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.
|
|
Monday, 12 October 15
DRY BULK SHIPPING: MARKETS ARE SLOWLY IMPROVING FROM A VERY LOW LEVEL AS THE DEMAND SIDE FALTERS - HELLENIC SHIPPING NEWS
The dry bulk market is in the midst of a shift in demand patterns, which coupled with a tonnage supply overhang, has been facing headwinds over the ...
Monday, 12 October 15
BDI WEIGHED DOWN BY CAPE
COALspot.com: The BDI (Baltic Dry Index) has come back down again this week. The BDI is a benchmark index used to assess the overall cost of moving ...
Friday, 09 October 15
US WEEKLY COAL OUTPUT UP 1.2 PERCENT TO 17.7 MMST
COALspot.com – United States the world’s second largest coal producer has produced approximately totaled an estimated 17.7 million shor ...
Thursday, 08 October 15
CAPESIZE: MOST PEOPLE AGREE A SPIKE IN RATES WILL HAPPEN; WHEN, HOW LONG AND HOW SUBSTANTIAL? - FEARNLEYS
Cape
Depressives start of the fourth quarter, with c3 approaching USD 12 pmt and c5 presently in the mind 5's. According to Fearnleys ship br ...
Wednesday, 07 October 15
U.S. COAL EXPORTS FOR THE FIRST SEVEN MONTHS DOWN 21 PER CENT COMPARED WITH THE SAME PERIOD IN 2014 - EIA
Coal Supply
Lower U.S.’s domestic coal consumption and reduced exports contribute to a forecast decline of 89 million short tons (M ...
|
|
|
Showing 2776 to 2780 news of total 6871 |
|
 |
|
|
|
|
| |
|
 |
|
|
| |
|
- Timah Investasi Mineral - Indoneisa
- Riau Bara Harum - Indonesia
- Vijayanagar Sugar Pvt Ltd - India
- Heidelberg Cement - Germany
- TeaM Sual Corporation - Philippines
- Renaissance Capital - South Africa
- Formosa Plastics Group - Taiwan
- GN Power Mariveles Coal Plant, Philippines
- Mercator Lines Limited - India
- Kalimantan Lumbung Energi - Indonesia
- Krishnapatnam Port Company Ltd. - India
- Mercuria Energy - Indonesia
- Kobexindo Tractors - Indoneisa
- Medco Energi Mining Internasional
- Ceylon Electricity Board - Sri Lanka
- Eastern Energy - Thailand
- Altura Mining Limited, Indonesia
- Dalmia Cement Bharat India
- Neyveli Lignite Corporation Ltd, - India
- Gujarat Mineral Development Corp Ltd - India
- Indika Energy - Indonesia
- Videocon Industries ltd - India
- San Jose City I Power Corp, Philippines
- Toyota Tsusho Corporation, Japan
- Meenaskhi Energy Private Limited - India
- Offshore Bulk Terminal Pte Ltd, Singapore
- VISA Power Limited - India
- Orica Mining Services - Indonesia
- Intertek Mineral Services - Indonesia
- Africa Commodities Group - South Africa
- Jorong Barutama Greston.PT - Indonesia
- Georgia Ports Authority, United States
- Kepco SPC Power Corporation, Philippines
- McConnell Dowell - Australia
- Kartika Selabumi Mining - Indonesia
- Vedanta Resources Plc - India
- Kaltim Prima Coal - Indonesia
- Semirara Mining Corp, Philippines
- Singapore Mercantile Exchange
- Pipit Mutiara Jaya. PT, Indonesia
- GAC Shipping (India) Pvt Ltd
- Oldendorff Carriers - Singapore
- Straits Asia Resources Limited - Singapore
- Indian Energy Exchange, India
- Merrill Lynch Commodities Europe
- PNOC Exploration Corporation - Philippines
- SN Aboitiz Power Inc, Philippines
- LBH Netherlands Bv - Netherlands
- Kumho Petrochemical, South Korea
- Asmin Koalindo Tuhup - Indonesia
- Makarim & Taira - Indonesia
- Iligan Light & Power Inc, Philippines
- Coastal Gujarat Power Limited - India
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- AsiaOL BioFuels Corp., Philippines
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Port Waratah Coal Services - Australia
- European Bulk Services B.V. - Netherlands
- Ambuja Cements Ltd - India
- Baramulti Group, Indonesia
- Interocean Group of Companies - India
- Rashtriya Ispat Nigam Limited - India
- Cigading International Bulk Terminal - Indonesia
- Bahari Cakrawala Sebuku - Indonesia
- Goldman Sachs - Singapore
- Bangladesh Power Developement Board
- Electricity Generating Authority of Thailand
- Cement Manufacturers Association - India
- Wilmar Investment Holdings
- Romanian Commodities Exchange
- Ind-Barath Power Infra Limited - India
- New Zealand Coal & Carbon
- Standard Chartered Bank - UAE
- Sree Jayajothi Cements Limited - India
- Carbofer General Trading SA - India
- Mintek Dendrill Indonesia
- South Luzon Thermal Energy Corporation
- Vizag Seaport Private Limited - India
- Anglo American - United Kingdom
- PTC India Limited - India
- Gujarat Electricity Regulatory Commission - India
- Jindal Steel & Power Ltd - India
- Gujarat Sidhee Cement - India
- Petrochimia International Co. Ltd.- Taiwan
- Central Electricity Authority - India
- Sindya Power Generating Company Private Ltd
- ICICI Bank Limited - India
- Grasim Industreis Ltd - India
- Essar Steel Hazira Ltd - India
- London Commodity Brokers - England
- Indo Tambangraya Megah - Indonesia
- GMR Energy Limited - India
- Sojitz Corporation - Japan
- Wood Mackenzie - Singapore
- Star Paper Mills Limited - India
- CNBM International Corporation - China
- Kideco Jaya Agung - Indonesia
- MS Steel International - UAE
- Binh Thuan Hamico - Vietnam
- SMC Global Power, Philippines
- Manunggal Multi Energi - Indonesia
- Aboitiz Power Corporation - Philippines
- Central Java Power - Indonesia
- Energy Link Ltd, New Zealand
- Globalindo Alam Lestari - Indonesia
- ASAPP Information Group - India
- Bukit Baiduri Energy - Indonesia
- Maheswari Brothers Coal Limited - India
- Sakthi Sugars Limited - India
- Orica Australia Pty. Ltd.
- Xindia Steels Limited - India
- Lanco Infratech Ltd - India
- Australian Coal Association
- Chamber of Mines of South Africa
- Bukit Makmur.PT - Indonesia
- Siam City Cement - Thailand
- The Treasury - Australian Government
- Global Business Power Corporation, Philippines
- India Bulls Power Limited - India
- Commonwealth Bank - Australia
- Maharashtra Electricity Regulatory Commission - India
- The State Trading Corporation of India Ltd
- Coalindo Energy - Indonesia
- Parliament of New Zealand
- Global Green Power PLC Corporation, Philippines
- Banpu Public Company Limited - Thailand
- Bhushan Steel Limited - India
- Thai Mozambique Logistica
- Bulk Trading Sa - Switzerland
- Antam Resourcindo - Indonesia
- Petron Corporation, Philippines
- Uttam Galva Steels Limited - India
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Deloitte Consulting - India
- Therma Luzon, Inc, Philippines
- Karbindo Abesyapradhi - Indoneisa
- Bank of Tokyo Mitsubishi UFJ Ltd
- Tata Chemicals Ltd - India
- Edison Trading Spa - Italy
- Power Finance Corporation Ltd., India
- Aditya Birla Group - India
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Price Waterhouse Coopers - Russia
- Malabar Cements Ltd - India
- Ministry of Transport, Egypt
- Latin American Coal - Colombia
- Australian Commodity Traders Exchange
- Indogreen Group - Indonesia
- Ministry of Finance - Indonesia
- Attock Cement Pakistan Limited
- Bhatia International Limited - India
- International Coal Ventures Pvt Ltd - India
- Sical Logistics Limited - India
- Indian Oil Corporation Limited
- Parry Sugars Refinery, India
- GVK Power & Infra Limited - India
- Kapuas Tunggal Persada - Indonesia
- Savvy Resources Ltd - HongKong
- Sinarmas Energy and Mining - Indonesia
- Coal and Oil Company - UAE
- Jaiprakash Power Ventures ltd
- Thiess Contractors Indonesia
- Holcim Trading Pte Ltd - Singapore
- Sarangani Energy Corporation, Philippines
- IHS Mccloskey Coal Group - USA
- Minerals Council of Australia
- Larsen & Toubro Limited - India
- Directorate Of Revenue Intelligence - India
- Indonesian Coal Mining Association
- Global Coal Blending Company Limited - Australia
- Tamil Nadu electricity Board
- Alfred C Toepfer International GmbH - Germany
- Miang Besar Coal Terminal - Indonesia
- Simpson Spence & Young - Indonesia
- Economic Council, Georgia
- Bharathi Cement Corporation - India
- Billiton Holdings Pty Ltd - Australia
- TNB Fuel Sdn Bhd - Malaysia
- Salva Resources Pvt Ltd - India
- Posco Energy - South Korea
- Leighton Contractors Pty Ltd - Australia
- Trasteel International SA, Italy
- OPG Power Generation Pvt Ltd - India
- Independent Power Producers Association of India
- Bayan Resources Tbk. - Indonesia
- Metalloyd Limited - United Kingdom
- White Energy Company Limited
- Chettinad Cement Corporation Ltd - India
- IEA Clean Coal Centre - UK
- Ministry of Mines - Canada
- Madhucon Powers Ltd - India
- PetroVietnam Power Coal Import and Supply Company
- The University of Queensland
- Kohat Cement Company Ltd. - Pakistan
- Borneo Indobara - Indonesia
- Marubeni Corporation - India
- Barasentosa Lestari - Indonesia
- PowerSource Philippines DevCo
- Bhoruka Overseas - Indonesia
- Semirara Mining and Power Corporation, Philippines
- Pendopo Energi Batubara - Indonesia
- Directorate General of MIneral and Coal - Indonesia
- Siam City Cement PLC, Thailand
- Karaikal Port Pvt Ltd - India
- Planning Commission, India
- Rio Tinto Coal - Australia
- Samtan Co., Ltd - South Korea
- Meralco Power Generation, Philippines
- Agrawal Coal Company - India
- CIMB Investment Bank - Malaysia
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- SMG Consultants - Indonesia
- Bukit Asam (Persero) Tbk - Indonesia
- Mjunction Services Limited - India
- Electricity Authority, New Zealand
- Eastern Coal Council - USA
- Energy Development Corp, Philippines
|
| |
| |
|
