Proman's Landmark MOU with Mitsubishi: Green Ammonia Plant and Maritime Industry Resilience

Proman has been a prominent player in recent news, garnering attention for their latest milestone – the signing of a Memorandum of Understanding (MOU) with Mitsubishi. This partnership signifies their joint commitment to constructing a low-carbon Ammonia plant in Lake Charles. The primary goal of this collaboration is to produce a substantial 1.2 million tons of Green Ammonia annually. Proman will leverage its expertise in providing essential feedstocks. At the same time, Mitsubishi, with its extensive global presence, will play a pivotal role in facilitating the expansion of this project and fostering the development of cutting-edge technologies.

In addition to this exciting development, the maritime industry has witnessed a notable surge in construction activity, particularly within the Medium Range (MR) sector. Even more noteworthy is the growing interest from traditional Product Tanker owners like UPT. This heightened interest stems from the lessons learned after enduring the adverse effects of supply chain disruptions caused by unpredictable geopolitical events. It has become evident that vessel owners increasingly value flexibility in their operations.

The second-hand market, too, is displaying remarkable resilience, particularly in the small tanker sector, especially within the 13kdwt coated vessel category. Even ships aged 15 years and older are commanding robust prices in the market, with buyers from the Middle East and Southeast Asia displaying a keen appetite for these vessels. Often, these transactions involve long-term relationships between buyers and sellers, and these deals often occur off-market, presenting challenges in developing potential business opportunities.

A consistent stream of chemical tanker newbuilds is coming to the market each month. However, it's worth noting that most of these new vessels are smaller, typically under 10kdwt.

Regarding market freight rates, there is a noticeable improvement, particularly in October, following a sluggish period in the previous months. China continues curling production in specific sectors, particularly affecting the Paraxylene market. This sluggishness is primarily attributed to weak downstream demand and high inventory levels. Demand for polyester materials has declined, with a recovery expected in the fourth quarter. Historically, this period has been marked by strong demand, but the current circumstances have altered this trend.

One significant topic that continues to spark discussions in the industry is the Used Cooking Oil (UCU) market. It's drawing attention due to its potential impact on future feedstock demand for biodiesel fuels. Projections suggest that by 2030, the supply side will be able to provide 30 million tons, effectively doubling the present supply availability of 15 million tons. This growth is attributed to increased Asian supply, primarily driven by enhanced collections in China.

Furthermore, the routes from the US Gulf to Europe have experienced a strengthening of rates due to the limited tonnage available in the region. This dynamic is shaping the maritime industry's landscape and influencing market conditions in the coming months.