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, 05 October 15
Q1' 16 CFR SOUTH CHINA COAL SWAP CLOSED US$ 48.05 PER TON
COALspot.com: API 8 CFR South China Coal swap for 4Q’ 2015 delivery down US$ 0.47 (0.96 %) per ton month over month.
A commodity swap is ...
Monday, 05 October 15
SMALL DECLINE IN 2014 SHIP OPERATING COSTS - MOORE STEPHENS
Total annual operating costs in the shipping industry fell by an average of 0.8% in 2014. This compares with the 0.3% average fall in costs recorde ...
Sunday, 04 October 15
THE INDO-INDIA FREIGHT MARKET REMAINS UNDER PRESSURE
COALspot.com: The BDI closed on Friday (2 Oct 2015) at 889 points, down by 54 points compared to previous Friday's closing ( 24 Sept 2015) of 9 ...
Friday, 02 October 15
COAL PRODUCTION IN THE UNITED STATES DECREASED THIS WEEK - EIA
COALspot.com – United States the world’s second largest coal producer has produced approximately totaled an estimated 17.5 million shor ...
Thursday, 01 October 15
SOUTH KOREA'S KOMIPO SEEKS SPOT BITUMINOUS COAL SUPPLIES
COALspot.com: South Korean state-owned utility Korea Midland Power (KOMIPO) issued an new tender for 265,000 Metric Tons (MT) of minimum 4,600 kcal ...
|
|
|
Showing 2786 to 2790 news of total 6871 |
|
 |
|
|
|
|
| |
|
 |
|
|
| |
|
- Directorate Of Revenue Intelligence - India
- Australian Coal Association
- TeaM Sual Corporation - Philippines
- Barasentosa Lestari - Indonesia
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Iligan Light & Power Inc, Philippines
- Chettinad Cement Corporation Ltd - India
- Samtan Co., Ltd - South Korea
- Riau Bara Harum - Indonesia
- Altura Mining Limited, Indonesia
- Kideco Jaya Agung - Indonesia
- Mjunction Services Limited - India
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Karbindo Abesyapradhi - Indoneisa
- International Coal Ventures Pvt Ltd - India
- Central Electricity Authority - India
- Sindya Power Generating Company Private Ltd
- Ind-Barath Power Infra Limited - India
- Wilmar Investment Holdings
- Eastern Coal Council - USA
- Ministry of Mines - Canada
- Meenaskhi Energy Private Limited - India
- PTC India Limited - India
- Rashtriya Ispat Nigam Limited - India
- Rio Tinto Coal - Australia
- Intertek Mineral Services - Indonesia
- Cigading International Bulk Terminal - Indonesia
- Central Java Power - Indonesia
- Karaikal Port Pvt Ltd - India
- Bank of Tokyo Mitsubishi UFJ Ltd
- Bhoruka Overseas - Indonesia
- Asmin Koalindo Tuhup - Indonesia
- European Bulk Services B.V. - Netherlands
- Dalmia Cement Bharat India
- Mercuria Energy - Indonesia
- LBH Netherlands Bv - Netherlands
- Energy Development Corp, Philippines
- Merrill Lynch Commodities Europe
- Bulk Trading Sa - Switzerland
- Bangladesh Power Developement Board
- Formosa Plastics Group - Taiwan
- Power Finance Corporation Ltd., India
- Tamil Nadu electricity Board
- Coalindo Energy - Indonesia
- Lanco Infratech Ltd - India
- Holcim Trading Pte Ltd - Singapore
- Romanian Commodities Exchange
- San Jose City I Power Corp, Philippines
- Makarim & Taira - Indonesia
- Mercator Lines Limited - India
- Jorong Barutama Greston.PT - Indonesia
- Bahari Cakrawala Sebuku - Indonesia
- Globalindo Alam Lestari - Indonesia
- Minerals Council of Australia
- SMC Global Power, Philippines
- Kalimantan Lumbung Energi - Indonesia
- Anglo American - United Kingdom
- London Commodity Brokers - England
- Manunggal Multi Energi - Indonesia
- Indogreen Group - Indonesia
- Sakthi Sugars Limited - India
- Indian Oil Corporation Limited
- Port Waratah Coal Services - Australia
- India Bulls Power Limited - India
- Bukit Baiduri Energy - Indonesia
- Heidelberg Cement - Germany
- South Luzon Thermal Energy Corporation
- Uttam Galva Steels Limited - India
- Offshore Bulk Terminal Pte Ltd, Singapore
- Vijayanagar Sugar Pvt Ltd - India
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Electricity Authority, New Zealand
- Alfred C Toepfer International GmbH - Germany
- Star Paper Mills Limited - India
- Ceylon Electricity Board - Sri Lanka
- Gujarat Mineral Development Corp Ltd - India
- Toyota Tsusho Corporation, Japan
- VISA Power Limited - India
- Miang Besar Coal Terminal - Indonesia
- Krishnapatnam Port Company Ltd. - India
- Edison Trading Spa - Italy
- Wood Mackenzie - Singapore
- Pendopo Energi Batubara - Indonesia
- White Energy Company Limited
- Coal and Oil Company - UAE
- New Zealand Coal & Carbon
- Kumho Petrochemical, South Korea
- Bukit Makmur.PT - Indonesia
- Australian Commodity Traders Exchange
- Thiess Contractors Indonesia
- Simpson Spence & Young - Indonesia
- Jaiprakash Power Ventures ltd
- Indo Tambangraya Megah - Indonesia
- Petron Corporation, Philippines
- Energy Link Ltd, New Zealand
- Kobexindo Tractors - Indoneisa
- Sical Logistics Limited - India
- Jindal Steel & Power Ltd - India
- CIMB Investment Bank - Malaysia
- Vedanta Resources Plc - India
- Latin American Coal - Colombia
- Petrochimia International Co. Ltd.- Taiwan
- The State Trading Corporation of India Ltd
- Georgia Ports Authority, United States
- Kohat Cement Company Ltd. - Pakistan
- Orica Mining Services - Indonesia
- Malabar Cements Ltd - India
- Marubeni Corporation - India
- Chamber of Mines of South Africa
- Sree Jayajothi Cements Limited - India
- Semirara Mining Corp, Philippines
- Oldendorff Carriers - Singapore
- Videocon Industries ltd - India
- Interocean Group of Companies - India
- Independent Power Producers Association of India
- Gujarat Sidhee Cement - India
- Price Waterhouse Coopers - Russia
- Economic Council, Georgia
- Semirara Mining and Power Corporation, Philippines
- ASAPP Information Group - India
- Global Business Power Corporation, Philippines
- ICICI Bank Limited - India
- Sojitz Corporation - Japan
- The Treasury - Australian Government
- Coastal Gujarat Power Limited - India
- Thai Mozambique Logistica
- Standard Chartered Bank - UAE
- Neyveli Lignite Corporation Ltd, - India
- Kepco SPC Power Corporation, Philippines
- Timah Investasi Mineral - Indoneisa
- Gujarat Electricity Regulatory Commission - India
- Binh Thuan Hamico - Vietnam
- Sinarmas Energy and Mining - Indonesia
- Siam City Cement PLC, Thailand
- Renaissance Capital - South Africa
- Straits Asia Resources Limited - Singapore
- Savvy Resources Ltd - HongKong
- CNBM International Corporation - China
- Pipit Mutiara Jaya. PT, Indonesia
- Kaltim Prima Coal - Indonesia
- MS Steel International - UAE
- Therma Luzon, Inc, Philippines
- IHS Mccloskey Coal Group - USA
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Madhucon Powers Ltd - India
- Banpu Public Company Limited - Thailand
- Eastern Energy - Thailand
- Bhushan Steel Limited - India
- Bukit Asam (Persero) Tbk - Indonesia
- McConnell Dowell - Australia
- Orica Australia Pty. Ltd.
- GAC Shipping (India) Pvt Ltd
- Maharashtra Electricity Regulatory Commission - India
- The University of Queensland
- Tata Chemicals Ltd - India
- Electricity Generating Authority of Thailand
- GVK Power & Infra Limited - India
- SMG Consultants - Indonesia
- Directorate General of MIneral and Coal - Indonesia
- Ministry of Finance - Indonesia
- Parliament of New Zealand
- Maheswari Brothers Coal Limited - India
- Billiton Holdings Pty Ltd - Australia
- Singapore Mercantile Exchange
- Salva Resources Pvt Ltd - India
- Kapuas Tunggal Persada - Indonesia
- Global Coal Blending Company Limited - Australia
- Indonesian Coal Mining Association
- Indian Energy Exchange, India
- Aditya Birla Group - India
- AsiaOL BioFuels Corp., Philippines
- Commonwealth Bank - Australia
- OPG Power Generation Pvt Ltd - India
- Asia Pacific Energy Resources Ventures Inc, Philippines
- PNOC Exploration Corporation - Philippines
- Goldman Sachs - Singapore
- Global Green Power PLC Corporation, Philippines
- Parry Sugars Refinery, India
- Trasteel International SA, Italy
- PowerSource Philippines DevCo
- GN Power Mariveles Coal Plant, Philippines
- Ministry of Transport, Egypt
- Africa Commodities Group - South Africa
- Bharathi Cement Corporation - India
- Deloitte Consulting - India
- Bayan Resources Tbk. - Indonesia
- Metalloyd Limited - United Kingdom
- Meralco Power Generation, Philippines
- Sarangani Energy Corporation, Philippines
- Kartika Selabumi Mining - Indonesia
- Leighton Contractors Pty Ltd - Australia
- Larsen & Toubro Limited - India
- Aboitiz Power Corporation - Philippines
- Medco Energi Mining Internasional
- Posco Energy - South Korea
- Agrawal Coal Company - India
- Indika Energy - Indonesia
- PetroVietnam Power Coal Import and Supply Company
- Mintek Dendrill Indonesia
- GMR Energy Limited - India
- Siam City Cement - Thailand
- Baramulti Group, Indonesia
- Borneo Indobara - Indonesia
- Attock Cement Pakistan Limited
- Bhatia International Limited - India
- Carbofer General Trading SA - India
- Vizag Seaport Private Limited - India
- IEA Clean Coal Centre - UK
- Xindia Steels Limited - India
- SN Aboitiz Power Inc, Philippines
- Ambuja Cements Ltd - India
- Grasim Industreis Ltd - India
- Cement Manufacturers Association - India
- TNB Fuel Sdn Bhd - Malaysia
- Essar Steel Hazira Ltd - India
- Antam Resourcindo - Indonesia
- Planning Commission, India
|
| |
| |
|
