Argus Dry Freight

formerly Argus Freight

Issue 23-135 | Wednesday 12 July 2023

Highlights Key dry bulk freight rates

TCE
„„ Chinese iron ore demand supports Pacific rates Route
Size
Commodity
Rate
+/-
non-
'000t $/t scrubber
„„ Atlantic Capesize rates jump $/day
„„ Pacific Panamax rates down
Capesize
WC Australia-N China 170 Iron ore 8.15 +0.15 13,767
Tubarao-Qingdao 170 Iron ore 20.85 +1.60 15,468
Headlines Newcastle-Zhoushan 130 Coal 12.80 +0.20 15,532
Richards Bay-Krishnapatnam 150 Coal 11.90 +0.25 7,397
Panamax
„„ West Australian iron ore loadings ease
Murmansk-Rotterdam 75 Coal - - -
„„ Oil-bulk-ore ship sends ULSD to Singapore in rare move Richards Bay-Rotterdam 75 Coal 10.90 +0.20 -
„„ Malaysia’s TNBF finalises Jul-Aug coal freight tenders EC Australia-Japan 75 Coal 11.30 -0.05 -
Indonesia-S China 75 Coal 6.15 -0.05 -
Santos-Qingdao 60 Grain 35.40 +1.10 -
Kalama-Qingdao 65 Grain 19.90 -0.25 -
Commodity update
Weight of Freight - Iron shipments to Asia-Pacific
Daily wrap of dry commodity market news.

WC Australia-N China Capesize

Iron ore Tubarao-Qingdao Capesize
The price of seaborne iron ore cargoes rose in China as $/t %
Iron Ore 62pc FE price China
trading activity ticked higher and demand rose following the 140 20
government's increased financial support for the property
130
market. 15
Western Australian iron ore shipments fell to 2pc below 120 hhh
average in the week to 8 July as BHP and FMG decreased the 10
shipments. 110
5
100
Coal
Indonesia is aiming to launch the country's long-delayed coal 90 0
agency during July-September this year, with the energy Jan 23 Mar 23 May 23 Jul 23
ministry (ESDM) saying the harmonisation process for techni-
cal guidelines has been completed. Weight of Freight - Coal shipments to Asia-Pacific
The US Energy Information Administration (EIA) lowered
its US coal consumption and generation forecasts for this EC Australia-Japan Panamax
Indonesia-S China Panamax
year and 2024 as natural gas prices have been lower than $/t Newcastle coal del Asia-Pacific %
expected. 450 14
400 12
Grains 350
Limited port capacity available for grains across the Black 10
300 hhh
Sea today could increase prompt buying demand for French 8
product instead. 250
6
Meanwhile, the US Department of Agriculture raised ex- 200
pectations for Brazil's corn exports for the 2022-2023 harvest 150 4
by 1mn t to 56mn t. 100 2
Jan 23 Mar 23 May 23

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 Argus Dry Freight Issue 23-135 | Wednesday 12 July 2023

capesize

Capesize rates rise on China's support

Capesize rates in both the Pacific and Atlantic basins rose remained around $13,500/d on Wednesday, which is above
on Wednesday as the number of available cargoes to load at the standard breakeven level of $7,000/d.
end of July remained high and demand for iron ore in China Recently, Himalaya Shipping indicated that their three
increased on the back of promised government support on LNG dual fuel Newcastlemax vessels — which are trading
the real estate sector. on index-linked time charters — averaged approximately
Pacific rates edge higher $20,500/d in June, including scrubber benefits of around
The iron ore freight rate between west Australia and north $1,600/d while 2020 Bulkers reported that their six New-
China stepped up 15¢/t to $8.15/t on Wednesday. Chartering castlemax vessels averaged approximately $21,000/d over
activity remained strong and three main iron ore producers the same time period, including average scrubber benefits
made new cargoes available for end of July loading. around $2,500/d.
Iron producers Rio Tinto, BHP Billiton and Fortescue Atlantic rates jump
Metals Group (FMG) secured at least one vessel at $8.10/t to The rate between Tubarao and Qingdao jumped by $1.25/t
load at the end of July. And another company fixed a vessel to $20.85/t as iron ore producer Vale fixed two vessels load-
at $8.15/t, where the market had settled. ing from the end of July at this level.
Forward freight agreement (FFA) prices stepped higher The Capesize freight rate on the route from Saldanha Bay
and July contract prices rose by $800/d to $14,175/d, while to Qingdao decreased by 25¢/t to $14.55/t. Assore's Ore and
August prices increased by $675/t to $15,250/d, according to Metals awarded its tender for a cargo loading from 4-8 Au-
one broker. gust at $14t/t, with 1.25pc commission, equating to $14.55/t
There was a derailment on iron ore producer Roy Hill's for standard terms.
railway in Western Australia but the incident was not signifi- Vessel movements in Richards Bay port are still limited.
cant and will not impact on the market, market participants It was suspended from 6pm Sunday because of adverse
said. weather conditions, South African railway operator Trans-
Time charter rates have dipped since June and the rate net said. The last Panamax or Capesize sailed from port on
for a Capesize voyage from west Australia to north China Saturday, according to vessel tracker FleetMon.

Capesize rates
TCE non- TCE scrubber Scrubber
Route Size '000t Commodity Rate $/t +/-
scrubber $/day $/day differential $/day

Pacific
WC Australia-N China 170 Iron ore 8.15 +0.15 13,767 16,796 -3,029
Hay Point-Fangcheng 160 Coal 9.60 +0.15 15,307 18,328 -3,021
Hay Point-Zhoushan 160 Coal 9.60 +0.15 16,708 19,687 -2,979
Gladstone-Fangcheng 160 Coal 10.00 +0.15 15,275 18,294 -3,019
Gladstone-Zhoushan 160 Coal 10.00 +0.15 16,623 19,602 -2,979
Hay Point-Rotterdam (11 Jul) 160 Coal 10.75 +0.25 -1,448 2,103 -3,551
Newcastle-Fangcheng 130 Coal 12.80 +0.20 14,236 17,486 -3,250
Newcastle-Zhoushan 130 Coal 12.80 +0.20 15,532 18,751 -3,219
Indian Ocean
Saldanha Bay-Qingdao 170 Iron ore 14.55 -0.25 13,064 15,966 -2,902
Richards Bay-S China 150 Coal 13.30 -0.20 12,116 14,891 -2,775
Richards Bay-Krishnapatnam 150 Coal 11.90 +0.25 7,397 9,944 -2,547
Richards Bay-Kandla 150 Coal 10.75 +0.25 10,194 12,686 -2,492
Atlantic
Tubarao-Qingdao 170 Iron ore 20.85 +1.60 15,468 18,484 -3,016
Tubarao-Rotterdam 170 Iron ore 8.85 +0.05 -2,676 4 -2,680
Puerto Bolivar-Rotterdam 160 Coal 9.25 nc 9,356 11,406 -2,050
Richards Bay-Rotterdam 150 Coal 8.20 +0.05 -4,203 -1,588 -2,615
US east coast-ARA 120 Coal 11.35 +0.40 - - -
US east coast-east coast India 120 Coal 33.10 +0.90 - - -

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Issue Ref: 540039

Argus Dry Freight Issue 23-135 | Wednesday 12 July 2023

capesize Iron ore routes

Rotterdam Iron ore cfr Qingdao

62pc Fe (ICX) $/t 108 Qingdao
Tubarao-Rotterdam
65pc Fe $/t 122
Rate $/t 8.87
Weight of Freight
7.29% 17.5 days WC Aus -N China
(62pc Fe)
Rate $/t 8.17
Weight of Freight
7.56%
Saldanha Bay-Qingdao (62pc Fe)

Tubarao-Qingdao Rate $/t 14.72 12.4 days

Rate $/t 19.90 Tubarao Weight of Freight
13.63%
(62pc Fe)
Weight of Freight
16.34% Port Hedland
(65pc Fe) Saldanha Bay
28.75 days

39.5 days

Figures on map are rolling weekly averages

panamax

Pacific Panamax rates down Panamax rates $/t

Freight rates for Pacific Panamax dry bulk vessels ticked Size
Route Commodity Rate +/-
'000t
down on limited northeast Asian demand.
The cost to move a 75,000t Panamax shipment from east Pacific
EC Australia-Japan 75 Coal 11.30 -0.05
coast Australia to Japan fell by 5¢/t to $11.30/t, as vessel
EC Australia-S Korea 75 Coal 10.50 -0.05
supplies in the northeast Asia rose on a lack of fresh cargo
EC Australia-EC India 75 Coal 12.90 -0.05
enquiries.
EC Australia-S China 75 Coal 11.15 -0.10
The Indonesian coal market showed signs of increased Indonesia-Japan 75 Coal 7.50 -0.05
activity and steady volumes, a shipbroker said, but this was Indonesia-S Korea 75 Coal 6.35 -0.05
unable to lift market rates, as the market was “two-tiered”. Indonesia-EC India 75 Coal 9.35 -0.05
Offer levels from shipowners in the northeast Asia region Indonesia-S China 75 Coal 6.15 -0.05
remained high for Australian voyages, but vessels were will- WC North America-Japan 75 Coal 11.10 -0.10
ing to discount for shorter voyages, the shipbroker said. This WC North America-ARA 75 Coal 18.30 -0.05

was likely because an Indonesian voyage would reposition a Kalama-Qingdao 65 Grain 19.90 -0.25
Vancouver-Qingdao 65 Grain 15.95 -0.20
vessel closer towards the east coast South American loading
Atlantic/Black Sea
port in a shorter period of time and allow shipowners to
Murmansk-Rotterdam 75 Coal - -
capitalize on that route more quickly.
Richards Bay-Rotterdam 75 Coal 10.90 +0.20
But freight rates would likely be erratic in the short- Puerto Bolivar-Rotterdam 75 Coal 11.00 +0.20
term, as “any uptick right now is just within the technical US east coast-ARA 75 Coal 10.65 +0.55
range”, a participant said. “At least one week of consecutive US east coast-Japan 75 Coal 33.15 +0.70
increases are needed before saying the worst is over”. US east coast-east coast India 75 Coal 28.05 +0.55
North Pacific rates tick lower US Gulf coast-ARA 75 Coal 12.45 +0.70
Asia-Pacific demand for west coast North America loading Santos-Qingdao 60 Grain 35.40 +1.10

Panamax cargoes remained muted today as the oversupply Odessa-Qingdao 65 Grain - -

Novorossiysk-Qingdao 65 Grain - -
in the region continued to weigh on rates.
Odessa-Alexandria 65 Grain - -
A charterer fixed a Kamsarmax bulker for a north Pacific
Novorossiysk-Alexandria 65 Grain - -
voyage at $6,500/d, one of the lowest fixtures heard in
Houston-Rotterdam 65 Grain 14.35 +0.75
weeks. Houston-Qingdao 65 Grain 40.30 +1.15

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Argus Dry Freight Issue 23-135 | Wednesday 12 July 2023

capesize/panamax Coal routes

cif ARA month 1

Murmansk-Rotterdam Murmansk
EC Australia-Japan 75kt
Rate $/t 100.50
75kt
5.75 days Rate $/t 11.35
Rate $/t - Weight of Freight
Weight of Freight Indonesia-S China 75kt (fob Newcastle 7.74%
- Rotterdam
(cif ARA month 1) Rate $/t 6.18 6,000kcal)
Weight of Freight
10.49%
(ICI4 month 1) Oita
15.2 days

Fangcheng
Richards Bay- Krishnapatnam
Krishnapatnam 150kt ~6 days
Puerto Bolivar
Rate $/t 11.73 ~15 days
Weight of Freight
10.69% East Kalimantan
(fob RBCT month 1) ports
Puerto Bolivar-
Rotterdam 160kt 14.4 days
Richards Bay East Australia
Rate $/t 9.25 ports
Weight of Freight
9.2% Fob Richards Bay ICI4 fob Indonesia
(cif ARA month 1)
month 1 month 1
Rate $/t 98 Rate $/t 53

Figures on map are rolling weekly averages

The busier physical market in east coast South America Petroleum coke freight rates $/t
today and yesterday could serve to pull vessels from the Size 4-week
Route Rate +/-
'000t average
region in the coming days.
Rates for coal voyages from west coast North America to US Gulf-ARA 50 16.70 +1.20 15.33
Venezuela-ARA 50 15.45 +0.95 14.39
Rotterdam and Japan dropped by 5¢/t and 10¢/t to $18.30/t
US Gulf-Turkey 50 19.80 +1.60 18.04
and $11.10/t, respectively. Rates for grain voyages from Ka-
USWC-Japan 70 17.85 -0.55 19.32
lama and Vancouver to Qingdao dropped by 25¢/t and 20¢/t
USWC-China 50 24.75 -0.70 25.18
to $19.90/t and $15.95/t, respectively. Rates for petroleum US Gulf-Brazil 50 17.00 +0.90 16.15
coke voyages from the US west coast to Japan dropped by US Gulf-China 50 40.75 +2.75 38.22
55¢/t to $17.85/t. US Gulf-east coast India 50 37.40 +2.70 36.00
EC Saudi Arabia-west coast India 50 11.35 nc 11.46
EC Saudi Arabia-China 50 16.10 nc 16.30

CCF (Carbon cost of freight) indexes

Americas petroleum coke freight $/t Lump sum $ $/t
Size One- Round- One- Round-
Route Commodity
'000t way trip way trip
USGC-EC India 50kt
USGC-Turkey 50kt Hay Point-
160 Coal 323,039 599,869 2.02 3.75
USWC-Japan 70kt Rotterdam
60
Hampton
Roads-Rotter- 120 Coal 93,296 171,953 0.78 1.43
50 dam
Houston-
40 75 Coal 67,148 128,300 0.90 1.71
hhh Rotterdam

30 Tubarao-
170 Iron ore 125,731 236,462 0.74 1.39
Rotterdam

20 Houston-
65 Grain 66,355 127,507 1.02 1.96
Rotterdam
10
Port Arthur- Petroleum
Apr 23 May 23 Jun 23 Jul 23 50 85,998 165,627 1.72 3.31
Rotterdam coke

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Argus Dry Freight Issue 23-135 | Wednesday 12 July 2023

Atlantic Panamax rates surge Panama Canal delays days

The ongoing clearing of Panamax tonnage on heightened Northbound Southbound

European and Asia-Pacific demand beginning yesterday put
Panamax locks 6 11
strong upward pressure on rates in the north Atlantic market
Neopanamax locks 10 12
today.
Tightening vessel supply around Europe could continue to
pressure rates higher in the coming days. Russia origin coal freight rates $/t
Transatlantic rates jump Loading Port Destination Port Size '000t Rate +/-

Stronger European demand for mineral cargoes helped to Market rates

boost rates for Europe-bound voyages today, with some rates Ust-Luga west coast India 75 28.00 -1.50
pushing upwards by over 5pc on the day. Ust-Luga China 75 36.00 -2.50
A charterer fixed a high-spec Kamsarmax bulker for a Ust-Luga Iskenderun 75 15.00 -0.50
Quebec-Turkey mineral voyage from 13 July at $11,000/d, Taman China 160 22.00 -0.50
well above market levels and likely further boosting senti- Taman west coast India 75 21.00 -0.50
ment among shipowners following the high-paying fixtures Taman Iskenderun 75 10.50 -0.50
heard in yesterday's market.
Murmansk China 75 37.50 -1.50
Rates for coal voyages from the US east coast and Gulf
Vostochny south Korea 75 5.50 -0.50
coast to Rotterdam rose by 55¢/t and 70¢/t to $10.65/t and
Vostochny north China 75 7.50 nc
$12.45/t, respectively. Rates for grain voyages from Houston
to Rotterdam rose by 75¢/t to $14.35/t.
Front-haul rates push higher
Asia-Pacific demand for grain cargoes continued to boost Panama Canal delays for Neopanamax locks days
front-haul rates today in the north and south Atlantic basin.
The busier east coast South American market could serve Northbound waiting days Southbound waiting days
to alleviate oversupply in the north as fewer ballasters from 25
the south will compete for north coast South American car-
goes, pulling more north Atlantic tonnage for the voyages. 20
Rates for coal voyages from the US east coast to Japan
and east coast India rose by 70¢/t and 55¢/t to $33.15/t and 15
$28.05/t, respectively. Rates for grain voyages from Houston hhh
to Qingdao rose by 75¢/t to $14.35/t. 10

0
15 Jul 22 9 Nov 22 13 Mar 23 12 Jul 23

Panama Canal delays for Panamax locks days

Northbound waiting days Southbound waiting days

12

10

8
Workspaces:
6 hhh
Coal + Freight - Global
4
Petcoke + Freight - Global
2
• These Workspaces are templates, curated by the Freight
editorial team
• To find out more about Workspaces, visit this link 0
15 Jul 22 9 Nov 22 13 Mar 23 12 Jul 23

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Argus Dry Freight Issue 23-135 | Wednesday 12 July 2023

Bunkers

Conventional
Rotterdam bunker prices (0.5%S, 3.5%S, MGO) $/t Singapore bunker prices (0.5%S, 3.5%S, MGO) $/t

0.1%S MGO dob 0.1%S MGO dob

0.5%S fuel oil 380cst dob 0.5%S fuel oil 380cst dob
3.5%S fuel oil 380cst dob 3.5%S fuel oil 380cst dob
800 800

700 700

---- ----
600 600

500 500

400 400
13 Apr 23 12 May 23 9 Jun 23 6 Jul 23 13 Apr 23 11 May 23 8 Jun 23 6 Jul 23

Alternative
Rotterdam - LNG, others as premiums to VLSFO $/t USGC - Methanol, ammonia as premiums to VLSFO $/t

VLSFO 0.5pc ARA including CO2 cost Methanol barge dob Ammonia cfr US Gulf spot
LNG NWE bunker dob 400
RED biomethanol ARA
2500
300
2000
200
1500
hhh hhh
1000 100
500
0
0

-500 -100
Apr 23 May 23 Jun 23 Jul 23 Apr 23 May 23 Jun 23 Jul 23

Singapore - Methanol premium to VLSFO $/t Middle East - Ammonia premium to VLSFO $/t

Methanol southeast Asia dob Ammonia Middle East fob spot

250 75

50
200

25
150
hhh 0 hhh
100
-25

50 -50

0 -75
Apr 23 May 23 Jun 23 Apr 23 May 23 Jun 23 Jul 23

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Argus Dry Freight Issue 23-135 | Wednesday 12 July 2023

News

West Australian iron ore loadings ease The second freight tender from TNBF comprised three
Western Australian (WA) iron ore shipments fell to 2pc below shipments from Indonesia, two Panamax shipments and one
average in the week to 8 July, as BHP and Fortescue took a Capesize shipment. The tender took place at 10.30-11.30am
breather after the end of their financial years on 30 June. Malaysia time.
But Rio Tinto and Roy Hill continued with above-average A reverse e-auction system is used where shipowners,
shipments. operators and/or trading firms make their offers on TNBF's
The four big Pilbara iron ore producers — Rio Tinto, BHP, online platform.
Fortescue and Roy Hill — loaded vessels with a combined The cargo sizes for these shipments have a 10pc toler-
17.14mn dead weight tonne (dwt) of capacity, down from ance more or less at the shipowner's option.
20.39mn dwt in the week to 1 July, according to initial Freight rates for TNBF's tenders are typically lower as
shipping data collated by Argus. The dwt is the maximum Malaysia is considered a favourable redelivery position.
capacity of a vessel and overestimates actual shipments by By Pranav Vadehra
around 5pc.
After more than two months of mostly above-average Oil-bulk-ore ship sends ULSD to Singapore
shipments, BHP and Fortescue took stock at the beginning Trading firm Trafigura booked the Balzani oil-bulk-ore (OBO)
of their new financial years, slipping from more than 20pc cargo vessel to ship ultra-low sulphur diesel (ULSD) from
above average in the week to 1 July to 18pc below average India’s Sikka to Singapore in a rare move, according to tanker
for BHP and 6pc below average for Fortescue in the week to participants.
8 July. This was offset by Rio Tinto shipping 10pc more than OBO vessels are rarely booked for a route in this part of
its one-year weekly rolling average and Roy Hill 24pc ahead the world, as shipowners typically prefer to position their
of its average. Rio Tinto operates on a calendar financial vessels towards east coast South America for grain load-
year and Roy Hill is not listed, so has fewer reporting obliga- ings. But this rare move came as earnings on the oil tanker
tions. market proved more attractive than those for dry bulk.
Roy Hill shipments were in line with the prior week at Global shipping firm Klaveness Combination Carriers' (KCC)
1.57mn dwt but are likely to fall in the next fortnight as the has 16 combination carriers, including the 2021-built, 82,393
firm undertakes its quarterly scheduled maintenance in mid- deadweight tonne (dwt) Balzani.
July. Rio Tinto loaded vessels with 7.29mn dwt capacity in Trafigura booked the Balzani at Worldscale (WS) 102.5
the week to 8 July, up from 7.18mn dwt in the previous week on 6 July for its 60,000t shipment from Sikka, west coast
and above its rolling average of 6.63mn dwt. India to Singapore, loading from 13 July. The fixture would
BHP loaded ships with 4.75mn dwt, down from a re- be equivalent to about WS112 for a 55,000t shipment from
cord 7.14mn dwt capacity in the week to 1 July. Fortescue the Mideast Gulf to Singapore. The fixture was concluded
shipped 3.52mn dwt, down from 4.5mn dwt. at a discount to prevailing market levels as its last cargo
China was listed as the destination for 78pc of ship- was grains, a dry cargo, market participants said, with the
ments, down from 82pc in the previous week, as well as the Marshall Islands-flagged Balzani's last laden voyage from east
average of 82pc. coast South America to Dalian, China.
The Argus ICX iron ore index was last assessed at $107/ But the discounted rates were likely workable, tanker
dry metric tonne (dmt) cfr Qingdao on a 62pc Fe basis on 11 participants said, as time charter equivalent (TCE) rates
July, down from $115.70/dmt on 19 June and from a recent would still be higher than those for dry bulk shipments.
high of $133.40/dmt on 15 March. Argus estimated TCE rates for a standard Long Range 1 (LR1)
By Jo Clarke vessel from the Mideast Gulf to Singapore at WS112 on 6 July
would be about $12,404/d. The time charter market for a
TNBF finalises Jul-Aug coal freight tenders dry bulk Kamsarmax vessel would be about $10,000/d for an
Malaysian coal procurement firm TNB Fuel Services (TNBF) approximately 90-day east coast South America grain route,
finalised two freight tenders today to move about 630,000t or about $6,700/d for an approximately 25-day Indonesian
of coal for late July-early August loading. coal route on 6 July, according to dry bulk participants.
The first freight tender from TNBF, a subsidiary of Some commercial strategie could be in play as well,
Malaysian state-owned utility TNB, comprised six Panamax tanker participants added, in comparison the tanker ship-
shipments from Indonesia. The tender took place at 9.30- ment would take about a week to head from the west coast
10.30am Malaysia time (01:30-02:30 GMT). But two ship- India loading port to Singapore, making it a much shorter
ments were withdrawn during the auction. voyage, and could allow the shipowner to “bide for time”

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Argus Dry Freight Issue 23-135 | Wednesday 12 July 2023

News

and figure out next steps. erably 30pc, by 2030; by at least 70pc, and preferably 80pc,
OBO vessels are uncommon in the freight market as they by 2040; and to net zero by 2050 from 2008 base levels.
are expensive to build. But OBO vessels allow the shipowner By Stefka Wechsler
to reduce the number of empty or ballast voyages, as the
vessels can switch to a different type of cargo depending on USDA ups Brazil's 22-23 corn, soy estimates
the demand and supply of the respective market to maxi- The US Department of Agriculture's (USDA) export estimates
mise profits. for Brazil's 2022-23 soybean and corn crops increased this
By Sean Zhuang and Andrew Khaw month, while forecasts for the 2023-24 crops remained virtu-
ally unaltered.
John Stone offers renewable diesel in USGC Brazil's 2022-23 soybean crop is set to export 94mn met-
Marine fuel supplier John W Stone Oil Distributor has begun ric tonnes (t). That is a rise from June's 93mn t estimate.
offering renewable diesel for vessels in the US Gulf coast. USDA expects Brazil to reach 156mn t in its 2022-23 soy-
The fuel will be supplied to international and domestic bean crop, the same as in last month's report. Estimates for
vessels as well as consumed by all of Stone Oil’s own vessels. imports remain at 250,000t.
The company has been using the renewable diesel in several The projection for domestic demand fell by 500,000t
of its vessels, with a plan to convert the entire fleet within from June to 56.8mnt. The estimate for beginning stocks
the next two months. Stone Oil’s vessel fleet comprises remains unaltered at 27.6mn t, while projections for end-
47 inland barges, 11 inland boats and three offshore units, ing stocks decreased to 33.1mn t from 33.6mn t in the prior
which burn about 56,000 bl/year of marine fuel. month.
The company has committed a 100,000 bl tank in Port The department expects Brazil's 2022-23 corn crop to
Fourchon, Louisiana, and 85,000 bl of tankage in Gretna, export 56mn, a 1mn t increase on the month. Estimates for
a suburb of New Orleans, Louisiana, for the initial storage production also rose by 1mn t, from 132mn t in June.
and the distribution of the renewable diesel. The fuel can Beginning and ending stocks are forecast at nearly 4mn
be delivered to vessels via barge or via ex-pipe. Stone Oil t and 8mn t, respectively. Estimates for imports remained
has a renewable diesel supply contract with a US Gulf coast at 1mn t and domestic demand is projected at 74mn t, the
refinery and has actively engaged additional suppliers. Stone same as June estimates.
Oil would not disclose the name of the US Gulf coast refinery Stable 2023-24 soybean outlook
due to an non-disclosure agreement. USDA's outlook for Brazil's 2023-24 soybean crop production
The company is receiving enquiries for blended renew- remained unchanged in July at 163mn t.
able diesel bunker lots. Although typical conventional The forecast for exports and imports stood at 96.5mn t
marine fuel lots range between several hundred to 1,000 and 450,000t, respectively. Domestic demand is projected to
metric tonnes, the expectation of the lots for renewable reach 59.7mn t.
diesel as a blend stock are expected to be smaller. Inter- Next season's beginning stocks are forecast at 33.6mn,
national vessel owners' inquiries have been for renewable the same estimate as in June, while projections for ending
diesel blended with fuel oil or gasoil, while domestic US stocks fell by 500,000t in July to 40.8mn t.
vessel owners are interested in pure renewable diesel. Stone Forecasts for 2023-34 corn unmoved
Oil has seen interest from cruise lines, container ships, bulk USDA expects Brazil's 2023-24 corn crop to total 129mn t,
carriers and tankers. the same projected in June.
The renewable diesel meets ISO 8217/ ASTM D975 Estimates for exports and imports also remained un-
specifications and has International sustainability & carbon changed at 55mn t and 1.2mn t, respectively. Domestic
certification (ISCC) renewable diesel certification. It can demand is set to reach 76.5mn t.
reduce lifecycle greenhouse gas (GHG) emissions by up to Brazil's 2023-24 corn season is pegged to begin with
75pc compared with conventional fuels, the company said. 7.97mn t stocks, while ending stocks may total 6.7mn t.
“Initially the [renewable diesel] driver will be internal man- By Maria Albuquerque
dates rather than regulations, but the regulations will have
a growing impact”, Anthony Odak, chief operation officer of USDA corn forecasts set to weigh on market
Stone Oil, told Argus. The US Department of Agriculture's (USDA) latest corn
Last week, the International Maritime Organisation (IMO) forecasts for 2022-23 and 2023-24 are set to weigh on global
adopted a revised GHG emissions strategy. IMO members corn futures and prices, given an increase in global sup-
agreed to reduce GHG emissions by at least 20pc, and pref- ply expectations for 2023-24 and measured cuts to US corn

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Argus Dry Freight Issue 23-135 | Wednesday 12 July 2023

News

yields. Chicago-listed corn futures were trading lower on the Global 23-24 wheat output, stocks down: USDA
day at the time of writing. The US Department of Agriculture's (USDA) July World
For the 2022-23 marketing year, the agency took stock of Agricultural Supply and Demand Estimates (Wasde) report
US corn exports falling behind the pace needed to meet its revises down projected global 2023-24 wheat production
previous forecast of 43.82mn t in its June World Agricultural by 3.5mn t, with the consumption estimate up by almost
Supply and Demand Estimates (Wasde) report, and cut its the same amount. Lower ending stocks are now expected,
estimate to 41.91mn t. But higher feed demand expectations despite a 1mn reduction in projected exports and higher
at 137.8mn t, from 134mn t in June, more than offset lower beginning stocks.
estimates for exports and ethanol demand, leaving 2022-23 Russia
US corn ending stocks lower. That said, there is scope for USDA raised its forecast for Russian wheat exports by 2pc to
the USDA’s export forecast to be revised down further in 47.5mn t, still below the 48mn t forecast by Argus’ agricul-
future releases, with the Argus Agritel forecast at 41mn t. tural analytics arm Agritel.
July changes in the rest of the world were largely USDA’s estimate for Russian wheat production is un-
neutral, as the USDA raised Brazil’s production by 1mn t changed at 85mn t, slightly below Agritel’s 85.7mn t projec-
to 133mn t and lowered Argentina’s by the same amount tion.
to 34mn t, as the harvest is under way in both countries. EU
Exports for the two countries were adjusted similarly to USDA lowered its projection for EU 2023-24 wheat produc-
production expectations. The agency also raised Russia's to tion by 2.5mn t to 138mn t — still well above Agritel’s 132mn
5.1mn t from 4.2mn t. t forecast. But the forecast for EU exports is unchanged
Looking to the 2023-24 balance sheet, US yields were cut from June's projection, at 38.5mn t. Ending stocks are re-
to 177.5 bu/acre from 181.5 bu/acre, as the corn belt had vised down by 1.5mn t to 14.66mn t.
unseasonably dry weather in June, before rainfall returned Canada
at the start of July. But lower yield expectations were more USDA cut its forecasts for Canadian 2023-24 wheat produc-
than offset by higher planted and harvested areas, leaving tion and exports by 2mn t and 1mn t, respectively, to 35mn t
the US corn production outlook little changed. The Argus and 26.5mn t, as dry weather continues during spring wheat
Agritel yield stood at 171 bu/acre. development.
The USDA also expects slightly higher supply from Argentina
Ukraine, having already revised up its estimates for the USDA's estimate for Argentina’s 2023-24 wheat production
country in June. Ukraine’s production is now expected at falls by 2mn t from June to 17.5mn t, still well above 2022-
25mn t, up from 24.5mn t, and its exports at 19.5mn t, up 23's crop of 12.55mn t. Exports in 2023-24 are now projected
from 19mn t, boosted by EU imports and despite the uncer- at 12mn t, down by 1.5mn t.
tainty surrounding its ability to continue to export from its Australia
deep-sea ports. USDA left Australia’s wheat output forecast for 2023-24
In importing regions, the USDA cut the EU corn produc- unchanged at 29mn t — well above the 26.2mn t forecast by
tion outlook to 63.4mn t from 64.3mn t, which was still Abares and above the levels expected by Australian agri-
above the Argus Agritel forecast at 60mn t. The agency also cultural producers. Queensland and New South Wales will
strongly raised its expectations for EU corn imports to 24mn require rain throughout the southern hemisphere winter to
t, close to last year’s levels, despite production recovering prevent losses, with precipitation less likely with the arrival
markedly on the year. of El Nino conditions.
In China, the agency left the balance sheet unchanged China
despite concerns over unseasonably hot weather in some USDA left China’s wheat import forecast unchanged at 12mn
growing regions constraining the crop and the potential for t. But local market participants expect higher imports, as
greater feed wheat use to displace some corn use in the a low-quality winter wheat crop and high domestic prices
feed sector. And Canada’s production was revised higher, drive purchases for flour production and stock building —
but the country’s net trading position was left unchanged. particularly given that there have been no state purchases
In the wider feed grain sector, the agency cut its EU of local wheat crop for two years because of high prices.
production forecast by 2.5mn t to 50.4mn t, but this was still USDA's projection for China’s feed wheat consumption
above the Argus Agritel 48mn t. rises by 2mn t to 36mn t — 3mn t above 2022-23 consump-
By Jade Delafraye tion.
By Anna Sneidermane

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Argus Dry Freight Issue 23-135 | Wednesday 12 July 2023

News

French 2023-24 soft wheat export forecast rises The petroleum coke trading settlement and testing stan-
French soft wheat exports are forecast to rise in the 2023-24 dards were formulated based on current industry standards,
marketing year (July-June) following an increased production the QIEE said.
forecast, according to agricultural and sea products agency The futures contracts are listed for three trading months
FranceAgriMer (FAM). at a time. August, September and December (SYJ2308,
FAM has released its first estimates for French grain ex- SYJ2309 and SYJ2312) were listed at launch; the reason for
ports in the 2023-24 marketing year, with shipments of soft the absence of the October and November contracts was un-
wheat projected to rise to 17.51mn t from 16.6mn t in 2022- clear. Contracts will expire on the Tuesday of the last week
23. The increase is driven by higher expected production of each calendar month. The last day for physical settlement
this year of 35mn t, with lower exports to non-EU countries of each contract is set on the seventh-to-last working day of
— at 9.6mn t, down by 500,000t on the year — more than each calendar month.
offset by higher shipments to other EU members — at 7.8mn The QIEE designated Rizhao, Bohaiwan, Qingdao and
t, up by 1.4mn t on the year. Yantai ports in north China as contract delivery points. It
That said, soft wheat export estimates for 2022-23 were also named three licensed service providers – Hubei Tai Ting
revised down in FAM's July report — to 16.6mn t from the Trading, Shanghai Wo Cheng Non-ferrous Metals and Zibo Ye
16.7mn t estimated in June following slim demand outside
the EU at the end of the season, as the origin failed to price
in against competitors.
As for durum wheat, 2023-24 exports are forecast to Announcements
fall to 890,000t from 925,000t in 2022-23, with exports to
non-EU countries flat at 120,000t and shipments to other EU Proposal to standardise dry bulk vessel
member states projected to fall by 35,000t to 770,000t. assumptions
Barley and corn Argus proposes to standardise the vessel specifications
French barley exports are pegged slightly lower in the new it assumes for $/t freight rates and to bring its dry bulk
marketing year. FAM expects shipments to non-EU countries carbon costs of freight in line with the specifications in
to fall by 700,000t year on year to 2.5mn t — the lowest the table below.
since 2018-19. In contrast, barley exports to EU countries are Argus will accept comments on this change up to 14
projected to increase to about 3.75mn t from 3.18mn t in July. To discuss comments on this proposal please con-
2022-23. tact Nicholas Watt at nicholas.watt@argusmedia.com or
Estimated barley exports for 2022-23 have been revised +1-646-376-6132. Formal comments should be marked as
up by 105,000t from the previous report to nearly 6.4mn t. such and may be submitted by email to freightteam@ar-
FAM has also revised its corn export estimates for 2022- gusmedia.com and received by 14 July. Please note, for-
23 slightly higher, to 3.72mn t from the 3.69mn t predicted mal comments will be published after the consultation
in June. The revision came from expectations of increased period unless confidentiality is specifically requested.
shipments to other EU members, which represent the bulk of
France's exports. Vessel specifications
By Megan Evans Panamax
Capesize Panamax (Kamsarmax Supramax
variant)
China launches petroleum coke futures
Deadweight
The Qingdao International Energy Exchange (QIEE) has 180,000dwt 77,000dwt 82,500dwt 58,000dwt
tonnage
launched China’s first physically deliverable petroleum coke Max draught 18.2m 13m 14.43m 12.8m
futures contract. Constants (weight of
3,500t 1,500t 1,500t 1,000t
crew, stores, etc)
The QIEE petroleum coke futures contract, which was Fuel consumption
43t/d 25t/d 23t/d 23t/d
launched on 21 June, has a 30t per contract lot of 3-3.2pc (Ballast)
sulphur, 400ppm vanadium anode-grade coke, with premi- Fuel consumption
43t/d 26t/d 22t/d 24t/d
(Laden)
ums and discounts set for different specifications. Fuel consumption
5t/d 3.5t/d 3.5t/d 3.5t/d
The contract has a minimum trading increment of 1 (In port)
yuan/t. The contract’s upward and downward trading limits Ballast speed 13 knots 12.5 knots 12.5 knots 12.5 knots

are at 8pc, with trading margins for the futures set at 20pc Laden speed 12 knots 11.5 knots 11.5 knots 12 knots

of the contract value.

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Argus Dry Freight Issue 23-135 | Wednesday 12 July 2023

News

Xing Trading.
The opening price of the SYJ2308, SYJ2309 and SYJ2312 Argus Sustainable
contracts were Yn1,700/t ($235.78/t), Yn1,650/t and
Yn1,600/t, respectively.
Marine Fuels Conference
The August contract was closed at Yn1,910/t on 11 July September 20-22, 2023 | Houston, Texas, US
with a trading volume of 480t, up from Yn1892/t the day
prior. The September contract closed at Yn1,790/t with a
trading volume of 120t, up from Yn1,750/t the day before, Book
and the December contract settled at Yn1,760/t with a by August
trading volume of 60t, up from Yn1,750/t on 10 July. Trading 25 to save
volumes were flat from 10 July. $200
Argus assessed fob China 3pc sulphur, 200-250ppm
vanadium anode-grade green coke for June from $214/t to
$283/t.

www.argusmedia.com/sustainable-marine-fuels-conference

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