Datasets Used: Map (terminal only)/ Dashboard (terminal only) / Flows (incl. STS) / Trades /Buyer split /Installation split/Insight Cross Commo Monthly

Problem: A power market analyst who covers South America is looking into the surge in power generation in Brazil in 2023 and aiming to understand if this trend will continue throughout 2024, or if that trend will change. They are able to look across Brazil’s official data from the previous year to understand which modalities Brazilian power was generated through, but they need to develop expectations between renewables and traditional thermal feedstocks like coal and LNG for 2024 in order to position their trading strategy.

The Solution: In 2023, Brazilian power was overwhelmingly generated through renewable sources like hydropower, wind, and solar. Given this reality, the demand for thermal feedstocks was depressed, which the analyst is able visualize the 2022 - 2023 drop off across both coal and LNG with the new cross commodity platform. This trend however can already be seen to be shifting as we reach the middle of Q2 2024. Through official statistics, the trader notes that weather has been hotter this year so far and that wind generation is down 1,317 GWh through the beginning of 2024 compared to 2023. These factors would imply that in 2024, Brazilian power generation will already need to come more from thermal feedstocks than in all of 2023. The trader is able to validate this thesis by looking into imports so far in 2024, and go into more detail by investigating the installations where those cargo arrive, in order to understand the nature of those facilities, potential storage, as well as any factors related to congestion - for instance here the trader notes a significant increase in congestion at Pecém in March 2024 - one of the most modern ports in Brazil with both dry and liquid bulk terminals, notable if the trader wants to find buyers there. With Kpler’s capacity to showcase the commercial aspect of the flow, the trader is able to note a variety of buyers through 2024 already in order to position among his competitive set. By looking at real-time thermal feedstock data, the trader is able to capitalise on the growing destination demand in Brazil and see their margins grow.

Datasets Used: Map (terminal only)/ Dashboard (terminal only) / Flows (incl. STS) / Trades/Grade split

Problem: An EU regional renewables analyst is aiming to understand a supply and demand for both vegetable oils and biofuels within the region, specifically within Germany and looking at the trades of ADM (Archer Daniels Midland) Facilities, one of the largest agribusiness companies globally that this trader competes with. They want to understand how to position their trades and if they should expect demand for ADM facilities to rise and for what products.

Solution: The trader begins by using Kpler to look specifically into where oilseed imports have been coming from into the EU by splitting EU Oilseed imports by their destination installations - to see where that destination demand is falling and from where. The trader can immediately notice two ADM facilities receiving a decent share of the overall imports. The trader then aims to visualize these oilseed flows specifically into those installations in order to look into the recent trades and then look at the larger picture of all imports to these facilities by product, the trader notes that corn imports have also ticked up in the first quarter of 2024, signalling some feedstock shifts for the facilities biodiesel production. Indeed, when the trader then begin to look at exports from those same facilities they notice that in the recent quarter the exports have been mainly biofuels, and with Kpler the trader is able to see the detail of whether they are FAME, SME, or RME specifically - FAME for example is typically made with soybean, but can also be produced with corn oil - perhaps deriving from that shift in feedstock in March 2024 viewed when visualizing imports. As the trader continues to follow the flow, and looks into destination installations from those facilities not just the products - they notice that most biofuel exports are arriving in the United States at installations that either contain storage or could potentially move them along to a downstream consumer. With the capacity to monitor and analyze oilseeds, vegoils, and biofuels all in the same platform the trader is able to analyze the current growing oilseed destination demand trend within ADM European facilities and observe installation exports to understand how ADM Europe is competing within the biofuel trade, they are able to successfully navigate an uncertain biofuels market with an understanding of the value chain that they can navigate prices that seem to have firmed in April 2024 moving into May 2024 against a backdrop of uncertain supply in Northwest Europe.

Datasets Used: Map (terminal only)/ Dashboard (terminal only) / Flows (incl. STS) / Trades /Inventories /Grade split /Quality split/Insight Refined Product Monthly

Problem: A global NGLs analyst is looking into petrochemical demand and needs to evaluate the relationship between LPG and naphtha. In petrochemical applications, while naphtha can be cracked to produce lighter hydrocarbons and olefins, LPG can also be used directly as an alternative feedstock in steam crackers when naphtha prices are high or supply is constrained. In this context, LPG and naphtha are sometimes interchangeable as feedstocks based on economic and operational considerations and in this case, the trader wants to evaluate how demand for LPG will turn in light of weakening naphtha cracks which are reducing the incentive for producers to make naphtha over other products.

Solution: The trader is able to view both LPG and naphtha, two alternatives for the same feedstock, simultaneously in the new Kpler terminal. This allows the trader to evaluate how demand for naphtha and LPG will change in light of weakening petrochemical consumption, where LPG can be used as an alternative feedstock for petrochemical production. The trader is aware that a recent closing of Sabic’s Olefin No. 3 inflexible naphtha-fed steam cracker in the Netherlands will significantly reduce demand in northwest Europe and should end up shifting some of the feedstock demand to LPG. With cracking margins for naphtha depressed in NWE, refiners have turned away and subsequent chemical resupplies also weren’t able to come quickly as chemical shipments have significantly reduced from the Suez Canal, instead opting for the Red Sea. This will likely drive the market toward LPG in NWE and this can already be felt slightly with predicted LPG arrivals surpassing naphtha arrivals in May. Within Asia, the trader is able to use Kpler’s refineries intelligence in order to analyze the impact of of planned and unplanned maintenance of mostly naphtha fed crackers in the region. This suggests that petchem demand will be somewhat depressed until these crackers return, and opens a window again for LPG to supplant naphtha.

Looking into LPG itself, the trader notices a potential arbitrage window opening from the U.S. to Europe and China, given the petchem demand situation and looks to validate this opportunity with Kpler data. The U.S. is experiencing a significant surplus in LPG and is by far the largest exporter in the world. This imbalance in oversupply in the United States, weakening demand for naphtha as a chemical feedstock for petrochemicals in Europe and Asia, and LPG’s capacity to fill that in is likely to create significant profits for those shipping LPG to from the US to Europe and Asia. A stabilization in NWE and East Asian benchmark propane prices has also helped ensure the arb remains workable with LPG being favoured over naphtha at flexible feed crackers. The trader also aims to look specifically into China, as the largest Asian importer, with the knowledge that PDH plants in China are returning from maintenance as well (they can refine propane into propylene, a petrochemical) this will keep this specific arbitrage opportunity open throughout the summer. This can already be seen with rising propane exports to China. With a full evaluation of the petrochemical feedstock market between naphtha and LPG, the trader is able to enjoy a fruitful trading strategy into the second half of 2024.