UCO freight rates set to remain high

TRANSPORT NEWS

UCO freight rates set to remain high

Freight rates for used cooking oil (UCO) nearly doubled through 2021 and while there are concerns that this market could face demand destruction, high prices, tight supply and a lack of alternative products suggest that demand will remain on track this year, according to leading shipbroker Simpson Spence Young (SSY) in its 2022 Outlook Report, published on 21 January.

SSY wrote that sulphuric acid, phosphoric acid and UCO were major bulk commodities and very important for the chemical tanker fleet, with Asia being a key supplier of sulphuric acids and UCO, and freights for both nearly doubling through 2021.

“Moreover, competition for other chemical and edible oil cargoes has been reduced, boosting freights for those.”

SSY said the situation in China would have a large impact on tonnage availability.

“Chinese authorities have placed restrictions on how many foreign ships a pilot is permitted to board, and the length of time the pilots must remain in quarantine afterwards. This has led to a shortage of pilots, and while berthing delays at some ports have eased, the more popular ports remain heavily congested and this situation will continue into 2022.”

Edible oils account for about a third of the seaborne chemical tanker trade.

In the dry bulk market, vessel earnings across all main bulker sizes in 2021 jumped to 13-year highs, with smaller bulkers suddenly in demand for both container and de-containerised cargoes due to chronic capacity shortages in the container market.

Oilseeds are usally transported on Panamax vessels, which can carry 60,000100,000 dwt of cargo, as well as on smaller Handymax (35,000-50,000dwt) or Supramax carriers (50,000-60,000dwt).

“In early January 2020, a 38,000 dwt Handysize bulker would have earned an average of around US$12,000/day, and a Supramax potentially a little less,” the SSY report said. “As we neared mid-2021, we saw rates of around US$28,000 and US$32,500 respectively.”

This also resulted in the more than doubling of prices for vessels.

SSY chairman Mark Richardson said COVID would continue to have an effect in 2022. “In sectors where pricing has been vulnerable to weakness, it dampens growth prospects and where there is supply tightness, it adds uncertainty and stokes volatility.”

IN BRIEF

USA: Independent US liquid fuels storage provider Chemoil Terminals has been bought by an unnamed investor group and would now be known as Olympus Terminal, Business Insider reported on 20 December.

Headquartered in Long Beach, California, Chemoil Terminals is the second largest independent petroleum storage provider in southern California for a range of refined products including diesel, renewable diesel, biodiesel and gasoline, according to the report.

The company operates two terminals — the Carson Terminal and the Long Beach Marine Terminal— that are connected by an extensive pipeline network.

New storage and rail facility for camelina

Global Clean Energy Holdings (GCEH) plant science subsidiary Sustainable Oils is planning to build a storage and rail loading facility for its camelina in the first quarter of 2022.

Sustainable Oils said on 19 November that the 600,000 bushel storage facility in Havre, Montana, USA, would expand its presence in the region and create logistical advantages during camelina harvest for both the company and its contract growers.

“A dedicated grain facility in Havre provides regional contract growers added convenience and flexibility for delivery and storage of harvested camelina,” Sustainable Oils president Mike Karst said.

“With our adjacent proximity to the CHS Big Sky-Havre rail

Photo: Rothamsted Research Sustainable Oils aims to secure contracts to grow more than 400,000ha of its camelina varieties in Montana and the High Plains in the USA

siding, we will be able to directly load unit trains of our grain to streamline transportation logistics to GCEH’s biorefinery in Bakersfield, California, or other extraction plants.”

ExxonMobil has made a five-year commitment to purchase up to 832M litres of renewable diesel produced at GCEH’s Bakersfield refinery, said Sustainable Oils.

Stanlow Terminals to develop UK’s largest biofuels hub

Independent bulk liquid storage provider Stanlow Terminals announced on 13 December that it is set to develop the UK’s largest biofuels storage hub over the next three years.

The 300,000m³ facility at the Stanlow Manufacturing Complex and Tranmere Terminal, in the Port of Liverpool, would allow the storage, blending and distribution of biofuels for use in the road, aviation and marine sectors, the company said.

Although the services offered by Stanlow Terminals currently included biofuels storage, the company said the new facility would support the growth of sustainable aviation fuel (SAF) and hydrotreated vegetable oil (HVO) initiatives and would include waste-based feedstock import facilities, blending and capacity expansion for existing bio-ethanol and bio-methanol.

Additional storage investment opportunities for low carbon energy products, such as e-fuels, bio-LPG, bio-methane, hydrogen and ammonia were all progressing through feasibility studies, the company said.

Earlier in 2021, Stanlow Terminals joined forces with parent company Essar and Fulcrum BioEnergy to develop a storage facility at Stanlow for SAF manufactured from non-recyclable household waste.