We welcome article submissions from experts in the areas of coal, mining,
shipping, etc.
To Submit your article please click here.
|
|
|
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
If you believe an article violates your rights or the rights of others, please contact us.
|
|
Tuesday, 03 November 15
API 5 FOB NEWCASTLE COAL SWAPS DECLINE CONTINUES
COALspot.com: API 5 FOB Newcastle Coal swap for Q4’ 2015 delivery slid $1.84 per ton (4.34%) month over month to US$ 40.54 per ton. The swap ...
Tuesday, 03 November 15
EU OIL MAJORS FACE FURTHER EARNINGS DECLINE IN Q415 - FITCH RATINGS
The sharp drop in major European oil companies' third-quarter profits is likely to be extended in the fourth quarter as refining margins, which ...
Monday, 02 November 15
DESPITE CHALLENGING MARKET CONDITIONS, ADARO LOWERS COSTS, DEBT AND DELIVERS STRONG FREE CASH FLOW
COALspot.com: Despite challenging market conditions, Adaro lowers costs, lowers debt and delivers strong free cash flow.
The Indonesia’s ...
Monday, 02 November 15
CFR SOUTH CHINA COAL SWAPS CLOSED ON A WEAK NOTE
COALspot.com: API 8 CFR South China Coal swap for 4Q’ 2015 delivery declined US$ 1.81(3.71 %) per ton month over month.
A commodity swap ...
Sunday, 01 November 15
THE FREIGHT MARKET SENTIMENT REMAINS WEAK
This week’s freight market sentiment remains weak compared to last week.
The Baltic Dry Index (BDI), an economic indicator issued daily ...
|
|
|
Showing 2736 to 2740 news of total 6871 |
|
 |
|
|
|
|
| |
|
 |
|
|
| |
|
- CNBM International Corporation - China
- Timah Investasi Mineral - Indoneisa
- Chamber of Mines of South Africa
- Pendopo Energi Batubara - Indonesia
- PowerSource Philippines DevCo
- Offshore Bulk Terminal Pte Ltd, Singapore
- Edison Trading Spa - Italy
- International Coal Ventures Pvt Ltd - India
- Maharashtra Electricity Regulatory Commission - India
- Coastal Gujarat Power Limited - India
- Makarim & Taira - Indonesia
- India Bulls Power Limited - India
- Energy Link Ltd, New Zealand
- Vizag Seaport Private Limited - India
- OPG Power Generation Pvt Ltd - India
- Power Finance Corporation Ltd., India
- Bayan Resources Tbk. - Indonesia
- Banpu Public Company Limited - Thailand
- Orica Mining Services - Indonesia
- Karaikal Port Pvt Ltd - India
- Coalindo Energy - Indonesia
- Kalimantan Lumbung Energi - Indonesia
- Central Java Power - Indonesia
- New Zealand Coal & Carbon
- Savvy Resources Ltd - HongKong
- Medco Energi Mining Internasional
- European Bulk Services B.V. - Netherlands
- Bhoruka Overseas - Indonesia
- Sarangani Energy Corporation, Philippines
- Thiess Contractors Indonesia
- Georgia Ports Authority, United States
- The Treasury - Australian Government
- Australian Commodity Traders Exchange
- Port Waratah Coal Services - Australia
- South Luzon Thermal Energy Corporation
- Ind-Barath Power Infra Limited - India
- Straits Asia Resources Limited - Singapore
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Alfred C Toepfer International GmbH - Germany
- Binh Thuan Hamico - Vietnam
- White Energy Company Limited
- The State Trading Corporation of India Ltd
- Ministry of Mines - Canada
- Chettinad Cement Corporation Ltd - India
- PTC India Limited - India
- Electricity Authority, New Zealand
- Star Paper Mills Limited - India
- Bank of Tokyo Mitsubishi UFJ Ltd
- Sree Jayajothi Cements Limited - India
- Billiton Holdings Pty Ltd - Australia
- Sakthi Sugars Limited - India
- Renaissance Capital - South Africa
- Cigading International Bulk Terminal - Indonesia
- Jorong Barutama Greston.PT - Indonesia
- Merrill Lynch Commodities Europe
- Latin American Coal - Colombia
- Posco Energy - South Korea
- GMR Energy Limited - India
- Asmin Koalindo Tuhup - Indonesia
- Semirara Mining and Power Corporation, Philippines
- Sinarmas Energy and Mining - Indonesia
- Ministry of Finance - Indonesia
- Sical Logistics Limited - India
- Sojitz Corporation - Japan
- Singapore Mercantile Exchange
- Vedanta Resources Plc - India
- Kepco SPC Power Corporation, Philippines
- Bahari Cakrawala Sebuku - Indonesia
- Global Coal Blending Company Limited - Australia
- Kobexindo Tractors - Indoneisa
- AsiaOL BioFuels Corp., Philippines
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Economic Council, Georgia
- PNOC Exploration Corporation - Philippines
- Vijayanagar Sugar Pvt Ltd - India
- VISA Power Limited - India
- SMC Global Power, Philippines
- Bhushan Steel Limited - India
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Kideco Jaya Agung - Indonesia
- Directorate General of MIneral and Coal - Indonesia
- GVK Power & Infra Limited - India
- Jaiprakash Power Ventures ltd
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Meenaskhi Energy Private Limited - India
- Parry Sugars Refinery, India
- Kumho Petrochemical, South Korea
- Ministry of Transport, Egypt
- Gujarat Sidhee Cement - India
- Rashtriya Ispat Nigam Limited - India
- Kaltim Prima Coal - Indonesia
- Therma Luzon, Inc, Philippines
- Sindya Power Generating Company Private Ltd
- Semirara Mining Corp, Philippines
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Xindia Steels Limited - India
- Tata Chemicals Ltd - India
- Borneo Indobara - Indonesia
- Maheswari Brothers Coal Limited - India
- Indika Energy - Indonesia
- Parliament of New Zealand
- Electricity Generating Authority of Thailand
- Manunggal Multi Energi - Indonesia
- Karbindo Abesyapradhi - Indoneisa
- Lanco Infratech Ltd - India
- Eastern Coal Council - USA
- Meralco Power Generation, Philippines
- Aboitiz Power Corporation - Philippines
- Antam Resourcindo - Indonesia
- Trasteel International SA, Italy
- Indogreen Group - Indonesia
- Essar Steel Hazira Ltd - India
- Barasentosa Lestari - Indonesia
- Wilmar Investment Holdings
- Global Business Power Corporation, Philippines
- Tamil Nadu electricity Board
- Eastern Energy - Thailand
- Formosa Plastics Group - Taiwan
- McConnell Dowell - Australia
- Indonesian Coal Mining Association
- Siam City Cement - Thailand
- Metalloyd Limited - United Kingdom
- Bulk Trading Sa - Switzerland
- Mercuria Energy - Indonesia
- Bharathi Cement Corporation - India
- Madhucon Powers Ltd - India
- Intertek Mineral Services - Indonesia
- LBH Netherlands Bv - Netherlands
- Dalmia Cement Bharat India
- SN Aboitiz Power Inc, Philippines
- Global Green Power PLC Corporation, Philippines
- Marubeni Corporation - India
- Indo Tambangraya Megah - Indonesia
- Iligan Light & Power Inc, Philippines
- Africa Commodities Group - South Africa
- SMG Consultants - Indonesia
- TeaM Sual Corporation - Philippines
- Rio Tinto Coal - Australia
- Romanian Commodities Exchange
- ASAPP Information Group - India
- Standard Chartered Bank - UAE
- Orica Australia Pty. Ltd.
- CIMB Investment Bank - Malaysia
- Gujarat Mineral Development Corp Ltd - India
- Mjunction Services Limited - India
- Kapuas Tunggal Persada - Indonesia
- ICICI Bank Limited - India
- Anglo American - United Kingdom
- Australian Coal Association
- Central Electricity Authority - India
- Petrochimia International Co. Ltd.- Taiwan
- GN Power Mariveles Coal Plant, Philippines
- Miang Besar Coal Terminal - Indonesia
- Jindal Steel & Power Ltd - India
- Aditya Birla Group - India
- San Jose City I Power Corp, Philippines
- Ambuja Cements Ltd - India
- Toyota Tsusho Corporation, Japan
- Petron Corporation, Philippines
- Bukit Asam (Persero) Tbk - Indonesia
- Kohat Cement Company Ltd. - Pakistan
- Planning Commission, India
- Leighton Contractors Pty Ltd - Australia
- Salva Resources Pvt Ltd - India
- Indian Energy Exchange, India
- Price Waterhouse Coopers - Russia
- TNB Fuel Sdn Bhd - Malaysia
- Carbofer General Trading SA - India
- Bhatia International Limited - India
- Interocean Group of Companies - India
- Cement Manufacturers Association - India
- Neyveli Lignite Corporation Ltd, - India
- Mercator Lines Limited - India
- Attock Cement Pakistan Limited
- Siam City Cement PLC, Thailand
- Minerals Council of Australia
- The University of Queensland
- Indian Oil Corporation Limited
- MS Steel International - UAE
- IEA Clean Coal Centre - UK
- Heidelberg Cement - Germany
- Videocon Industries ltd - India
- PetroVietnam Power Coal Import and Supply Company
- Krishnapatnam Port Company Ltd. - India
- Samtan Co., Ltd - South Korea
- Riau Bara Harum - Indonesia
- Uttam Galva Steels Limited - India
- Independent Power Producers Association of India
- Bangladesh Power Developement Board
- Energy Development Corp, Philippines
- Oldendorff Carriers - Singapore
- Simpson Spence & Young - Indonesia
- Agrawal Coal Company - India
- Commonwealth Bank - Australia
- Altura Mining Limited, Indonesia
- IHS Mccloskey Coal Group - USA
- Thai Mozambique Logistica
- Wood Mackenzie - Singapore
- Baramulti Group, Indonesia
- Deloitte Consulting - India
- Gujarat Electricity Regulatory Commission - India
- Kartika Selabumi Mining - Indonesia
- Bukit Baiduri Energy - Indonesia
- Coal and Oil Company - UAE
- Grasim Industreis Ltd - India
- Pipit Mutiara Jaya. PT, Indonesia
- Globalindo Alam Lestari - Indonesia
- Directorate Of Revenue Intelligence - India
- Malabar Cements Ltd - India
- London Commodity Brokers - England
- Bukit Makmur.PT - Indonesia
- Larsen & Toubro Limited - India
- Mintek Dendrill Indonesia
- GAC Shipping (India) Pvt Ltd
- Goldman Sachs - Singapore
- Ceylon Electricity Board - Sri Lanka
- Holcim Trading Pte Ltd - Singapore
|
| |
| |
|
