Into the Futures: The commodity derivatives podcast brought to you by Freight Investor Services

In this episode:

• Discover the challenges in green ammonia production and how market turbulence affects the shipping industry.

• Investigate the role of Brent Crude Futures Complex prices on international economies.

• Uncover the implications of the OPEC+ meeting and its relation to Iranian oil transportation.

• Delve into long-term iron ore contracts, seaborne coal valuations, and the impact of China's demand.

• Determine the effects of e-commerce on shipping, the last-mile delivery market, and workforce deficits.

The Future of Ammonia Market We talk with Kieran Walsh about the expected impact of green ammonia. The ammonia market is moving toward green ammonia, a more environmentally friendly alternative to traditional grey ammonia. Green ammonia, which is produced using renewable energy through the process of electrolysis, has the potential to significantly reduce environmental impacts associated with grey ammonia, such as methane emissions. However, green ammonia production currently faces several challenges that need to be overcome, including capital investments, infrastructure, and fixed-price supply contracts to attract investors. The market is volatile and uncertain, but there is potential for green ammonia to have a significant impact on seaborne ammonia trade from the middle of next year. During the Freight Up! podcast, Richard Stevenson highlights ammonia's potential in energy transportation, mentioning its convenience in moving energy from one location to another, and its environmental benefits for net energy importers. He also noted the challenges faced by green ammonia, including the need for a fixed price offtake agreement to encourage investment in infrastructure by shipping companies. FIS has the Argus Northwest Europe Futures contract, which allows oil traders to manage risk and create speculative positions in green ammonia.We also talk with Archie Smith, Kerry Deal and Hao Pei.Timestamped summary of this episode: 00:01:11 - The Future of Ammonia Market, Richard Stevenson, Strategic Advisor to FIS, discusses the two buckets of the ammonia market, grey ammonia, and green ammonia, and the barriers to the adoption of green ammonia. 00:08:37 - The State of the Ammonia Market, Kieran Walsh, the ammonia broker, says that decarbonization efforts have made ammonia a key part of energy transition and decarbonization. 00:14:33 - Fuel Oil Market Update, Archie Smith, the fuel oil broker, says that the Brent Crude Futures Complex is still uncertain, but he hopes that the uncertainty will be lifted after the weekend. 00:15:16 - OPEC uncertainty, Archie Smith discusses the upcoming OPEC meeting and the uncertainty surrounding it with Russia hinting at no changes to quotas or production. 00:18:36 - Capes and Panamaxes, Kerry Deal reports on the struggles in the Capes market due to decreasing congestion at Chinese ports and slowing exports from Brazil. 00:23:10 - Ferrous Complex Outlook, Hao Pei shares insights from a shipping conference, including the expectation of a narrower price range for the Ferrous Complex in the second half of 2023.

Fuel Oil Update As the fuel oil market exhibits an absence of clear direction, corporate energy traders who rely on fuel oil may find themselves in a difficult situation. With environmental regulations and external factors at play, volatility is becoming a more common occurrence in the industry. This instability brings forth potential risks that can deeply impact businesses and their bottom lines. As a result, devising a strategic approach will be crucial in maneuvering through this tumultuous market. Archie Smith, during the conversation, mentions that the fuel oil market seems to be lacking apparent direction, with things such as OPEC meetings playing a role in market movements. And just what is the Saudi energy minister suggesting?Steel Update The steel market has also been showing signs of instability, partly due to external factors such as the ongoing US debt ceiling talks and Chinese HRC prices taking a hit. This has compelled European HRC prices to remain under pressure as well. Amid such uncertain market conditions, traders must consider mitigating risks through broader adoption of appropriate hedging techniques. Josh Stern shares an update on the steel market and how the European HRC price is affected by Chinese mills targeting Southeast Asian markets. Timestamped summary of this episode: 00:00:00 - Introduction, Fernanda introduces the episode and the topics of discussion, which include the fuel oil market’s reaction to U.S. debt ceiling discussions and the upcoming OPEC meeting, as well as updates on the steel market. 00:00:44 - Fuel Oil Update, Archie Smith gives an update on the front sing time spreads, which have been well offered and sold down. He also discusses the low sulfur fuel or cracks and states that the market is lacking direction, but the fuel oil market is sensitive to geopolitical topics. Smith mentions that OPEC may step in again and slash production further than before, and the market is waiting for updates on U.S. debt ceiling talks. 00:07:48 - Steel Update, Josh Stern discusses the recent developments in the HRC space, where European HRC prices continue to be under pressure due to Chinese mills targeting the southeast Asian markets. Stern also talks about a study conducted by his team with Platts, which found scrap and rebar to be viable hedging products for wire rod exposure. More research is being done to find correlations between tradable exchange products and physical markets. 00:10:18 - Conclusion, Fernanda wraps up the episode and reminds listeners to check out the website for more information and show notes.

Our guest this episode is Professor Nikos Nomikos, an expert in shipping trade and finance. He has experience in researching freight derivatives and their use in managing freight exposure for shipping companies. In an insight packed 20 minutes on the Freight Up podcast from FIS he notes that charters are more active in the freight derivatives market than ship owners, who primarily focus on managing costs to survive the volatile shipping markets. However, shipping is an industry ripe for investment due to its role in facilitating the vast majority of global trade. So there's a suggestion that institutional investors could benefit from considering one key change to their portfolio. Chapters:00:00:00 Expert In Shipping Finance And Trade: Balancing Academia And Industry Experience00:03:10 Our expert's Journey Towards Freight Derivative Studies.00:06:30 Educating About The Benefits Of Trade Derivatives For Managing Risk And Creating A Balanced Portfolios00:12:35 Institutional Investment In Shipping IndustryKey Takeaways: 1. Shipping is responsible for 92% of global trade, making it a potential opportunity for portfolio diversification.2. Shipping exposure is not a mainstream topic and is not a significant part of institutional investment portfolios.3. The speaker suggests that the paper market may play a more important role in determining the spot freight market in the future, as seen in other commodity markets such as crude oil.

• Uncover the impact of banking sector concerns on the fuel oil market's negativity.
• Learn how to use hedging strategies to combat fuel oil market volatility.
• Get the lowdown on the health of the North Atlantic freight market.
• Find out why stagnation is affecting the Panamax market.

• Crude prices have dipped below $81 per barrel due to the impact of the First Republic Bank run, but the API's weekly oil inventory report has provided some support. Keep an eye on the market for any changes.
• Steel prices have dropped recently, with scrap markets down about 29.5-30 bucks since the start of the month and rebar down 50.
• The fertilizer market is tough right now, with mill margin trades not recommended due to market conditions. However, prices have been on the uptrend lately, and volatility is expected to decrease soon.
• The high sulphur euro crack is currently under supply tightness due to the lack of Russian high sulphur fuel supply post-sanctions. Keep an eye on this market for any changes.
• Buyers of fertilizer expect better prices if they wait it out.

• Uncover the implications of the G7 price cap on the Russian crude oil market.
• Delve into how the recent cyclone in Western Australia influenced freight rates.
• Assess the effect of Brazil's cargo slowdown on C3 freight rates.
• Discover the prowess of China's blast furnace utilization at maximum capacity.
• Explore the potential gains of steel production using scrap metal.
• Follow Freight Up on Apple Podcasts, Spotify, or wherever you get your podcast.
• Email questions, comments, or chat with experts at [email protected].
• Attend the Freight Investor Services Cobalt Congress in Istanbul from May 8th to 11th to discuss battery metals with Kerry Deal and Jack Nathan.
• Connect with our Freight Up guys! Here are the links to Archie Smith, Kerry Deal and Hao Pei

• The Euro scrubber spread's effect on fuel oil market and vessel values.
• Gain insights into the trends and rates of Cape and Panamax shipping markets.
• Recognize the growth of steel market through hot rolled coil as a crucial indicator.
• Acquire knowledge on risk management via derivative contracts for smaller businesses.
• Discover the role of ESG and repercussions of natural disasters on the steel industry.