In this week’s Market Movers Americas, presented by Carla Bridi:
- USGC-Europe crude exports shift to Suezmax tankers
- US HRC market searches for floor
- Renewable natural gas pricing spreads narrow
- Texas grid considers change to battery rule
This week, the crude tanker market is weighing the cost of hauling Suezmax versus Aframax cargoes from the US Gulf Coast to Europe. Suezmax tankers at 145,000 mt are clocking in at just 39% of the total cost of taking a 70,000 mt Aframax on a dollar per metric ton basis, but with twice the cargo capacity. With the spread this wide, Aframax demand and rates are expected to fall even further.
US hot-rolled coil market participants are looking for prices to reach a floor, as supply concerns and a recent wide array of offers have limited spot buying. Year to date, US hot-rolled coil prices have fallen nearly 20%, with some expecting pricing to bottom below 800 dollars per short ton.
On the West Coast, renewable natural gas pricing spreads in California remain narrow, as the differential between California and California-excluded RNG recently reached a record low of $2.14/MMBtu. Since the start of the year, the erosion of California Low Carbon Fuel Standard front-quarter credit prices has pressured California RNG premiums and weighed on the market for the foreseeable future.
Texas’ grid operator is considering how it monitors batteries’ state of charge for ancillary service markets. The Electric Reliability Council of Texas Board of Directors will meet on Tuesday to discuss a revision proposed by Texas regulators. Critics have charged the proposed measure is discriminatory against the fast-growing battery sector.
I’m Carla Bridi. Thanks for kicking off your Monday with S&P Global Commodity Insights.