Baltic index falls as capesizes hit lowest in seven months
The Baltic Exchange’s dry bulk sea freight index declined on Wednesday, pressured by lower rates across the capesize vessel segment, recording its lowest level since June.
The overall index, which factors in rates for capesize, panamax and supramax vessels, lost 65 points, or 2.8 percent, to 2,229, its lowest since April 14.
Rates for the vessels have further eroded into the current week ahead of the holidays, shipbroker Intermodal said in a weekly note dated Tuesday.
The capesize index fell 208 points, or 7.8 percent, to its lowest since June 8 at 2,455.
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Oil product stocks set for biggest annual drop after small weekly rise
Oil product stockpiles at the Port of Fujairah on the UAE’s east coast are heading for the biggest calendar year drop on record after rising 6.3 percent in the week ended Dec. 20, according to data from the Fujairah Oil Industry Zone provided exclusively to S&P Global Platts.
Total inventories stood at 16.273 million barrels on Dec. 20, a three-week high led by a 24 percent surge in gasoline and other light distillates, according to the data released Dec. 22. That left the total down 30 percent for 2021, heading for the biggest decline since Platts began compiling the data in 2017. Last year, stockpiles rose 27 percent, the most on record, as the pandemic crippled demand.
Inventories have declined across the board so far this year as demand has rebounded, led by a 58 percent plunge in jet fuel, gasoil and other middle distillates after rising 35 percent in 2020. Light distillates are heading for a 29 percent decline this year and heavy distillates including fuel oil for power generation and marine bunkers are down 20.5 percent since the end of 2020.
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Asia fuel oil VLSFO cash bonuses rise due to sustained demand for freight
Asian cash bounties for 0.5 percent ultra-low sulfur fuel oil (VLSFO) rose on Wednesday, driven by sustained demand and tighter supplies.
Cash premiums for the 0.5 percent VLSFO in Asia climbed to $ 19.10 per tonne against Singapore quotes, from $ 16.15 per tonne on Tuesday.
First-month VLSFO crack fell 2 cents to $ 14.99 a barrel against Dubai crude during trading hours in Asia.
Meanwhile, the 380 cst HSFO barge crack for January traded at a discount of $ 11.09 per barrel to Brent on Wednesday, down from minus $ 10.97 per barrel on Tuesday.
Cash premiums for 380 cst high sulfur fuel oil (HSFO) fell to 1.29 cents per tonne against Singapore quotes, from $ 1.35 per tonne in the previous session.
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Major coal-producing countries push for sales to China
China has been ramping up the production and transportation of coal, along with oil and gas as well as renewables, to cope with the winter peak season for electricity. China State Railway Group Co transported 118 million tons of thermal coal from November 1 to 26, up 34.6 percent year-on-year.
Multiple coal-producing countries are pushing for sales to China, the world’s largest coal buyer that has just overcome a power shortage a couple of months ago. Coal exporters in Russia, Indonesia and Mongolia are all taking steps to enhance cooperation with China now.
On Monday, 12 Chinese coal import enterprises signed the initial batch of medium- and long-term thermal coal supply contracts for 2022 with 12 coal export enterprises from Russia, Indonesia and Mongolia during the 2021 China Import-coal Summit held in Beijing.
The first batch of contracts is valued at $2.49 billion. Coal exporters in the three countries will supply 25.82 million tons of thermal coal to China.
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US LNG output appears to be at full capacity as European prices keep surging
US LNG feedgas demand registered Dec. 21 at around 13 Bcf/d – a new record — as the six major US liquefaction facilities in operation appeared to be running at full capacity and a seventh was undergoing commissioning, S&P Global Platts Analytics data showed.
Ultra-high delivered prices in end-user markets were incentivizing robust US export activity.
The trends were expected to continue in the near-term, with cold weather across Northwest Europe boosting LNG demand there and even more frigid temperatures in Russia restraining pipeline gas volumes to the continent as Russia keeps more of its supply for domestic use.
Gas deliveries to US LNG export terminals rose about 140 MMcf/d from the previous day, based on nominations for the morning cycle as observed by Platts Analytics. About 58 percent of the total – 7.56 Bcf/d — was accounted for by the nine liquefaction trains across Cheniere Energy’s two terminals, Sabine Pass Liquefaction in Louisiana and Corpus Christi Liquefaction in Texas.
Small feedgas deliveries to Venture Global LNG’s Calcasieu Pass continued to register Dec. 21 as commissioning toward startup was ongoing, Platts Analytics data showed. According to Venture Global, all 18 liquefaction modules have been received at the Louisiana terminal from Italy and set on foundations.
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Global markets in 2021: recoveries, reflation and wrecking balls
For global financial markets, the second year of the COVID pandemic has been nearly as dramatic as the first.
The stocks bulls have stayed firmly in charge, surging energy and food prices have turbo-charged inflation, rattling the bond markets, while China has seen $1 trillion wipeouts in its heavyweight tech and property sectors.
On top of all that, Turkey exits 2021 in currency chaos, bitcoin and cryptokind have crushed it, small-time traders gave some hedge funds a drubbing and though green has gone mainstream, dirty old oil and gas have been the big winners, up more than 40 percent and 50 percent.
MSCI’s 50-country world index has piled on another $10 trillion, or 13 percent, thanks to COVID recovery signs and the torrent of central bank stimulus that has continued to flow.
There have been some stark differences though. Wall Street is up 23 percent but roughly 65 percent of the Nasdaq’s gains (3,780 stocks) are thanks to just five stocks – Microsoft, Google, Apple, Nvidia and Tesla, according to Bank of America number crunchers.