlier, totalling 305MW across the four countries compared with 301MW in April last year ( see gas-fired output table ). Output edged down in Estonia and Lithuania and dropped by 25MW in Finland, but this was offset by a 31MW increase on the year in Latvia. But, unlike in March, gas-fired output fell by 246MW, a large contributing factor to the lower gas demand on the month. Many combined heat and power plants will have switched off at around the end of March or mid-April as the traditional heating season came to a close, possibly driving the fall in gas-fired output. But renewables generation was also stronger in April than March, particularly in Finland, where wind output rose to 2.03GW from 1.63GW, while hydro also stepped up. In Lithuania, solar and waste-based production increased on the month. Demand was also stronger despite higher year-on-year minimum temperatures in all four capital cities, which may have curbed most residual heating demand after the end of the traditional heating season, although there was a brief cold snap towards the middle of the month that temporarily drove up demand ( see temperatures table ). With gas-fired power generation only marginally higher than a year earlier, and the warmer weather curbing residential demand, a possible uptick in industrial demand may have driven the aggregate rise in consumption. Average prices on the regional GET Baltic exchange were €33.30/MWh in April, up by 8pc on the month but 30pc lower than a year earlier, the exchange said. Prices increased in around the middle of April "due to the unexpectedly cold weather and the increased demand for gas in the market", but then fell again "as the weather warmed", GET Baltic chief executive Giedre Kurme said. There were a total of 2,400 transactions last month for a combined 642GWh of gas. Volumes sold on the Finnish market accounted for 42pc, the joint Latvian-Estonian market 33pc, and the remaining 25pc was sold in Lithuania. Klaipeda and Balticconnector to change flows The return of the Finnish-Estonian Balticconnector pipeline and the start of maintenance at the Klaipeda LNG terminal in Lithuania will drive changed flow patterns this month. The Balticconector resumed commercial operations on 22 April after being off line since 8 October following a rupture caused by a dragging ship anchor . The reconnection of Finland to its southern neighbours has allowed for strong southward flows since 22 April, at an average of 62 GWh/d on 22 April-7 May. Some of this gas is probably being injected into storage, with the region's only facility at Incukalns switching to net injections on 23 April from net withdrawals of 7 GWh/d earlier in the month. Net injections have since averaged 46 GWh/d on 23 April-6 May, the latest data from EU transparency body GIE show. Stocks at Incukalns ended the withdrawal season on 30 April at 11.29TWh, the highest since at least 2014 and well above the previous high from last year of 9.03TWh. Large volumes of gas that had been stored over the previous summer for export to Finland over the winter were left stranded in Incukalns after the Balticconnector went off line. And the Klaipeda LNG terminal began maintenance on 1 May, which will last until 15 June, as the terminal's Independence floating storage and regasification unit (FSRU) departed for dry-docking in Denmark. As a result, there were net exports from Poland to Lithuania for the first time since early November, at an average of 17 GWh/d on 1-7 May. Some of this gas could have been withdrawn from Ukrainian storage, with flows from Ukraine to Poland averaging 10 GWh/d over the same period. Lithuania's largest supplier Ignitis has said it stored some volumes in Ukraine. And flows at the Kiemenai border point with Latvia have also flipped towards Lithuania, averaging 11 GWh/d on 1-7 May, compared with net flows towards Latvia of 15 GWh/d in April. That said, there were no flows at the point on 6-26 April. By Brendan A'Hearn Finnish, Baltic average gas-fired power generation MW Apr-24 Apr-23 Mar-24 ± Apr 23 ± Mar 24 Estonia 5 6 7 -1 -2 Latvia 49 18 215 31 -166 Lithuania 46 47 52 -1 -6 Finland 205 230 277 -25 -72 Total 305 301 551 4 -246 — Entso-E Daily average minimum temperature in FinBalt capitals °C Apr-24 Apr-23 Mar-24 ± yr/yr ± m/m 2014-23 Apr avg Vilnius 5.22 3.83 0.93 1.39 4.29 2.63 Riga 5.01 4.98 1.93 0.03 3.08 3.65 Tallinn 2.00 1.46 -0.59 0.54 2.59 1.17 Helsinki 0.11 -0.45 -2.55 0.56 2.66 0.12 — Speedwell Finnish and Baltic April consumption by country GWh Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.
Japanese ethylene producers unite for decarbonization
Japanese ethylene producers unite for decarbonization
Tokyo, 8 May (Argus) — Japanese petrochemical producers Mitsui Chemicals, Mitsubishi Chemical and Asahi Kasei have agreed to co-operate on decarbonization of their ethylene crackers in west Japan, targeting to decide a pathway within the current April 2024-March 2025 fiscal year. They plan to accelerate carbon neutrality at Mitsubishi Chemical and Asahi Kasei's 496,000 t/yr Mizushima cracker in Okayama prefecture and Mitsui Chemicals' 455,000 t/yr Osaka cracker in Osaka prefecture. The partners aim to introduce biomass feedstocks such as biomass-based naphtha and bioethanol and low-carbon cracking fuels like ammonia, hydrogen and electricity. They said joining forces will enable them to accelerate reducing greenhouse gas emissions, although they have not yet decided any further details. Mitsui Chemicals has experience in using bio-naphtha and recycled pyrolysis oil at its Osaka cracker. Japanese petrochemical producers have increasingly united to achieve decarbonization of their production processes, which account for around 10pc of the Japanese industrial sector's carbon dioxide emissions, according to the trade and industry ministry. Mitsui Chemicals, Sumitomo Chemical and Maruzen Petrochemical agreed to study the feasibility of chemical recycling and using bio-feedstocks at the Keiyo industrial complex in Chiba. By Nanami Oki Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.
New Zealand’s Genesis Energy to resume coal imports
New Zealand’s Genesis Energy to resume coal imports
Sydney, 8 May (Argus) — New Zealand's upstream firm and utility Genesis Energy plans to resume thermal coal imports later this year to feed its dual gas- and coal-fired Huntly power plant. The resumption was because of lower domestic gas production and rapidly declining coal stockpiles, and will mark the firm's first coal imports since 2022. Coal inventories at the 953MW Huntly plant, — New Zealand's largest power station by capacity and the country's only coal-fired facility — recently slipped below 500,000t, down from 624,000t at the end of March, and will fall below 350,000t by the end of the winter. This will trigger a need to purchase more coal to maintain a target operational stockpile of around 350,000t ahead of winters in 2025 and 2026, the company said on 8 May. Imports are currently the most efficient option for the quantity the company will need, with a delivery time of around three months, chief executive Malcolm Johns said. Genesis typically imports from Indonesia, the company told Argus . Gas production in New Zealand has dropped at a faster rate than expected, with major field production in April down by 33pc on the year, Genesis said. Lower gas availability typically leads to more coal burn, because the Huntly plant runs on gas and coal. This is in addition to an extended period of low hydropower inflows in recent months, which required higher thermal generation to ensure supply security. A prolonged outage at Huntly's unit 5 gas turbine between June 2023 and January 2024 also led to an even greater need for coal-fired generation, Genesis said. Biomass transition The company — which is 51pc owned by the state — is the second-largest power retailer in New Zealand, behind domestic utility Mercury, according to data from the Electricity Authority. It has a NZ$1.1bn ($659mn) programme for renewable power generation and grid-scale battery storage , which includes a potential replacement of coal with biomass at Huntly. But the transition to biomass "will take some years," Johns said. Genesis has successfully completed a biomass burn trial at Huntly last year and has collaboration agreements with potential New Zealand pellet suppliers, but there is currently no local source for the type of pellets needed for the plant. Genesis is hoping to move to formal agreements "as soon as counterparties are able". The company will not consider importing pellets, it told Argus . "We will only use biomass if we can secure a local New Zealand supply chain that is sustainable and cost-effective," it said. Domestic gas production New Zealand's three-party coalition government said separately on 8 May that the "material decline" in local gas production threatens energy security, blaming the previous Labour party-led government for "policy decisions which have disincentivised investment in gas production." The decisions — which were part of the former government's pledge to achieve a carbon-neutral economy by 2050 — led to a reduction in exploration for new gas resources since 2021, while suppressed maintenance drilling reduced production from existing gas fields, according to a joint release from energy minister Simeon Brown and resources minister Shane Jones. "Due to this significant reduction in gas production, the government has also been advised that some large gas consumers are expressing concern about their ability to secure gas contracts," the government said. Major industrial users such as Canada-based methanol producer Methanex have been forced to reduce production as a result, it noted. "We are working with the sector to increase production, and I will be introducing changes to the Crown Minerals Act to parliament this year that will revitalise the sector and increase production," Jones added. By Juan Weik Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.
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