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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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Thursday, 29 October 15
Q2' 16 FOB INDONESIA COAL SWAP CLOSED US$ 37.40 PER TON; DECLINED 5.56 PER CENT M-M
COALspot.com: Indonesian coal swap for delivery Q4 2015 declined month on month and week over week.
The Q4 swap declined $ 2.13 (-5.34%) per t ...
Wednesday, 28 October 15
Q2'16 FOB RICHARDS BAY COAL SWAP SEES FURTHER DECLINES
COALspot.com: API4 FOB Richards Bay Coal swap for delivery Q4' 2015 gained week over week and declined month over month.
The Q4 swap was d ...
Wednesday, 28 October 15
BDI INCREASE TOOK PLACE SOLELY ON THE BACK OF CAPESIZE PERFORMANCE, BUT........ - INTERMODAL
COALspot.com: The Dry Bulk market closed off the week noting a small improvement which nonetheless failed to lift sentiment, not only because ...
Tuesday, 27 October 15
Q1'16 API 5 FOB NEWCASTLE COAL SWAP DECLINE 6 PER CENT M-M
COALspot.com: API 5 FOB Newcastle Coal swap for Q4’ 2015 delivery decreased $2 per ton (4.66%) month over month to US$ 40.93 per ton. The swa ...
Monday, 26 October 15
PORT OF NEWCASTLE SHIPPED 10.5 PER CENT LESS COAL IN SEPTEMBER, COMPARED TO AUGUST LOADING
COALspot.com: The Port of Newcastle, Australia’s major trading ports and the world’s largest coal export port, has shipped $1.161 billi ...
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Showing 2746 to 2750 news of total 6871 |
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- Kepco SPC Power Corporation, Philippines
- Bukit Baiduri Energy - Indonesia
- Orica Mining Services - Indonesia
- Tata Chemicals Ltd - India
- Simpson Spence & Young - Indonesia
- Alfred C Toepfer International GmbH - Germany
- Sical Logistics Limited - India
- Indonesian Coal Mining Association
- Directorate General of MIneral and Coal - Indonesia
- Directorate Of Revenue Intelligence - India
- Globalindo Alam Lestari - Indonesia
- Mercuria Energy - Indonesia
- Port Waratah Coal Services - Australia
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Karaikal Port Pvt Ltd - India
- Sarangani Energy Corporation, Philippines
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Bhoruka Overseas - Indonesia
- Orica Australia Pty. Ltd.
- Makarim & Taira - Indonesia
- Maheswari Brothers Coal Limited - India
- Cement Manufacturers Association - India
- Iligan Light & Power Inc, Philippines
- Electricity Generating Authority of Thailand
- SN Aboitiz Power Inc, Philippines
- GMR Energy Limited - India
- Intertek Mineral Services - Indonesia
- McConnell Dowell - Australia
- Salva Resources Pvt Ltd - India
- Meenaskhi Energy Private Limited - India
- Singapore Mercantile Exchange
- Coalindo Energy - Indonesia
- Minerals Council of Australia
- ICICI Bank Limited - India
- Kobexindo Tractors - Indoneisa
- Essar Steel Hazira Ltd - India
- Interocean Group of Companies - India
- Grasim Industreis Ltd - India
- Eastern Coal Council - USA
- Jindal Steel & Power Ltd - India
- Malabar Cements Ltd - India
- Kideco Jaya Agung - Indonesia
- Kapuas Tunggal Persada - Indonesia
- Uttam Galva Steels Limited - India
- Banpu Public Company Limited - Thailand
- Independent Power Producers Association of India
- Parliament of New Zealand
- Leighton Contractors Pty Ltd - Australia
- Dalmia Cement Bharat India
- PetroVietnam Power Coal Import and Supply Company
- Riau Bara Harum - Indonesia
- Ceylon Electricity Board - Sri Lanka
- Antam Resourcindo - Indonesia
- Pipit Mutiara Jaya. PT, Indonesia
- Cigading International Bulk Terminal - Indonesia
- Bahari Cakrawala Sebuku - Indonesia
- Oldendorff Carriers - Singapore
- IEA Clean Coal Centre - UK
- Pendopo Energi Batubara - Indonesia
- Sakthi Sugars Limited - India
- Aditya Birla Group - India
- Romanian Commodities Exchange
- Samtan Co., Ltd - South Korea
- Central Java Power - Indonesia
- CNBM International Corporation - China
- Barasentosa Lestari - Indonesia
- Marubeni Corporation - India
- IHS Mccloskey Coal Group - USA
- Billiton Holdings Pty Ltd - Australia
- Economic Council, Georgia
- Wilmar Investment Holdings
- Vizag Seaport Private Limited - India
- Star Paper Mills Limited - India
- Merrill Lynch Commodities Europe
- Goldman Sachs - Singapore
- Krishnapatnam Port Company Ltd. - India
- Maharashtra Electricity Regulatory Commission - India
- Energy Link Ltd, New Zealand
- Australian Commodity Traders Exchange
- Thiess Contractors Indonesia
- Ind-Barath Power Infra Limited - India
- Aboitiz Power Corporation - Philippines
- TeaM Sual Corporation - Philippines
- International Coal Ventures Pvt Ltd - India
- Timah Investasi Mineral - Indoneisa
- GAC Shipping (India) Pvt Ltd
- Indian Energy Exchange, India
- Carbofer General Trading SA - India
- MS Steel International - UAE
- Ministry of Finance - Indonesia
- VISA Power Limited - India
- GVK Power & Infra Limited - India
- Anglo American - United Kingdom
- Mjunction Services Limited - India
- London Commodity Brokers - England
- Semirara Mining Corp, Philippines
- Meralco Power Generation, Philippines
- Borneo Indobara - Indonesia
- Bank of Tokyo Mitsubishi UFJ Ltd
- Metalloyd Limited - United Kingdom
- Wood Mackenzie - Singapore
- Indika Energy - Indonesia
- Mintek Dendrill Indonesia
- ASAPP Information Group - India
- The State Trading Corporation of India Ltd
- Petrochimia International Co. Ltd.- Taiwan
- Indogreen Group - Indonesia
- Gujarat Sidhee Cement - India
- Energy Development Corp, Philippines
- Holcim Trading Pte Ltd - Singapore
- Attock Cement Pakistan Limited
- Rashtriya Ispat Nigam Limited - India
- Africa Commodities Group - South Africa
- Larsen & Toubro Limited - India
- Posco Energy - South Korea
- LBH Netherlands Bv - Netherlands
- Bangladesh Power Developement Board
- Petron Corporation, Philippines
- Savvy Resources Ltd - HongKong
- Neyveli Lignite Corporation Ltd, - India
- Medco Energi Mining Internasional
- Videocon Industries ltd - India
- Bukit Makmur.PT - Indonesia
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Central Electricity Authority - India
- San Jose City I Power Corp, Philippines
- Australian Coal Association
- Power Finance Corporation Ltd., India
- Electricity Authority, New Zealand
- Commonwealth Bank - Australia
- Therma Luzon, Inc, Philippines
- Ambuja Cements Ltd - India
- Ministry of Mines - Canada
- Formosa Plastics Group - Taiwan
- SMC Global Power, Philippines
- Sree Jayajothi Cements Limited - India
- Miang Besar Coal Terminal - Indonesia
- Bulk Trading Sa - Switzerland
- Coastal Gujarat Power Limited - India
- Kohat Cement Company Ltd. - Pakistan
- PTC India Limited - India
- Global Coal Blending Company Limited - Australia
- Kartika Selabumi Mining - Indonesia
- Baramulti Group, Indonesia
- Chamber of Mines of South Africa
- Heidelberg Cement - Germany
- Lanco Infratech Ltd - India
- Siam City Cement - Thailand
- Deloitte Consulting - India
- Sojitz Corporation - Japan
- PNOC Exploration Corporation - Philippines
- Bhushan Steel Limited - India
- Trasteel International SA, Italy
- New Zealand Coal & Carbon
- Kumho Petrochemical, South Korea
- Bukit Asam (Persero) Tbk - Indonesia
- Edison Trading Spa - Italy
- Global Green Power PLC Corporation, Philippines
- Manunggal Multi Energi - Indonesia
- Asmin Koalindo Tuhup - Indonesia
- Georgia Ports Authority, United States
- Karbindo Abesyapradhi - Indoneisa
- Renaissance Capital - South Africa
- Latin American Coal - Colombia
- Coal and Oil Company - UAE
- Gujarat Mineral Development Corp Ltd - India
- Bharathi Cement Corporation - India
- Altura Mining Limited, Indonesia
- Planning Commission, India
- Chettinad Cement Corporation Ltd - India
- Parry Sugars Refinery, India
- The University of Queensland
- TNB Fuel Sdn Bhd - Malaysia
- Vedanta Resources Plc - India
- Vijayanagar Sugar Pvt Ltd - India
- Agrawal Coal Company - India
- Semirara Mining and Power Corporation, Philippines
- Eastern Energy - Thailand
- Gujarat Electricity Regulatory Commission - India
- Jaiprakash Power Ventures ltd
- Rio Tinto Coal - Australia
- PowerSource Philippines DevCo
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Indian Oil Corporation Limited
- Madhucon Powers Ltd - India
- Ministry of Transport, Egypt
- CIMB Investment Bank - Malaysia
- GN Power Mariveles Coal Plant, Philippines
- Sindya Power Generating Company Private Ltd
- Sinarmas Energy and Mining - Indonesia
- Binh Thuan Hamico - Vietnam
- Kalimantan Lumbung Energi - Indonesia
- Bhatia International Limited - India
- European Bulk Services B.V. - Netherlands
- Global Business Power Corporation, Philippines
- Thai Mozambique Logistica
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- AsiaOL BioFuels Corp., Philippines
- Standard Chartered Bank - UAE
- Toyota Tsusho Corporation, Japan
- South Luzon Thermal Energy Corporation
- The Treasury - Australian Government
- Jorong Barutama Greston.PT - Indonesia
- Bayan Resources Tbk. - Indonesia
- Tamil Nadu electricity Board
- India Bulls Power Limited - India
- White Energy Company Limited
- SMG Consultants - Indonesia
- Mercator Lines Limited - India
- Price Waterhouse Coopers - Russia
- Siam City Cement PLC, Thailand
- Straits Asia Resources Limited - Singapore
- OPG Power Generation Pvt Ltd - India
- Kaltim Prima Coal - Indonesia
- Offshore Bulk Terminal Pte Ltd, Singapore
- Indo Tambangraya Megah - Indonesia
- Xindia Steels Limited - India
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