Suez blockage continues with extra rescue tugs en route
The container ship Ever Given, which run aground in the Suez Canal on 23 March, continues to be stranded there despite multiple attempts to re-float the vessel over the past days.
BSM, the ship's technical management company, said late on 27 March that re-floating attempts are continuing after "significant progress was made" the prior night, when the vessel's rudder was released from sediment at the stern of the ship. However, the ship remains in place and continues to block the critical waterway.
Two additional tugs, each with towing power (bollard pull) of 220-240t, have been dispatched are scheduled to arrive at the location of the incident later today to help with the re-floating attempts, according to BSM.
The Netherlands-flagged ALP Guard is currently in the Red Sea, about 80km from Egypt's Hurghada, according to vessel tracker FleetMon, while the Italy-flagged Carlo Magno is now around 60km off Egypt's Safaga port. Both are expected to arrive at the location before 18:00 local time.
These tugs will join eleven others that have been working alongside the ongoing dredging operations which continue to remove sand and mud from around the port side of the vessel's bow.
At the time of the incident on 23 March, the Ever Given was transiting northbound through the canal en route to Rotterdam, Netherlands. Initial investigations suggest the vessel grounded due to strong wind.
The Suez Canal is a vital artery between east and west, and the risk of disruption to shipping markets increases the longer that it remains blocked. As of now, there is still little clarity on how long that will be.
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US delays return of SPR crude until 2026
US delays return of SPR crude until 2026
Washington, 9 May (Argus) — President Joe Biden's administration has delayed by up to two years a requirement for oil companies and traders to return about 15.3mn bl of crude that have been loaned out from the US Strategic Petroleum Reserve (SPR). Oil companies and traders were initially scheduled to return up to 19mn bl of crude to the SPR from June-September and to return up to 8mn bl of additional crude over the following year. The US Department of Energy (DOE) loaned out most of that crude in 2022 because of supply shortages related to the war in Ukraine and a temporary shutdown of the Keystone pipeline. DOE had loaned the crude using a mechanism called an "exchange," under which companies agree to return the crude to the SPR at a later date, along with an in-kind payment in exchange for the loan. But over the last two months, DOE has modified at least nine contracts with ExxonMobil, Shell and other companies that had borrowed the crude, delaying the return of about 15.3mn bl of the borrowed crude to the SPR until 2026, according to contract modifications Argus Media obtained after filing a request under the Freedom of Information Act. DOE said it delayed the return of the exchange crude in support of a separate SPR program, where it has directly purchased more than 27mn bl of crude that will be added the SPR's Big Hill storage site in Texas. That purchase program will inject about 3mn bl/month to the SPR through the first nine months of this year, and DOE last week restarted efforts to buy more crude for the SPR for delivery starting in October. "These actions strategically moved back exchange returns to take advantage of stable crude oil market windows to directly purchase oil at a good price for taxpayers, while having consistently available capacity to drawdown in the event of an emergency," DOE said. The nine contract modifications were signed between 26 March and 16 April, at a time when Nymex WTI spot prices briefly surged past $80/bl, to the highest price in more than five months. Delaying the return of the exchanges will effectively free up crude that would otherwise have been injected into the SPR in June-September, during the peak of the summer driving season. Nearly all of the revised contracts will delay the return of "all remaining exchange oil" until July-October 2026. Republicans have repeatedly attacked the administration's management of the SPR, which they argue is dangerously low after Biden ordered the emergency sale of 180mn bl of crude from the reserve in 2022 in response to the war in Ukraine. Republicans have pushed the administration to prioritize refilling the SPR, which is at about half of its design capacity with 367.2mn bl of crude, given the value the reserve could have in mitigating supply shortages. US energy secretary Jennifer Granholm, in congressional testimony in March, said the administration was carrying out a plan to refill the SPR to "essentially where we would have been" if the emergency sales had never happened. DOE has already been able to cancel 140mn bl of congressionally mandated SPR sales and lined up the purchases of more than 30mn bl of crude. DOE also has said it "accelerated" the return of 4mn bl of crude exchanges. By Chris Knight SPR crude injections from exchanges mn bl Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.
Vertex to pause Mobile renewable fuels refining
Vertex to pause Mobile renewable fuels refining
Houston, 9 May (Argus) — US specialty refiner Vertex plans to pause renewable fuels production at its 88,000 b/d Mobile, Alabama, refinery by the end of the year, returning a converted hydrocracker to produce what it says are wider-margin fossil fuel products. Vertex completed the conversion of the Mobile refinery and produced its first barrels of renewable diesel (RD) in May last year , having bought the refinery from Shell in 2022 . The company plans to use a third quarter turnaround to convert its renewable hydrocracker back to petroleum fuels production and to be up and running by the end of the year, after facing significant macro headwinds for renewable fuels, the company said on an earnings call today. The decision to return to full fossil fuels production is ultimately a near-term financial decision for the company which has an outstanding $196mn term loan, management said on an earnings call Thursday. The time line for a return to petroleum product production is contingent on permitting approvals and a successful completion of the turnaround and catalyst change in the unit. Vertex plans to sell its renewable feedstock inventories prior to the conversion. Vertex said it will retain the flexibility to return to renewable fuels processing should market conditions improve for the fuels, but does not believe headwinds to renewable markets will abate in at least the next year and a half. Conventional crude and other feedstock throughputs at the Mobile refinery were 64,000 b/d in the first quarter, down from 71,000 b/d in the same three months of 2023. Renewable throughputs were 4,000 b/d in the most recent quarter. The company expects 68,000-72,000 b/d of conventional crude and other feedstock throughputs in the second quarter and 2,000-4,000 b/d of renewable throughputs. Vertex reported a first quarter loss of $18mn compared to profits of $54mn in the first quarter of 2023. By Nathan Risser Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.
Jakarta forum calls for exploring Ni price references
Jakarta forum calls for exploring Ni price references
Singapore, 9 May (Argus) — The global nickel market should explore different price references for nickel products to reduce price uncertainty, panellists said at the Third Nickel Producers, Processors and Buyers Conference in Jakarta, Indonesia. The London Metal Exchange (LME) nickel price, which is the global benchmark for class 1 nickel products, has been volatile for years now since LME suspended nickel trading in early March 2022, when prices surged above $100,000/t overnight. There were hopes late last year that prices would become more stable this year. But the price outlook has been uncertain since the turn of the year, with class 1 prices on the London Metal Exchange (LME) slumping to a four-year low of $15,877.50/t on 6 February on expectations of weak Chinese stainless steel and electric vehicle demand, before rebounding to a six-month high of $19,387.50/t on 26 April because of a delay in Indonesian RKAB mining right approvals and a reviewed forecast suggesting a significant smaller surplus for this year. There should be a new reference to counter price volatility, some conference participants said, while others suggested decoupling class 1 and 2 nickel prices. "[Prices are volatile now because] most prices are referenced to class 1, so maybe we can explore further with more price references, like class 2 nickel pig iron (NPI) and mixed hydroxide precipitate (MHP)," Ray Gunara, president-director of Indonesian coal producer Harum Energy, said on 7 May. Harum Energy this year bought a majority stake in an Indonesian nickel processing and refining business. Most conference participants agreed that a different price reference would help maintain nickel price stability. "[NPI prices now are] difficult to predict because the class 1 [prices] are no longer linked to the product we are selling," Indonesia miner Trimegah Bangun Persada (Harita Nickel)'s president-director Roy Arman Arfandy said. Indonesia is the world's largest nickel producer. The correlation between the monthly average of the LME class 1 cash official price and Argus ' NPI ex-works China index has fallen to close to 0.41 between January and May, from 0.91 in 2023. The correlation between the LME class 1 cash official price and Argus ' class 2 nickel benchmark Indonesian Nickel Index (INI) for 10-14pc NPI fob Indonesia was 0.52 between January and May. Market participants at the conference also expressed hope for more government support. "Currently there is an imbalance between local and foreign investments, so we are hoping that the government can give more support to local players like us," one producer said. Another conference participant said that they would aim to build a precursor cathode active material plant if given more support. Argus ' class 2 nickel INI for 10-14pc NPI fob Indonesia stood at $118.70/mtu on 3 May. The INI for 37pc MHP was at $142.80/mtu fob Indonesia and 70pc matte was at $148.90/mtu fob Indonesia on the same day. By Sheih Li Wong Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.
Singapore's GCMD to test long-term biofuel shipping use
Singapore's GCMD to test long-term biofuel shipping use
Singapore, 9 May (Argus) — Singapore-based Global Centre for Maritime Decarbonisation (GCMD) and Japanese shipping firm NYK Line will trial the continuous use of a biofuel blend over six months. The study aims to evaluate the effects of the continuous use of B24 biofuel blend of 24pc fatty acid methyl ester (Fame) and 76pc of very low sulphur fuel oil (VLSFO) on a short-sea vehicle carrier that will call at multiple ports, allowing for the regular sampling and testing of fuels stored on the ship. Fame is a "promising" fuel alternative, the firms said, but added that there are concerns about the impact of its extended use on vessel operations. The study hence aims to study the long-term impact of biofuel usage on ship engine performance and fuel delivery system operations. It will also examine the total cost of ownership of using biofuel, including fuel costs and associated maintenance costs, as well as identify potential operating challenges and suggest mitigation strategies. B24 is the current blend of alternative marine fuel that is being used or trialled for bunkering at some key Asian ports like Singapore and Zhoushan. Its usage is expected to rise, especially because the industry is pushing for higher emission cuts from shipping. Participants in the shipping industry are exploring solutions to meet the International Maritime Organization's (IMO) net zero carbon emission target by 2050, with operational safety and costs surfacing as some of the key concerns of alternative fuel adoption . "This knowledge will empower stakeholders across the ecosystem, from shipowners and charterers to biofuels producers and regulators – to make more informed business and policy decisions," GCMD chief executive officer Lynn Loo said. "Ultimately, this pilot will lead to greater confidence for biofuels use at scale, accelerating progress towards decarbonising the maritime industry." Argus assessed B24 biofuel bunker prices at $744.25-759.25/t delivered on board (dob) Singapore on 8 May. By Cassia Teo Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.
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