Group II supplies from overseas markets to Europe have been steadily falling in recent years, particularly those from the US. In 2019, the introduction of Exxon Mobil’s Rotterdam facility gave Europe its own domestic production capacity, reducing the need for imports, before the pandemic sent the markets into turmoil followed by European quotas piling on further pressure. US production was also hit by February’s deep freeze in the Gulf, leaving less product for export, instead being used in the domestic market. As a consequence of these factors, Group II exports from the US to Europe slumped ..read more

Yesterday, I talked about the usual downturn in LPG offtake at this time of year in South America. There is typically pressure on imports to countries like Chile and Brazil due to less demand for LPG heating fuel. This year, however, there is more demand for coronavirus mitigation equipment that uses LPG feedstock to produce plastics and films. Also, the reduction in driving caused by the virus has weighed on Latin American refineries’ production of gasoline. That, in turn, has reduced refinery production of LPG in the region, and thus boosted LPG imports. Brazilian LPG imports peaked this yea ..read more

December’s global LPG trade maintained the market’s recent strength, with global discharges totaling 4.36 million barrels per day – a gain of 2% from November. For the full year, the late-year recovery in offtake helped to counter the weakness in the second quarter, and averaged 4.25mn bpd. That was up 0.7% from 2019. South Asia was the strongest region on a volume basis, with an increase of 146,000 bpd from November, while North Africa and North America gained the most on a percentage basis. Given strong demand in the face of higher LPG prices at year-end, it is possible that offtake continue ..read more

Steadily rising prices of ethylene between mid-April and mid-September caused many buyers to turn to alternative sources, but a recent pullback in the market has rekindled interest. Ethylene offtake this month is currently around 172,825 metric tons, and compares to 253,399 Mt in October. Ethylene prices on the US Gulf Coast rallied more than 225% between a low in April near 8c/pound and a peak in September at more than 26c/lb. At that time, buyers reacted through a combination of reducing purchases, working off existing stockpiles or possibly turning to more locally produced ethylene with fee ..read more

Oilseeds — Brazilian soybean loadings last month were a record for March. The combined February and March loadings of 16.8 mmt we tracked were 0.6 mmt above last year’s record volume. The significant lineups and loadings so far in April indicate potential to exceed last year’s record this month. — Argentine soymeal loadings recovered in March both MoM and YoY while loadings so far in April continue to recover MoM. — The April WASDE report raised the Brazilian soybean crop by 2 mmt to a record 136 mmt, surprising the market. — The WASDE report lowered China soybean crush by 2 mmt, a reflection ..read more

Oilseeds –         Despite a recent pick-up in the harvest and loadings pace, incremental selling by Brazilian farmers has dropped as the cumulative harvest has been slow relative to the existing contract commitment. –         Up until March 12, Brazilian farmers have pre-sold 63% of the 20/21 soybean production, compared to 61% a year ago and the 5-year average of 49%. –         Brazil soybean harvest is significantly delayed this year, causing the export wind ..read more

Corn –Brazil second crop corn is now nearly all planted but 20-30% of it is planted outside of the ideal window. –Argentina received widespread rain last week, though they have likely come too late for corn and beans to undo the previous damage. Corn is mostly in filling to maturing stages of development in the high-yielding central areas of Argentina. –The biggest weekly Chinese purchase of US corn (3.9 mmt) since January took place last week, coinciding with the US-China summit in Alaska. –Chinese corn import margin has declined from January levels with the recent CBOT rally, domestic ASF ou ..read more

Oilseeds — Funds have trimmed the net long positions on soyoil, though they remained a 10-year high. On the contrary, funds are only modestly long soybean meal. — Delayed soybean supply and tight palm oil fundamentals continue to drive the tightness in the oilseeds complex. It is expected stocks will rebound in April/May, when we might see the relative strength of soyoil vs soymeal weaken. — Aided by crude recovery and tight fundamentals, palm oil rallied further, pushing soyoil and the CBOT oilshare to a 10-year high. — With strong global soymeal and soyoil demand, the board crush margin rema ..read more

Oilseeds -- The March USDA report was typically not a big mover. Market expects the USDA would not further lower US soybean ending stocks in the March WASDE, which is already at bare minimum levels. -- The USDA remains conservative at the US demand estimates. The March WASDE left the US soybean crush at 1.6% higher YoY while the cumulative crush for the crop year has reached 5.7% higher YoY. -- The focus of the March report historically has been South America. The changes made to the south American soybean crops on Tuesday were largely in line with market expectations (+1 mmt Brazil, -0.5 mmt ..read more

Emissions from international shipping are a key contributor to global climate change, with the International Maritime Organization (IMO) finding the sector responsible for approximately 2% of global emissions in 2018. Yet unlike the power generation sector, which can point to a host of low-emission technologies that make CO2 mitigation achievable in the short-term, the shipping industry is without a consensus on a green solution. This is a problem, as the IMO projects shipping’s business-as-usual emissions will increase 50% above 2018 levels by 2050, despite the IMO’s goal of cutting greenhous ..read more