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Sunday, 11 October 15
TANKER SHIPPING: MORE OPTIMISM IN SIGHT FOR TANKERS IN THE WINTER SEASON - BIMCO
 Demand:
2015 has been the year of the tanker. The fundamental improvements with slow supply-side growth for some years coupled with low oil prices from mid-2014 created strength on both sides. Freight rates started to take off in October 2014 for all types and sizes. The combination of an early start to the fourth-quarter seasonal strength heading into winter and the fact that the oil prices continued to slide became a catalyst.
Throughout 2015, the global refinery throughput has been on a rise. The normal seasonal lower throughput in the first half of the year with widespread maintenance did not occur. Owing to rising and already elevated refinery margins from East to West, refineries simply wanted all the crude oil they could get. This development still provides strong demand and solid freight rates for the tanker industry. In India, we saw a record of 4.74 million barrels per day (mb/d) of crude throughput in June, marking a truly global trend, whereas Middle Eastern refineries also hit a record throughput because of increased runs in Saudi Arabia.
October is traditionally another month of lower throughput as refineries get ready for the winter season when crude runs normally peak. Moreover, the American “Labor Day” on 7 September marks the end of the US driving season which started on Memorial Day, 25 May. This means that the recent 10mb/d production of gasoline will come down.
Some of that weakness may already have caused freight rates to come down sharply, in combination with the global financial uncertainties originating from China. Very large crude Carriers (VLCCs), Suezmax and Aframax have seen freight rates cut in two since mid-June, while Handysize has been the one to drop the most among oil product tankers.
In a rush of excitement, it’s easily forgotten that such high refinery crude runs can only go on for so long, if end consumption supports it. End consumption has supported it some of the way but not all the way. Swollen stocks of crude oil and oil products are now seen everywhere. Preliminary OECD total industry stock change in second-quarter was 1.1mb/d. All stocks but gasoline increased, US crude oil stocks too. In comparison global oil demand dropped by 0.1mb/d over the same period of time and is expected to see an increase of 1.6mb/d to be consumed for the full year over 2014.
Supply:
Contrary to what happens too often, the strong freight markets for oil product tankers have not resulted in a knee-jerk run to the shipyard to order a massive amount of new ships. This stands in opposition to the crude oil tanker orders seen in 2015, as if the lid has come off finally after several years of resisting the temptation.
By end-August 2015, 56 product tankers with a total capacity of 4.8 million DWT, predominantly LR2 (20) and LR1 (21), have been ordered and will be delivered in 2016-17. They are aiming to get a share of the market for longer-haul trades out of Middle East refineries, predominantly into the Western markets. This ordering trend has been on for two years now.
Among the crude oil tanker segments, we have already seen more orders for both Aframax and VLCCs than we did in the whole of 2014. Aframax in particular has been popular with investors this year; after six years with one order a month on average, 2015 has seen 29 new contracts in the first eight months. For the VLCCs, the orders with delivery in particular 2017 (21) and in 2018 (14) have been favoured by investors. In 2015, 50 new VLCC contracts in total have been signed.
One of the launchers which has lifted the freight rates into orbit is two years of very slow fleet growth. Today the fleet holds 648 VLCCs, whereas 628 VLCCs were active by mid-2013. That’s a growth of just 3% in 26 months. Looking forward into the future inflow of crude oil tankers, we can see the delivery pace is picking up and the demolition potential is vanishing with just 14 VLCCs being more than 20 years old and another 16 getting inside the window of the fourth special survey in 2016.
On order for a scheduled delivery during the next 16 months are 71 VLCCs. This means a double-paced inflow as it has taken 34 months for the latest 71 VLCCs to be put into active service.
The change in supply-side conditions will slowly tighten the freight market, and as we look into 2016, the tide could turn fundamentally as a fleet growth of 4.4% is likely to outstrip demand growth. As the coming two years are now “full” in terms of remaining in control of supply-side growth, any additional crude oil tanker orders should be placed for 2018 delivery.
BIMCO forecasts the present and next year supply growth for oil product tankers to be at 5.4% and 5.7% respectively, meaning two “full” years too for that segment.
Outlook:
Looking forward, the winter markets are expected to soften, as the eventual lower refinery crude oil throughput when no more stocks can be filled and margins begin to crumble as demand slips. Until then BIMCO expects earnings for both crude oil and oil product tankers to remain strong. Our expectations are primarily supported by low fleet growth for crude oil tankers and long-haul trades for oil product tankers.
High volatility in freight rates can be expected in the coming half year half a year, when it may also be prudent to look at the time charter market, where one- and three-year time charter rates are both at their highest level since 2009. At USD 48,000 per day and USD 43,500 per day, time charters will make positive returns after all costs inclusive of capital cost and depreciations are deducted.
In the longer run, an eventual repeal of the US crude oil export ban will likely have some impact on the tanker trading lanes. The US congress is set to vote on the issues during this autumn. For the supporters the case is clear: US refineries are saturated with light sweet crude which is produced abundantly. For those in favour of keeping the crude oil export ban still in place there is “national interest”, which currently seems to hold the upper hand. Currently, the only crude oil exports today go to Canada (0.5mb/d).
Moreover, the eventual lifting of international sanctions on Iran is likely to see a steady increase in crude oil, both sweet and sour, into the market over the coming one to three years, depending on much-needed investments to boost production and time to regain market shares. BIMCO expects the re-entry of Iranian crude oil into the market will change trade patterns as other suppliers will be squeezed on their market share. The key will be West African produced sweet crude now going to Europe and East Asia. The latter is the vital one and a stronghold behind the current upturn. The overall impact on the tanker earnings from these changes holds the potential to become both negative and positive.
Source: BIMCO | Hellenic Shipping News
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Sunday, 22 November 15
INDONESIA TO INDIA FREIGHT RATES TO REMAIN DULL NEXT WEEK
COALspot.com: The BDI was down to historical lows closing at 498 points which is down by almost 95.77 per cent compared to 11,800 points in 2008.
...
Sunday, 22 November 15
INDIA COULD PROVIDE SILVER LINING FOR SHIPPING INDUSTRY - NIKOS ROUSSANOGLOU, HELLENIC SHIPPING NEWS
The rise of India as a global player in the shipping market could be just a couple of years away, as the country has the potential to become a seco ...
Friday, 20 November 15
U.S. COAL PRODUCTION FOR THE WEEK ENDING NOVEMBER '14; NO CHANGE FROM LAST WEEK
COALspot.com – United States the world’s second largest coal producer has produced approximately totaled an estimated 16.5 million shor ...
Friday, 20 November 15
NO IMPROVEMENT SEEN IN NEAR-TERM COAL DEMAND; SWAPS CLOSE LOWER
COALspot.com: Indonesian coal swap for delivery Q1 2016 declined month on month and flat on week over week. Price of coal seen no improvements this ...
Friday, 20 November 15
CHANGING CRUDE SUPPLY TRENDS MAY HELP EUROPEAN REFINERS - FITCH RATINGS
COALspot.com: Changes in global oil supply trends, including high Russian production, the expected renewal of Iranian heavy crude exports and the p ...
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Showing 2701 to 2705 news of total 6871 |
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- Kepco SPC Power Corporation, Philippines
- Mercator Lines Limited - India
- Ambuja Cements Ltd - India
- Indika Energy - Indonesia
- Energy Link Ltd, New Zealand
- Miang Besar Coal Terminal - Indonesia
- AsiaOL BioFuels Corp., Philippines
- Baramulti Group, Indonesia
- Videocon Industries ltd - India
- Global Business Power Corporation, Philippines
- Offshore Bulk Terminal Pte Ltd, Singapore
- Siam City Cement PLC, Thailand
- Deloitte Consulting - India
- Kartika Selabumi Mining - Indonesia
- Anglo American - United Kingdom
- Sakthi Sugars Limited - India
- Agrawal Coal Company - India
- Semirara Mining and Power Corporation, Philippines
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- MS Steel International - UAE
- PowerSource Philippines DevCo
- Indian Energy Exchange, India
- Trasteel International SA, Italy
- Barasentosa Lestari - Indonesia
- Cement Manufacturers Association - India
- Aboitiz Power Corporation - Philippines
- CNBM International Corporation - China
- The University of Queensland
- Bhoruka Overseas - Indonesia
- Altura Mining Limited, Indonesia
- Carbofer General Trading SA - India
- Ceylon Electricity Board - Sri Lanka
- Indo Tambangraya Megah - Indonesia
- Heidelberg Cement - Germany
- Interocean Group of Companies - India
- SMC Global Power, Philippines
- Asmin Koalindo Tuhup - Indonesia
- Commonwealth Bank - Australia
- Global Green Power PLC Corporation, Philippines
- Bhushan Steel Limited - India
- Global Coal Blending Company Limited - Australia
- Intertek Mineral Services - Indonesia
- Eastern Energy - Thailand
- Alfred C Toepfer International GmbH - Germany
- Binh Thuan Hamico - Vietnam
- Australian Commodity Traders Exchange
- Maharashtra Electricity Regulatory Commission - India
- Energy Development Corp, Philippines
- Semirara Mining Corp, Philippines
- Xindia Steels Limited - India
- Sarangani Energy Corporation, Philippines
- Wood Mackenzie - Singapore
- Pipit Mutiara Jaya. PT, Indonesia
- Power Finance Corporation Ltd., India
- White Energy Company Limited
- SN Aboitiz Power Inc, Philippines
- Electricity Generating Authority of Thailand
- Billiton Holdings Pty Ltd - Australia
- Latin American Coal - Colombia
- San Jose City I Power Corp, Philippines
- Edison Trading Spa - Italy
- Grasim Industreis Ltd - India
- Electricity Authority, New Zealand
- Indian Oil Corporation Limited
- The State Trading Corporation of India Ltd
- Kobexindo Tractors - Indoneisa
- Ministry of Mines - Canada
- Kohat Cement Company Ltd. - Pakistan
- Oldendorff Carriers - Singapore
- Georgia Ports Authority, United States
- Uttam Galva Steels Limited - India
- Manunggal Multi Energi - Indonesia
- Cigading International Bulk Terminal - Indonesia
- Karbindo Abesyapradhi - Indoneisa
- Port Waratah Coal Services - Australia
- Therma Luzon, Inc, Philippines
- Bangladesh Power Developement Board
- IEA Clean Coal Centre - UK
- Bank of Tokyo Mitsubishi UFJ Ltd
- GVK Power & Infra Limited - India
- Petrochimia International Co. Ltd.- Taiwan
- Rashtriya Ispat Nigam Limited - India
- Kumho Petrochemical, South Korea
- Kideco Jaya Agung - Indonesia
- Bayan Resources Tbk. - Indonesia
- Kaltim Prima Coal - Indonesia
- GMR Energy Limited - India
- CIMB Investment Bank - Malaysia
- Samtan Co., Ltd - South Korea
- Directorate Of Revenue Intelligence - India
- Tamil Nadu electricity Board
- Medco Energi Mining Internasional
- PNOC Exploration Corporation - Philippines
- Bharathi Cement Corporation - India
- Meralco Power Generation, Philippines
- Makarim & Taira - Indonesia
- Lanco Infratech Ltd - India
- Vedanta Resources Plc - India
- Coastal Gujarat Power Limited - India
- London Commodity Brokers - England
- Krishnapatnam Port Company Ltd. - India
- Chettinad Cement Corporation Ltd - India
- Simpson Spence & Young - Indonesia
- Bulk Trading Sa - Switzerland
- Parliament of New Zealand
- Sical Logistics Limited - India
- PTC India Limited - India
- Bhatia International Limited - India
- Bahari Cakrawala Sebuku - Indonesia
- Planning Commission, India
- Price Waterhouse Coopers - Russia
- The Treasury - Australian Government
- Salva Resources Pvt Ltd - India
- Tata Chemicals Ltd - India
- Gujarat Sidhee Cement - India
- Ind-Barath Power Infra Limited - India
- Riau Bara Harum - Indonesia
- Star Paper Mills Limited - India
- Attock Cement Pakistan Limited
- Pendopo Energi Batubara - Indonesia
- Jindal Steel & Power Ltd - India
- Leighton Contractors Pty Ltd - Australia
- Dalmia Cement Bharat India
- International Coal Ventures Pvt Ltd - India
- Mjunction Services Limited - India
- Renaissance Capital - South Africa
- South Luzon Thermal Energy Corporation
- Formosa Plastics Group - Taiwan
- Vijayanagar Sugar Pvt Ltd - India
- Essar Steel Hazira Ltd - India
- Metalloyd Limited - United Kingdom
- Kalimantan Lumbung Energi - Indonesia
- GAC Shipping (India) Pvt Ltd
- TNB Fuel Sdn Bhd - Malaysia
- Indogreen Group - Indonesia
- Ministry of Transport, Egypt
- Orica Mining Services - Indonesia
- Jorong Barutama Greston.PT - Indonesia
- Savvy Resources Ltd - HongKong
- Sojitz Corporation - Japan
- ASAPP Information Group - India
- ICICI Bank Limited - India
- Gujarat Mineral Development Corp Ltd - India
- Orica Australia Pty. Ltd.
- New Zealand Coal & Carbon
- Sree Jayajothi Cements Limited - India
- India Bulls Power Limited - India
- Bukit Baiduri Energy - Indonesia
- Bukit Makmur.PT - Indonesia
- Sinarmas Energy and Mining - Indonesia
- McConnell Dowell - Australia
- Petron Corporation, Philippines
- Banpu Public Company Limited - Thailand
- Meenaskhi Energy Private Limited - India
- Vizag Seaport Private Limited - India
- Maheswari Brothers Coal Limited - India
- Wilmar Investment Holdings
- Independent Power Producers Association of India
- Australian Coal Association
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Africa Commodities Group - South Africa
- PetroVietnam Power Coal Import and Supply Company
- Thiess Contractors Indonesia
- Romanian Commodities Exchange
- Mintek Dendrill Indonesia
- SMG Consultants - Indonesia
- LBH Netherlands Bv - Netherlands
- Merrill Lynch Commodities Europe
- Larsen & Toubro Limited - India
- Globalindo Alam Lestari - Indonesia
- Central Electricity Authority - India
- Ministry of Finance - Indonesia
- Singapore Mercantile Exchange
- Marubeni Corporation - India
- Economic Council, Georgia
- Malabar Cements Ltd - India
- Antam Resourcindo - Indonesia
- Minerals Council of Australia
- Borneo Indobara - Indonesia
- Madhucon Powers Ltd - India
- Karaikal Port Pvt Ltd - India
- Posco Energy - South Korea
- Parry Sugars Refinery, India
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Sindya Power Generating Company Private Ltd
- TeaM Sual Corporation - Philippines
- Goldman Sachs - Singapore
- Standard Chartered Bank - UAE
- Neyveli Lignite Corporation Ltd, - India
- Aditya Birla Group - India
- Gujarat Electricity Regulatory Commission - India
- Jaiprakash Power Ventures ltd
- Rio Tinto Coal - Australia
- OPG Power Generation Pvt Ltd - India
- European Bulk Services B.V. - Netherlands
- Thai Mozambique Logistica
- Eastern Coal Council - USA
- Siam City Cement - Thailand
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Iligan Light & Power Inc, Philippines
- Chamber of Mines of South Africa
- Toyota Tsusho Corporation, Japan
- Coalindo Energy - Indonesia
- Central Java Power - Indonesia
- VISA Power Limited - India
- Indonesian Coal Mining Association
- Straits Asia Resources Limited - Singapore
- Mercuria Energy - Indonesia
- Coal and Oil Company - UAE
- IHS Mccloskey Coal Group - USA
- Directorate General of MIneral and Coal - Indonesia
- Holcim Trading Pte Ltd - Singapore
- Timah Investasi Mineral - Indoneisa
- GN Power Mariveles Coal Plant, Philippines
- Kapuas Tunggal Persada - Indonesia
- Bukit Asam (Persero) Tbk - Indonesia
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