We need to talk about Tangshan! Freight chat: fuel oil market volatility & fertilizer options

Freight Up! Fuel oil, iron ore, steel and other commodity insights from Freight Investor Services

From Quotas to Cuts: The Turbulent High Sulphur Fuel Oil Market

Does the volatility in the high sulfphur fuel oil market feel all too familiar?

Have you been told that closely monitoring crude oil importing quotas and export cuts is the key to understanding this volatility?

But despite your efforts, you're still left without a clear understanding of the factors driving this market's unpredictability?

The pain of taking ineffective action and not getting the desired results can be frustrating.

It's time to break free from this cycle and gain a deeper insight into the real drivers of volatility.

Join us in this episode of the Freight Up! podcast from FIS as we uncover the hidden forces behind the high sulphur fuel oil market's turbulence, empowering you with the knowledge to navigate this market with confidence and success.

"So we're expecting, or I think the trade is expecting, that volatility continues to remain a little bit subdued compared to the beginning of the year." - Taylor Eastman - (click for LinkedIn)

Hi, Fernanda here! I'm host of the Frieght Up podcast!

Archie Smith, Taylor Eastman, James Robinson, Joshua Stern, Kerry Deal and Hao Pei join me to discuss the current market trends and the latest happenings in the world of freight and commodities including Russia, China, ferrous, scrap and all the other stuff we like to dig into!

OPEC Cuts and Weak Demand Outlook

The world of crude oil is an intricate balance of supply and demand. And currently, the scales are tipping heavily towards the surplus end.

As Saudi Arabia lengthens its voluntary oil output cuts into August, we might have anticipated a beneficial boost in prices.

However, no such sustained increase is visible.

Why is that? In this conversation, our guest Archie Smith shares more with us on this subject.

For now, let's just say it's a complex puzzle with multiple moving pieces – each one impacting and influenced by the other!

Recap of Q2 Fertilizer Market

The fertilizer market is in a period of transition.

Moving from the bustling spring season to the more laid-back summer fill season, the market has quietened considerably.

Traders are now holding their breath in anticipation of fill programs being announced.

These programs encourage buying, and could potentially lead to a price increase. But there are plenty of macro factors to keep an eye on - natural gas prices, grain market volatility, and geopolitical tensions to name a few.

Taylor Eastman takes a detailed dive into the low hum of the fertilizer market activity.

Splashing some optimism in his commentary, he notes that this spring season proved less volatile than previous ones. Prices seemed to have stabilized after the initial jitters. Looking ahead, Taylor shares his key takeaways for attentive listeners - a good market watcher never sleeps!

The Importance of Fertilizer Options

Risk management is a crucial part of everyday business operations. For businesses operating in the fertilizer supply-chain, price-risk is a daily conundrum.

Enter fertilizer options - a relatively new instrument that allows businesses to navigate through the price turbulence. Listen to the episode to learn more about this interesting new... option!

Timestamped summary of this episode:

00:01:04 - OPEC Cuts and Weak Demand Outlook 00:04:05 - High Sulfur Fuel Oil Market Volatility 00:08:29 - Fertilizer Market Reset and Grain Price Impact 00:09:50 - Recap of Q2 Fertilizer Market 00:15:35 - The Importance of Fertilizer Options 00:18:29 - Challenges in the Chinese Steel Industry 00:21:30 - Panamax and Capesize Rates 00:22:32 - Steel Market Analysis 00:28:17 - Iron Ore Market Update 00:29:27 - Steel Production Cuts in China 00:30:09 - Concerns About the Chinese Economy 00:31:25 - Bleak Outlook for the Property Market 00:31:52 - Surging Steel Exports 00:33:14 - Market Skepticism and Iron Ore Futures