Availability in Europe
By far the hottest category now is chemicals. We receive a lot of storage requests for specialty chemicals, which due to their toxic state or high flammability need special treatment. Small, best state of the art tanks such as SS316L are in high demand, sometimes even smaller than 500 m3 which are difficult to find. On top of that a lot of flexibility is asked from the terminals, different modes of transportation to optimize logistics to the end consumer is requested. More and more customers are forced to find their storage in the surrounding areas as ARA cannot keep up with the increased number of requests. For veg oils it is quite similar, occupancy remains high forcing companies to look at alternative locations. France and Spain being most suitable looking at the geographical location and vessel routes.
What stands out is the increasing capacity for minerals coming available in the Mediterranean in 2nd and 3rd quarter of this year. A lot of terminals show their available tanks which can be used for basically any product (k1) compared to Northern Europe, which still shows a high rate of occupancy. Due to the competition in the Med, we see rental fees drop quickly as terminals rather have activity at site than leaving tanks unused. Also, many terminals have commitments with their port authorities to handle a certain number of sea-going vessels and tons. For the ports a guaranteed income on harbour duties and fees.
Global availability
In general the mineral market is oversupplied. Middle east is still the best example of disappearing contango and its effects. Many tanks are available in that region. In the far east there are still tanks to be found for basically any product. In the USA we see also availability and sublease opportunities. The rates in the USA haven’t dropped dramatically like the rates for distillates in Europe, but still more attractive rates can be found.
Mineral market
The oil market has recovered quite a bit from the sell-off witnessed 2 weeks ago on Libyan force majeure and positive OPEC rhetoric. After the dip towards the 60 level, Brent traded around 67 again this Monday, but 70 USD still seems to be a big hurdle to take with the US topping 10MM bbl of production. At the time of writing Brent is back to 64 on stock builds in the US.
Fuel Oil is lacklustre, the curve is flattish and the arb to Asia is closed. Storage demand remains weak and still we hear news of tanks being given back to terminals. On gasoline the March/April spread has weakened quite a bit, increasing demand for spot (contango) storage. But the market for gasoline tanks is still tight so for opportunistic traders, empty space is hard to find. The distillate tank market continues to weaken. We witnessed quite a bit of interest below the market when the curve got given heavily 2 weeks ago but since then, spreads have recovered and interest died off. The front of the market is weakening again today on flat price, but it is not propagating throughout the curve. We still see biodiesel players coming in to take advantage of the weak distillates tank market though, so that’s helping terminals a bit to ease the pain.
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