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Aframax carries out rescue mission in Mediterranean

  • Market: Freight
  • 27/09/21

The 2020-built Aframax Aristofanis, owned by Greek firm Capital Ship Management, has arrived at the Egyptian port of Sidi Kerir after diverting to rescue 150 people in the eastern Mediterranean last week.

The incident took place late on 23 September as the vessel was ballasting towards Sidi Kerir. The ship master reported a small boat, around 15m long, with people on board. Those rescued were taken to Crete where they were received by the Greek authorities, according to Capital Ship Management. The Aristofanis then continued its journey and is now at Sidi Kerir terminal, according to shiptracking data.

Merchant ships involved in Mediterranean rescues have encountered difficulties in the past. The Handysize tanker Maersk Etienne rescued 27 people in the Mediterranean in August last year at the request of Maltese authorities, but then faced 38 days in limbo as no country was willing to let the ship dock. That was the third such incident in 2020, after the merchant ships Marina and Talia were delayed for four and six days, respectively, after rescuing people at sea, according to the International Chamber of Shipping (ICS).


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23/12/24

Viewpoint: US LPG cargo premiums poised to fall

Viewpoint: US LPG cargo premiums poised to fall

Houston, 23 December (Argus) — The booming US LPG export market has fueled record spot fees this year for terminal operators that send those cargoes abroad, but those fees are poised to fall next year as additional export capacity comes online. US propane exports surged over the past two years, hitting an all-time high of 1.85mn b/d in the first quarter of this year, according to data from the US Energy Information Administration (EIA). Terminal fees for spot propane cargoes out of the US Gulf coast hit an all-time high of Mont Belvieu +32.5¢/USG (+$169.325/t) in mid-September. US propane production is expected to grow by another 80,000 b/d in 2025 to 2.22mn b/d while the outlook for domestic consumption is fairly steady, at 820,000 b/d next year — meaning even more propane will be pushed into the waterborne market. But that is dependent on US infrastructure keeping up with the pace of production. US export terminals in Houston, Nederland and Freeport, Texas, have run at or above capacity for the last two years given the thirst for cheaper US feedstock, largely from propane dehydrogenation (PDH) plant operators in China. This demand has created bottlenecks at US docks, and midstream operators like Enterprise, Energy Transfer, and Targa have rushed to ramp up spending on both pipelines and additional refrigeration to stay ahead of the wave of additional production. US gas output spurs LPG exports As upstream producers have ramped up natural gas production ahead of new LNG projects, most producers are counting on LPG demand from international outlets in Asia to offload the ethane and propane the US cannot consume. For the past four years, Asian buyers have been more than happy to oblige. US propane exports to China rose from zero in 2019, when China imposed tariffs on US imports, to an average of 1.36mn metric tonnes (t) per month in January-November 2024, according to data from analytics firm Kpler, making China the largest offtaker of US shipments. US exports to Japan averaged 480,000t per month throughout most of 2024, and exports to Korea averaged 460,000t per month in the first 11 months of 2024. China, Korea, and Japan received 52pc of US propane exports in 2024, up from 49pc in 2020, according to data from Vortexa. Strong demand in Asia has kept delivered prices in Japan high enough to sustain an open arbitrage between the US and the Argus Far East Index (AFEI). Forward-month in-well propane prices at Mont Belvieu, Texas, have remained well below delivered propane on the AFEI. In 2020, Mont Belvieu Enterprise (EPC) propane averaged a $143/t discount to delivered AFEI — a spread that has only widened as additional PDH units in Asia have come online. During the first 11 months of 2024, the Mont Belvieu to AFEI spread averaged a hefty $219/t, leaving plenty of room for wider netbacks in the form of higher terminal fees for US sellers, especially as a wave of new VLGCs entering the global market has left shipowners with less leverage to take advantage of the wider arbitrage. The resulting wider arbitrage to Asia has kept US export terminals running full for the last two years. So when a series of weather-related events and maintenance in May-September limited the number of spot cargoes operators could sell and delayed scheduled shipments, term buyers willing to resell any of their loadings could effectively name their price. This spurred the record-high premiums for spot propane cargoes in September. New projects may narrow premium An increase in US midstream firm investments in additional dock capacity and added refrigeration in the years ahead could narrow those terminal fees, however. Announced projects from Enterprise and Energy Transfer, in particular, will add a combined 550,000 b/d of LPG export capacity out of Houston and Nederland, Texas by the end of 2026. Enterprise's new Neches River terminal project near Beaumont, Texas, will add another 360,000 b/d of either ethane or propane export capacity in the same timeframe. These additions are poised to limit premiums for spot cargoes by the end of 2025. Already, it appears the spike in spot cargo premiums to Mont Belvieu has abated for the rest of 2024. Spot terminal fees for propane sank to Mont Belvieu +14¢/USG by the end of November. The lower premiums come not only as terminals resume a more normal loading schedule, but at the same time a surplus of tons into Asia ahead of winter heating demand has narrowed the arbitrage. The spread between in-well EPC propane at Mont Belvieu fell from $214.66/t to $194.45/t during November. A backwardated market for AFEI paper into the second quarter of 2025 means US prices are poised to fall more in order to keep the spread from narrowing further. By Amy Strahan Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.

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Viewpoint: Brazil may face road bottleneck in 1Q


23/12/24
News
23/12/24

Viewpoint: Brazil may face road bottleneck in 1Q

Sao Paulo, 23 December (Argus) — The Brazilian soybean harvest and fertilizer deliveries for the country's 2024-25 second corn crop will likely drive first-quarter grain and fertilizer road freight rates higher. Grain freight rates have been unusually low in 2024 because lower international soybean prices discouraged producers from doing business in most months. But market participants expect greater demand for transportation services in export corridors in 2025, as an expected record 2024-25 harvest combines with a US dollar that has strengthening against the Brazilian real, driving export demand. Brazil will produce 166.2mn metric tonnes (t) of soybeans in the 2024-25 cycle, an increase of almost 13pc from the previous season, according to national supply company Conab's third official estimate for the cycle. The 2024-25 soybean harvest in Mato Grosso state — Brazil's largest producer — will total 44mn t, also 13pc above 2023-24 production, according to the state's institute of agricultural economics Imea. Mato Grosso's soybean planting pace for 2024-25 has fluctuated significantly over the growing season, initially advancing slowly because of dry weather, and then speeding up once rains returned. Planting was complete on only 25pc of the almost 12.7mn hectares (ha) expected for the cycle by 18 October, less than the 60pc reached at the same time in 2023 for the 2023-24 cycle. But planting increased by 68.6 percentage points in the following three weeks, totaling 93.7pc by 8 November. As a result, more than half of the soybean planted area in Mato Grosso was carried out in the same three week period. That raises concerns among market participants about high competition for export transportation and available vehicles when all those crops become ready for harvest at the same time, resulting in a logistical bottleneck. Market participants expect lower freight rates for exports during the 2024-25 second corn harvest, set to take place in the second half of 2025. Demand from the Brazilian domestic market will remain at a consistently high level, especially from ethanol units, whose demand for corn was high in 2024, as prices carried a premium to the export market, and also contributed to lower export volumes. This should lead to lower grain freight rates during the second half of 2025, with a significant portion of grain destined to meet the Brazilian industry's needs. Corn ethanol production in Brazil is expected to total 7.2bn liters (124,865 b/d) in the 2024-25 cycle, a 22pc increase from 5.9bn l in the previous cycle, according to Conab. The company projects that 1t of corn can produce around 400l of ethanol, which means that approximately 18mn t of corn will be consumed by the ethanol industry. Brazil is expected to produce around 86.2mn t of animal feed in 2024, 2.3pc more than it did in 2023, according to the sector's national union Sindiracoes. This should stimulate demand for about 55mn t of corn for all animal feed production expected this year. Animal feed production is expected to grow further in 2025 to 87.8mn t. Ferts freight rates may also increase Fertilizer transportation may face logistical bottlenecks to move inputs from ports to crops in early 2025 because of the slow pace of fertilizer purchases, especially nitrogen, for the 2024-25 second corn harvest. With the purchase window coming to a close by the end of December, market participants estimate that these nutrients have to arrive at Brazilian ports by early January, so that they can be transported in time for application during the grain harvest. That may also increase competition for vehicles in the first quarter of 2025, especially in January, when the supply of trucks is reduced following end-of-year festivities. Under these circumstances, higher fertilizer freight rates and higher costs for road logistics are expected. By João Petrini Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.

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US Army Corps proposes new Illinois River lock


18/12/24
News
18/12/24

US Army Corps proposes new Illinois River lock

Houston, 18 December (Argus) — The US Army Corps of Engineers (Corps) has proposed a new lock to replace the LaGrange Lock and Dam (L&D) near Beardstown, Illinois, as part of the Navigation and Ecosystem Sustainability Program (NESP). The project would be the first new lock for NESP, a program that invests in infrastructure along the Mississippi and Illinois rivers. The new 1,200ft proposed LaGrange Lock would allow for passage of more barges in a single lockage, instead of having to split the tow in two with the current 600ft LaGrange Lock. At the moment, most tows trying to pass through the LaGrange lock experience multiple hour delays. The new LaGrange lock would have an estimated cost of $20mn, with a construction timeline of five years. The project area would be located on the west bank of the Illinois River near the 85-year old LaGrange L&D, encompassing 425 acres. Real estate acquisition, design plans and contractors are already in place, said the Corps. The current LaGrange lock would remain in operation and become an auxiliary chamber. The Corps opened the upcoming project to public comments on 11 December and will close on 3 January. NESP has four other projects along the Mississippi River. Another full lock construction project is anticipated for Lock and Dam 25. By Meghan Yoyotte Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.

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Alabama lock expected to reopen late April


18/12/24
News
18/12/24

Alabama lock expected to reopen late April

Houston, 18 December (Argus) — The main chamber of the Wilson Lock in Alabama along the Tennessee River is tentatively scheduled to reopen in four months, according to the US Army Corps of Engineers (Corps). The Corps expects to finish phase two of dewatering repairs on the lock on 20 April, after which navigation can resume through the main chamber of the lock. The timeline for reopening may shift depending on final assessments, the Corps said. Delays at the lock average around 12 days through the auxiliary chamber, according to the Lock Status Report by the Corps. Delays at the lock should wane during year-end holidays but pick up as spring approaches, barge carriers said. The main chamber of the Wilson Lock will have been closed for nearly seven months by the April reopening after closing on 25 September . By Meghan Yoyotte Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.

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Viewpoint: European tanker rates meander into 2025


18/12/24
News
18/12/24

Viewpoint: European tanker rates meander into 2025

London, 18 December (Argus) — European Medium Range (MR) and Handysize tanker rates are set to remain subdued in 2025 as a continued shortfall in US gasoline demand and west Africa's growing independence from imports leaves MRs with little to do. Europe has become increasingly able to survive on domestic gasoline production in 2024, because of modest economic growth and frequent refinery maintenance procedures. This has kept prices high and made gasoline less competitive in export markets, which could be set to continue in 2025, potentially keeping exports in line with 2024. European gasoline exports on MRs to the US in 2024 dropped to the lowest since 2020. The average in the January-November period was just 206,000 b/d, down from 226,000 b/d in all of 2023 and almost as low as 193,000 b/d in 2020 during the Covid-19 pandemic. Exports in 2025 will probably remain close to 2024. This drop pushed MR rates to the lowest since 2021, although they have not yet moved back to the levels that were standard before the Russia-Ukraine war and associated sanctions, which led to sweeping changes in the tanker market in 2021. The 2024-average rate between the UK Continent and US Atlantic coast was $26.67/t, down from $32.63/t in 2023 and $37.94/t in 2021. But this was still significantly above the 2019 level of $19.30/t. The time charter equivalent (TCE) rate — a measure of the money a shipowner generates after fuel and other costs — on the route was around $13,250/t in 2024, which was above shipowners' typical operating cost of $5,000-7,000/d. Rates in 2025 seem likely to hew closely to 2024 levels as gasoline fundamentals in Europe and the US serve to limit the transatlantic trade. In Europe, a high amount of planned and unplanned refinery maintenance and domestic consumption served to keep European gasoline prices comparatively high and limited US demand. At the same time, US production of gasoline increased, making it less reliant on imports. This has been particularly apparent in the fourth quarter of 2024 when European gasoline exports hit a 52 month low and 2025 will probably see the same pattern. In west Africa, the second key MR market, the 650,000 b/d capacity Dangote refinery in Nigeria is now producing gasoil and gasoline, which led to a decline in spot MR demand from Europe. Dangote is yet to operate at full capacity but continues to ramp up and west Africa will become increasingly able to cover demand with domestically-produced clean products. This will mean the MR market in 2025 will be focused almost exclusively on the slowing Europe to US route, which will keep rates under significant pressure. Diesel doldrums depress LR2s Long Range 2 (LR2)-sized diesel/gasoil rates into Europe should have hit a peak in 2024 as tankers had to divert around the Cape of Good Hope to avoid attacks from Yemen-based Houthis in the Red Sea, and the Mideast Gulf remained Europe's primary diesel supplier. But instead the market slumped and this trend seems set to continue in 2025. The fourth quarter in particular has been lacklustre with rates half of what they were at the same point in 2023. European diesel imports are particularly subject to east Asian naphtha demand, as both trades compete for tankers in the Mideast Gulf. East Asian naphtha demand has been slow and is set to remain so in 2025 as downstream margins have weakened far enough that many of the region's refineries have shuttered operations temporarily. At the same time, several very large crude carrier (VLCC)-sized diesel shipments on the route in August boosted European inventories and stunted demand through the third and fourth quarters. European importers switch to US MR-sized diesel cargoes when LR2 freight rates rise, which will again create a ceiling for LR2 rates in 2025. By Erika Tsirikou Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.

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