May 2021 — blkcommodities.com

BLK Shipping Weekly – Shipping Market Rates Updates

Welcome to BLK Shipping Weekly, our Friday’s update from the shipping market. In this issue, we’ll be covering:

Wet Cargo
Dry Cargo
Containers
Gas

Subscribe to our newsletter to stay up-to-date with our Shipping Weekly and follow us on Facebook and LinkedIn to never miss an update.

Wet Cargo

Charter rates appear to be stabilising, especially in view of the demand uplift in June, driven by easing of lockdowns in UK and Europe and roll-out of vaccination programmes in the western countries. These factors are expected to drive energy demand up and cargo with it, increasing the overall demand for tonnage and hold space.

With the winter months ahead of us, rates can be expected to start picking up for the rest of the year.

VLCC – rates fell from the all-time high in April 2020 and continued sliding. Outlook: Stable

Suezmax – rates still suffering from the oversupply of tonnage in the market. Downward trend on all routes, meaning good news for shippers. Outlook: Negative

Aframax – relatively stable rates, with demand for hold space still counterbalanced by relatively large supply of tonnage. Outlook: Stable

Dirty Products – stronger rates, primarily driven by a mini-surge in demand for MR tanker tonnage, especially on atlantic routes.

Clean Products – weak rates, owing to the fact that most world refineries are still operating under capacity due to the low demand for refined fuels. With airlines still down and road traffic at a fraction of the pre-pandemic levels, the market remains weak.

MR – uptake in demand drove rates up, with a positive outlook for the weeks ahead. Outlook: Positive

LR1 – demand for log-range tankers remains low. Slow pick-up is possible depending on the easing of lockdowns and demand for refined products on each side of the Atlantic. Outlook: Stable

LR2 – demand for log-range tankers remains low. Slow pick-up is possible depending on the easing of lockdowns and demand for refined products on each side of the Atlantic. Outlook: Negative

Handy – Slow pick-up is possible depending on the easing of lockdowns and demand for refined products on each side of the Atlantic. Gloomier in SEA. Outlook: Stable

Dirty Panamax – Rates on the rise, looking positive to the summer, when investors anticipate a further increase of energy requirements from western nations. Outlook: Positive

Dry Cargo

Capesize – rates climbing steadily over the course of 2021, although the spot demand weakened in western regions due to summer holidays approaching. Outlook: Stable

Panamax – stable demand does not lead to expect a growth in rates going forward. Outlook: Stable

Supramax – rates climbing steadily over the course of 2021, although the spot demand weakened in western regions due to summer holidays approaching. Outlook: Stable

Handysize – rates climbing steadily WoW, primarily driven by demand for raw materials in China. Outlook: Positive

Container

Container rates surge continues unhindered on all fronts, with rates up from 100% to 163% compared to pre-pandemic levels. Demand looks strong and will continue to be as western economies get out of lockdowns and people shop around for finished goods, using up the savings gathered during the pandemic.

We’re expecting to see a brake to this trend, however, with the effect of inflation, which is going to off-set the buying craze and put a lid on overall demand.

Inflation in the UK has doubled MoM, hitting 1.5% in April, and it will continue rising. Same goes for the US, where prices surged 4.2%, up from 2.6% in March and the EU, with inflation currently at 1.6%. As some central banks work to put a brake on inflation by upping base rates, increase in consumer prices may hamper demand after the summer.

We are therefore likely to see a stabilisation or decline of container rates as we progress into Q3 2021.

Outlook: Positive

Gas

Rates for Large Gas Carriers picked up globally, supported primarily by the low availability for suitable tonnage in the Asia-Pacific regions.

As plenty of tonnage is currently tied-up in dock for ballast water treatment systems installation, we are to expect a general softening of the rates next month, as the ships come back into the market.

Outlook: Stable

To learn more about how we can support your business shipping as cheaply and environmentally-friendly as possible, visit us at BLK.

Subscribe to our newsletter to stay up-to-date with our Shipping Weekly and follow us on Facebook and LinkedIn to never miss an update.

UK Emission Trading Scheme Launches in Bid to Achieve Net-Zero.

Carbon trading opens up in the UK with the launch of the ETS (Emissions Trading Scheme), which went live yesterday.

What’s the ETS?

The UK ETS is the equivalent of the European Climate Exchange, serving as a substitute to the European exchange post-Brexit.

How does ETS work?

Emissions trading schemes work on the ‘cap and trade’ principle, where a cap is set on the total amount of certain greenhouse gases that can be emitted by sectors covered by the scheme. This limits the total amount of carbon that can be emitted and, as it decreases over time, will make a significant contribution to how the UK will meet its Net Zero 2050.

Each year, businesses and aircraft operators have to report their overall emissions. Each businesses will be able to work within its allowable cap. If a company does not manage to remain within the allocated allowance, they can buy emission allowances on the secondary market.

Earning from emission reduction

Allowances can be traded with other market participants as needed, so that businesses which managed to reduce their emissions beyond their allowance can sell their own credits and monetise on their reduced footprint.

BLK can support your business reducing its overall carbon footprint.

Through our Supply Chain service and Carbon Trading capability we:

Help you reduce your overall emissions by sourcing from local suppliers and/or organising bulk deliveries for multiple companies, thus reducing shipping footprint;

Trade your carbon allowances earned in this way on the UK ETS, so that you earn thanks to the emissions you off-set;

Aggregate your purchasing volume with that of other companies, negotiating best prices with suppliers and delivering savings to your bottom line.

Not only you can save by outsourcing your supply chain to us, but you would open a completely new revenue stream going straight into EBITDA.

Carbon trading is going to be the next “big thing” and presents a clear opportunity for forward-thinking companies which are serious in reducing their footprint.

Market Size

The global Carbon Market is currently worth $240B.

The demand for voluntary carbon credits is set to increase x15 by 2030 – according to McKinsey’s research, and its size will be 100 times today’s value by 2050.

carbon market set to grow 100 times by 2050 — Source: McKinsey & Co.

Carbon Credits are valued OTC at $30.05, with a growth of 56.25% YoY on the European Carbon Exchange alone, where prices soared from €9/MT to over €25/MT between 2018 and 2019.

Impact on UK & Scotland

If just 1% of Scottish businesses were to source raw materials locally, this would contribute to a reduction of 500,000 t of CO2 from the atmosphere, whilst creating 3,700 Scottish Jobs and adding £700M to the Scottish economy.

On a UK level, the reduction of CO2 linked to the increase by 1% of local sourcing (as opposed to importing) would near 2 million tons, with £2.6B added to the UK economy and create 14,000 new jobs.

To keep up-to-date with the UK ETS roll-out, learn how to reduce your overall carbon footprint and monetise on your carbon allowances, visit us here and get in touch.

ULSD: Growing Demand Drives Rates up 70% in 6 Months

Market Outlook

Global oil demand is set to recover as vaccination programmes continue progressing, especially in developed economies. Overall demand is expected to reach 103.2 million barrels per day by 2025, up from 91 million barrels per day in 2020.

Travel corridors and western economies coming out of lockdowns are the main drivers and are pushing the price for distillates higher and higher.

Problem

In the last two weeks alone, the price for EU road diesel went up over 11% in CIF terms.

Price for ULSD rose 70% since October 2020, with ULSD 10ppm Cargoes CIF MED Futures breaking through the $560/MT threshold in August 2021.

Steep growth of fuel rates - up 70% since October 21

Before this trend reverses we have to wait until Q1 22, with futures price starting to come back down and attesting above the $555/MT mark for the first half of next year.

Solution

A solution to off-set the impact of rising fuel prices on companies’ balance sheets is to shift over to spot transactions. Doing so as part of a purchasing pool helps companies’ negotiating position and drives down the fuel rates accordingly.

Opportunity

BLK pools the purchasing volume of multiple businesses across the UK and Italy. It recently negotiated a discount of – $15/MT on the Platts rates for ULSD with an Asian supplier. This was possible due to our volume and the supplier’s production costs lower than US/European competitors.

Join BLK to unlock our leading market rates and discover opportunities to create new revenue streams for your business. BLK supports your emission reduction and trades carbon credits on your behalf.

Save $15/MT on ULSD starting today with BLK Supply Chain. It is 100% free – we earn on the back of what were help you save.

Get – $15/MT discount over the current market price for ULSD
Get cash back on every order
Open a new revenue stream through carbon trading

Discover more

Tender for the procurement of various distillate fuels on behalf of BLK partners

This week BLK is launching a tender for the procurement of various fuels on behalf of its partners. BLK Trading is a division of BLK Global Ltd. specialising in providing supply chain solutions to customers across multiple industries.

BLK aggregates the purchasing volume of multiple buyers across various industries, conducts supplier vetting, assessment and negotiations on behalf of our partners and arrange spot and/or long-term supply deals on the basis of its proprietary evaluation criterion based on Quality – Cost – Service Delivery.

BLK aims to deliver best-in-class services to key industry players at market-leading rates. With these premises, BLK wishes to tender for the supply of 500,000 MT of various fuels, including but not limited to Diesel EN590, Petrol/Gasoline EN228, Jet A-1 DS 91-091, Aviation Biofuel, Biodiesel EN14214, LPG EN589 and others, which are to be purchased by the BLK’s buyer pool through BLK’s proprietary platform blkcommodities.com.

Bids must be delivered electronically on or before the 31st of May 2021 at 12:00 UTC, at which time the submissions will be opened in the presence of those tenderers’ representatives who may wish to attend.

If you wish to take part to this tender, please reply with your expression of interest to this email by Wednesday 13th May 2021 at 16:00 UTC. Upon reception of the expression of interest, tenderers will receive a confidential tender pack electronically.

This is a great opportunity for traders, majors and producers wishing to expand their reach and customer portfolio within the Med area and the UK.

We look forward to receiving your bid and working together as strategic partners going forward.

Contact: info@blk-global.com

Register to get started now.