Commodity Tracker: 5 charts to watch this week

The crude tanker market faced challenges in 2024 due to reduced oil exports and OPEC+ cuts, while spot natural gas prices in the US Northeast surged amid cold weather. Additionally, global solar module prices rose from supply constraints, and the Indian shrimp market is pressured by increased output.

1. Crude tanker market faces challenges

What's happening? In 2024, crude tankers experienced a weaker market due to reduced seaborne oil exports and production cuts by OPEC+. Average Time Charter Equivalents for VLCCs and Suezmaxes fell by 14% and 21%, respectively. The rate to transport crude from the Persian Gulf to China averaged $12.70/mt, down 12% year on year. Russia and Iran's exports to Asia have affected demand for compliant vessels.

What's next? The outlook for 2025 suggests potential improvement for compliant tankers as sanctions against non-compliant vessels intensify, possibly increasing demand for sanctioned-free fleets. Global oil demand is expected to rise by 1.3 million b/d in 2025. However, uncertainties remain regarding the potential lifting of US sanctions. The aging global tanker fleet, with 17.4% of vessels over 20 years old, may face renewal challenges, impacting the market dynamics for crude tankers. Crude tanker supply is estimated to grow by 0.8% in 2025 and 3.0% in 2026, offering potential green shoots amid these challenges.

2. Spot natural gas prices spike in US Northeast

What's happening? Spot natural gas prices across the US Northeast surged on Feb. 28 with several locations trading into the double digits ahead of a final blast of wintry weather to start the month of March. At New England gas hubs, prices traded as high as $13.50 while locations farther south in the New York and New Jersey markets stayed closer to $4, according to data from Platts, part of S&P Global Commodity Insights.

What's next? The surge in gas prices, which were already down sharply on March 3, came as temperatures across the region dipped into the 20s Fahrenheit, with some locations even dropping into the teens. Looking beyond early March, weather models are currently predicting milder conditions through mid-March, likely keeping regional gas demand and prices from rallying again this season.

3. Solar module prices rise globally

What's happening? The cost of utility-scale Topcon solar PV modules has risen significantly in China and Europe. As of Feb. 28, Platts assessed the price of these modules at 9.5 cents/W FOB China and 10.7 cents/W DDP Europe, reflecting increases of 0.5 cents/W and 7%, respectively, since the end of January. The rise is in part driven by a new renewable power price settlement mechanism in China and a reduction in production capacity last quarter, which has impacted both domestic and European markets.

What's next? Analysts anticipate a surge in distributed generation (DG) solar installations before China's new pricing mechanism takes effect on June 1. This anticipated rush is expected to further drive up demand and, therefore, prices for solar modules globally. The recent price increases are seen as a return to more sustainable levels after significant losses due to oversupply in previous years.

4. Indian shrimp market faces price pressures

What's happening? The Indian shrimp market is experiencing a bearish trend due to expectations of increased output from the first main crop harvest, scheduled between mid-March and April. Platts prices for peeled, deveined, tail-on shrimp FCA India dropped by $420/mt to $7,274/mt as of March 3. Market participants attribute this decline to recovering supply and weak retail demand from the US and EU. Export offers for value-added shrimp have consistently fallen throughout February, while processors paused fresh procurement due to unviable farmgate prices.

What's next? With increased pond stocking and recovering supply, the shrimp output from the first main crop is expected to surpass 2024 levels. Vannamei seed prices rose early in January due to high demand and limited supply, indicating increased stocking by farmers. However, farmgate prices in Andhra Pradesh have already fallen by at least Rupees 50/kg ($573/mt) month-on-month, and further declines are anticipated as the harvest progresses. Producers and exporters are concerned about low Vannamei shrimp prices due to global oversupply, which has persisted since 2022.

5. California Air Resources Board Amendments disapproved, impacting LCFS credit market

What's happening? California's Office of Administrative Law disapproved the California Air Resources Board's amendments. These amendments could boost the market by tightening supply and increasing demand for credits. The OAL identified 26 clarity issues and two non-substantive procedural errors in its decision. Following the disapproval on Feb. 18, low carbon fuel standard credits fell more than $10 in a single day. Platts assessed LCFS credits at $57/mt on Feb. 28, marking the lowest level since September 2024.

What's next? CARB must address the issues within 120 days. However, the market is experiencing a downturn due to uncertainty surrounding the regulatory changes. Analysts at S&P Global Commodity Insights expect these changes to take effect by mid-2025 or early 2026.

Reporting and analysis from Thomas Washington, J Robinson, Lena Dias Martins, Elvis John, Guadalupe Nunez and Erin Tully.