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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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Tuesday, 17 November 15
FOB NEWCASTLE COAL SWAPS FALL: Q1'16 SLID 11.45% M-M
COALspot.com: API 5 FOB Newcastle Coal swap for Q1’ 2016 delivery slid $4.75 per ton (11.45%) month over month to US$ 36.75 per ton. The swap ...
Monday, 16 November 15
KOMIPO INVITES BIDS FOR 1.295 MILLION TONS OF BITUMINOUS COAL FOR Q1 - Q2'16
COALspot.com: South Korean state-owned utility Korea Midland Power (KOMIPO) issued an new tender for 1,295,000 Metric Tons (MT) of minimum 4,600 kc ...
Monday, 16 November 15
SOUTH CHINA COAL SWAPS DECLINE CONTINUES THIS PAST WEEK
COALspot.com: API 8 CFR South China Coal swap for Q1’ 2016 delivery declined US$ 6.05 (12.59%) per ton month over month.
A commodity swa ...
Monday, 16 November 15
CLARKSEA INDEX COMPETITION: IS IT ALL IN THE TIMING? - CLARKSONS
Readers of the Shipping Intelligence Weekly are invited each year to predict the value of the ClarkSea Index one year ahead in the first week of No ...
Monday, 16 November 15
DRY BULK MARKET: Q1' 2016 SHAPING UP TO BE A ' DISASTROUS' ONE OF PROJECTED LOWER IRON ORE IMPORTS FROM CHINA
Over the course of the past year or so, it’s been the drop of coal imports from China, which has had a detrimental effect on the course of dr ...
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Showing 2711 to 2715 news of total 6871 |
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- Wood Mackenzie - Singapore
- Indian Energy Exchange, India
- Kartika Selabumi Mining - Indonesia
- Grasim Industreis Ltd - India
- Power Finance Corporation Ltd., India
- Central Electricity Authority - India
- Economic Council, Georgia
- Bangladesh Power Developement Board
- Thiess Contractors Indonesia
- Jorong Barutama Greston.PT - Indonesia
- Essar Steel Hazira Ltd - India
- Miang Besar Coal Terminal - Indonesia
- Therma Luzon, Inc, Philippines
- PetroVietnam Power Coal Import and Supply Company
- Meralco Power Generation, Philippines
- Altura Mining Limited, Indonesia
- TNB Fuel Sdn Bhd - Malaysia
- Kumho Petrochemical, South Korea
- Edison Trading Spa - Italy
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Oldendorff Carriers - Singapore
- MS Steel International - UAE
- Marubeni Corporation - India
- Bhoruka Overseas - Indonesia
- White Energy Company Limited
- Savvy Resources Ltd - HongKong
- Merrill Lynch Commodities Europe
- PowerSource Philippines DevCo
- The University of Queensland
- Uttam Galva Steels Limited - India
- Kohat Cement Company Ltd. - Pakistan
- Ambuja Cements Ltd - India
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Globalindo Alam Lestari - Indonesia
- Pipit Mutiara Jaya. PT, Indonesia
- Lanco Infratech Ltd - India
- Indonesian Coal Mining Association
- Africa Commodities Group - South Africa
- Manunggal Multi Energi - Indonesia
- The State Trading Corporation of India Ltd
- Parliament of New Zealand
- Iligan Light & Power Inc, Philippines
- Maharashtra Electricity Regulatory Commission - India
- Coalindo Energy - Indonesia
- Global Coal Blending Company Limited - Australia
- Star Paper Mills Limited - India
- Mintek Dendrill Indonesia
- Maheswari Brothers Coal Limited - India
- Pendopo Energi Batubara - Indonesia
- SMG Consultants - Indonesia
- Videocon Industries ltd - India
- Mjunction Services Limited - India
- Georgia Ports Authority, United States
- Offshore Bulk Terminal Pte Ltd, Singapore
- Indogreen Group - Indonesia
- Tamil Nadu electricity Board
- Alfred C Toepfer International GmbH - Germany
- Australian Coal Association
- McConnell Dowell - Australia
- Directorate Of Revenue Intelligence - India
- Sarangani Energy Corporation, Philippines
- TeaM Sual Corporation - Philippines
- Coastal Gujarat Power Limited - India
- GAC Shipping (India) Pvt Ltd
- Attock Cement Pakistan Limited
- Indian Oil Corporation Limited
- Kaltim Prima Coal - Indonesia
- Parry Sugars Refinery, India
- Sical Logistics Limited - India
- Aditya Birla Group - India
- Ministry of Transport, Egypt
- Straits Asia Resources Limited - Singapore
- Sree Jayajothi Cements Limited - India
- Asmin Koalindo Tuhup - Indonesia
- Karaikal Port Pvt Ltd - India
- South Luzon Thermal Energy Corporation
- Metalloyd Limited - United Kingdom
- Gujarat Sidhee Cement - India
- Anglo American - United Kingdom
- Interocean Group of Companies - India
- Bahari Cakrawala Sebuku - Indonesia
- Eastern Coal Council - USA
- Madhucon Powers Ltd - India
- Semirara Mining and Power Corporation, Philippines
- GMR Energy Limited - India
- Ceylon Electricity Board - Sri Lanka
- Simpson Spence & Young - Indonesia
- Planning Commission, India
- OPG Power Generation Pvt Ltd - India
- Australian Commodity Traders Exchange
- Chamber of Mines of South Africa
- Borneo Indobara - Indonesia
- Barasentosa Lestari - Indonesia
- Samtan Co., Ltd - South Korea
- Gujarat Mineral Development Corp Ltd - India
- SMC Global Power, Philippines
- Petrochimia International Co. Ltd.- Taiwan
- Asia Pacific Energy Resources Ventures Inc, Philippines
- LBH Netherlands Bv - Netherlands
- Baramulti Group, Indonesia
- Orica Mining Services - Indonesia
- CNBM International Corporation - China
- Banpu Public Company Limited - Thailand
- Siam City Cement PLC, Thailand
- Singapore Mercantile Exchange
- Ministry of Finance - Indonesia
- VISA Power Limited - India
- AsiaOL BioFuels Corp., Philippines
- Krishnapatnam Port Company Ltd. - India
- Goldman Sachs - Singapore
- Mercuria Energy - Indonesia
- Rio Tinto Coal - Australia
- Meenaskhi Energy Private Limited - India
- Vedanta Resources Plc - India
- Standard Chartered Bank - UAE
- Toyota Tsusho Corporation, Japan
- Cigading International Bulk Terminal - Indonesia
- ICICI Bank Limited - India
- Rashtriya Ispat Nigam Limited - India
- Bulk Trading Sa - Switzerland
- ASAPP Information Group - India
- Riau Bara Harum - Indonesia
- PTC India Limited - India
- Medco Energi Mining Internasional
- Tata Chemicals Ltd - India
- CIMB Investment Bank - Malaysia
- Global Green Power PLC Corporation, Philippines
- Price Waterhouse Coopers - Russia
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Larsen & Toubro Limited - India
- Carbofer General Trading SA - India
- Wilmar Investment Holdings
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Sinarmas Energy and Mining - Indonesia
- Energy Link Ltd, New Zealand
- Sindya Power Generating Company Private Ltd
- Binh Thuan Hamico - Vietnam
- Independent Power Producers Association of India
- Kalimantan Lumbung Energi - Indonesia
- Timah Investasi Mineral - Indoneisa
- Kobexindo Tractors - Indoneisa
- Bukit Makmur.PT - Indonesia
- Xindia Steels Limited - India
- Kapuas Tunggal Persada - Indonesia
- Ind-Barath Power Infra Limited - India
- Leighton Contractors Pty Ltd - Australia
- European Bulk Services B.V. - Netherlands
- Makarim & Taira - Indonesia
- India Bulls Power Limited - India
- Directorate General of MIneral and Coal - Indonesia
- Aboitiz Power Corporation - Philippines
- Cement Manufacturers Association - India
- Kideco Jaya Agung - Indonesia
- Energy Development Corp, Philippines
- Malabar Cements Ltd - India
- Electricity Authority, New Zealand
- Billiton Holdings Pty Ltd - Australia
- Salva Resources Pvt Ltd - India
- Trasteel International SA, Italy
- SN Aboitiz Power Inc, Philippines
- Central Java Power - Indonesia
- Siam City Cement - Thailand
- Latin American Coal - Colombia
- Electricity Generating Authority of Thailand
- Minerals Council of Australia
- Bukit Asam (Persero) Tbk - Indonesia
- Chettinad Cement Corporation Ltd - India
- Sakthi Sugars Limited - India
- Dalmia Cement Bharat India
- Bukit Baiduri Energy - Indonesia
- Bharathi Cement Corporation - India
- New Zealand Coal & Carbon
- Indika Energy - Indonesia
- Neyveli Lignite Corporation Ltd, - India
- Renaissance Capital - South Africa
- The Treasury - Australian Government
- Indo Tambangraya Megah - Indonesia
- IEA Clean Coal Centre - UK
- Global Business Power Corporation, Philippines
- Port Waratah Coal Services - Australia
- PNOC Exploration Corporation - Philippines
- Gujarat Electricity Regulatory Commission - India
- Bayan Resources Tbk. - Indonesia
- Bank of Tokyo Mitsubishi UFJ Ltd
- Coal and Oil Company - UAE
- Karbindo Abesyapradhi - Indoneisa
- GVK Power & Infra Limited - India
- London Commodity Brokers - England
- Semirara Mining Corp, Philippines
- Sojitz Corporation - Japan
- Petron Corporation, Philippines
- Mercator Lines Limited - India
- Formosa Plastics Group - Taiwan
- Ministry of Mines - Canada
- Eastern Energy - Thailand
- Romanian Commodities Exchange
- San Jose City I Power Corp, Philippines
- Bhatia International Limited - India
- IHS Mccloskey Coal Group - USA
- Kepco SPC Power Corporation, Philippines
- Vijayanagar Sugar Pvt Ltd - India
- International Coal Ventures Pvt Ltd - India
- Bhushan Steel Limited - India
- Jaiprakash Power Ventures ltd
- Commonwealth Bank - Australia
- Orica Australia Pty. Ltd.
- Jindal Steel & Power Ltd - India
- Agrawal Coal Company - India
- Intertek Mineral Services - Indonesia
- Holcim Trading Pte Ltd - Singapore
- Deloitte Consulting - India
- Thai Mozambique Logistica
- GN Power Mariveles Coal Plant, Philippines
- Vizag Seaport Private Limited - India
- Heidelberg Cement - Germany
- Antam Resourcindo - Indonesia
- Posco Energy - South Korea
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