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.
|
|
Sunday, 20 September 15
BALTIC CAPE INDEX ROSE 66.52 PER CENT AND STAND NOW AT 1995 POINTS
COALspot.com: The BDI (Baltic Dry Index) rose 17.35 per cent week over week to 960 points on Friday mainly driven by the Capesize segment. The Cape ...
Friday, 18 September 15
SHIPPING AND THE FED RATE DECISION: FINANCING COSTS COULD RISE EVEN HIGHER - NIKOS ROUSSANOGLOU, HELLENIC SHIPPING NEWS
Regardless of the FED’s decision to raise rates, shipping stands to be influenced by the decision. Shipbroker Allied Shipbroking noted this w ...
Friday, 18 September 15
U.S. COAL PRODUCTION DECLINED 6.7 PER CENT W-W: EIA
COALspot.com – United States the world’s second largest coal producer has produced approximately totaled an estimated 17.4 million shor ...
Thursday, 17 September 15
COALSPOT HAS LAUNCHED NEW THERMAL COAL INDICES FOR INDONESIAN COAL
COALspot.com has today launched real-time CS (i) Coal Indices.
The Indices represents 3800 kcal/kg GAR, 4200 kcal/kg GAR, 5000 kcal/kg GAR a ...
Thursday, 17 September 15
LOW DEMAND PUSH COAL SWAP DOWN
COALspot.com: Indonesian coal swap for delivery 4Q 2015 declined month on month and gain week over week.
The 4Q swap declined $ 1.77 (-4.17%) ...
|
|
|
Showing 2806 to 2810 news of total 6871 |
|
 |
|
|
|
|
| |
|
 |
|
|
| |
|
- Global Green Power PLC Corporation, Philippines
- MS Steel International - UAE
- Bhatia International Limited - India
- Port Waratah Coal Services - Australia
- India Bulls Power Limited - India
- Sakthi Sugars Limited - India
- Antam Resourcindo - Indonesia
- Parry Sugars Refinery, India
- Chamber of Mines of South Africa
- Siam City Cement - Thailand
- Malabar Cements Ltd - India
- Siam City Cement PLC, Thailand
- Straits Asia Resources Limited - Singapore
- New Zealand Coal & Carbon
- Mercator Lines Limited - India
- Salva Resources Pvt Ltd - India
- Leighton Contractors Pty Ltd - Australia
- Directorate Of Revenue Intelligence - India
- Eastern Energy - Thailand
- Renaissance Capital - South Africa
- Larsen & Toubro Limited - India
- The Treasury - Australian Government
- Jindal Steel & Power Ltd - India
- Kobexindo Tractors - Indoneisa
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Semirara Mining and Power Corporation, Philippines
- Power Finance Corporation Ltd., India
- Alfred C Toepfer International GmbH - Germany
- Kohat Cement Company Ltd. - Pakistan
- Videocon Industries ltd - India
- Asmin Koalindo Tuhup - Indonesia
- Vedanta Resources Plc - India
- Coal and Oil Company - UAE
- Indika Energy - Indonesia
- Borneo Indobara - Indonesia
- PowerSource Philippines DevCo
- ASAPP Information Group - India
- Interocean Group of Companies - India
- Ministry of Mines - Canada
- International Coal Ventures Pvt Ltd - India
- Krishnapatnam Port Company Ltd. - India
- South Luzon Thermal Energy Corporation
- Cigading International Bulk Terminal - Indonesia
- Baramulti Group, Indonesia
- Bhushan Steel Limited - India
- Barasentosa Lestari - Indonesia
- ICICI Bank Limited - India
- Global Coal Blending Company Limited - Australia
- Wood Mackenzie - Singapore
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Sarangani Energy Corporation, Philippines
- Indian Energy Exchange, India
- Therma Luzon, Inc, Philippines
- Essar Steel Hazira Ltd - India
- Coalindo Energy - Indonesia
- Sinarmas Energy and Mining - Indonesia
- CIMB Investment Bank - Malaysia
- Jaiprakash Power Ventures ltd
- Chettinad Cement Corporation Ltd - India
- AsiaOL BioFuels Corp., Philippines
- Indonesian Coal Mining Association
- VISA Power Limited - India
- Global Business Power Corporation, Philippines
- Maheswari Brothers Coal Limited - India
- Bukit Baiduri Energy - Indonesia
- Neyveli Lignite Corporation Ltd, - India
- Electricity Generating Authority of Thailand
- Bulk Trading Sa - Switzerland
- Romanian Commodities Exchange
- Toyota Tsusho Corporation, Japan
- Kumho Petrochemical, South Korea
- PTC India Limited - India
- Lanco Infratech Ltd - India
- Vijayanagar Sugar Pvt Ltd - India
- Billiton Holdings Pty Ltd - Australia
- Iligan Light & Power Inc, Philippines
- Central Java Power - Indonesia
- Parliament of New Zealand
- Ministry of Transport, Egypt
- Ind-Barath Power Infra Limited - India
- Commonwealth Bank - Australia
- Ceylon Electricity Board - Sri Lanka
- Agrawal Coal Company - India
- Offshore Bulk Terminal Pte Ltd, Singapore
- Madhucon Powers Ltd - India
- Coastal Gujarat Power Limited - India
- Samtan Co., Ltd - South Korea
- Riau Bara Harum - Indonesia
- Binh Thuan Hamico - Vietnam
- Jorong Barutama Greston.PT - Indonesia
- Rashtriya Ispat Nigam Limited - India
- Indian Oil Corporation Limited
- Aditya Birla Group - India
- Xindia Steels Limited - India
- GN Power Mariveles Coal Plant, Philippines
- Ambuja Cements Ltd - India
- PNOC Exploration Corporation - Philippines
- Merrill Lynch Commodities Europe
- Manunggal Multi Energi - Indonesia
- Banpu Public Company Limited - Thailand
- Kalimantan Lumbung Energi - Indonesia
- Electricity Authority, New Zealand
- Anglo American - United Kingdom
- Savvy Resources Ltd - HongKong
- Petron Corporation, Philippines
- PetroVietnam Power Coal Import and Supply Company
- Bank of Tokyo Mitsubishi UFJ Ltd
- Australian Commodity Traders Exchange
- LBH Netherlands Bv - Netherlands
- Edison Trading Spa - Italy
- Sree Jayajothi Cements Limited - India
- San Jose City I Power Corp, Philippines
- Kepco SPC Power Corporation, Philippines
- Energy Link Ltd, New Zealand
- GVK Power & Infra Limited - India
- Africa Commodities Group - South Africa
- Indogreen Group - Indonesia
- Heidelberg Cement - Germany
- Orica Mining Services - Indonesia
- Tata Chemicals Ltd - India
- The State Trading Corporation of India Ltd
- Latin American Coal - Colombia
- Standard Chartered Bank - UAE
- McConnell Dowell - Australia
- Marubeni Corporation - India
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- IEA Clean Coal Centre - UK
- Gujarat Sidhee Cement - India
- Ministry of Finance - Indonesia
- Uttam Galva Steels Limited - India
- Australian Coal Association
- Makarim & Taira - Indonesia
- Sindya Power Generating Company Private Ltd
- White Energy Company Limited
- Tamil Nadu electricity Board
- Intertek Mineral Services - Indonesia
- Sojitz Corporation - Japan
- Kideco Jaya Agung - Indonesia
- Semirara Mining Corp, Philippines
- Goldman Sachs - Singapore
- TeaM Sual Corporation - Philippines
- Independent Power Producers Association of India
- Minerals Council of Australia
- Planning Commission, India
- Trasteel International SA, Italy
- CNBM International Corporation - China
- Bhoruka Overseas - Indonesia
- Eastern Coal Council - USA
- SMC Global Power, Philippines
- Carbofer General Trading SA - India
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Meenaskhi Energy Private Limited - India
- Formosa Plastics Group - Taiwan
- Gujarat Electricity Regulatory Commission - India
- Georgia Ports Authority, United States
- Wilmar Investment Holdings
- Karaikal Port Pvt Ltd - India
- Dalmia Cement Bharat India
- Pendopo Energi Batubara - Indonesia
- Timah Investasi Mineral - Indoneisa
- Altura Mining Limited, Indonesia
- Mercuria Energy - Indonesia
- Bukit Asam (Persero) Tbk - Indonesia
- Economic Council, Georgia
- Energy Development Corp, Philippines
- OPG Power Generation Pvt Ltd - India
- Thai Mozambique Logistica
- GMR Energy Limited - India
- Rio Tinto Coal - Australia
- Orica Australia Pty. Ltd.
- Singapore Mercantile Exchange
- Deloitte Consulting - India
- Attock Cement Pakistan Limited
- Maharashtra Electricity Regulatory Commission - India
- Sical Logistics Limited - India
- Kartika Selabumi Mining - Indonesia
- Globalindo Alam Lestari - Indonesia
- Bharathi Cement Corporation - India
- Kaltim Prima Coal - Indonesia
- SMG Consultants - Indonesia
- Aboitiz Power Corporation - Philippines
- Kapuas Tunggal Persada - Indonesia
- Holcim Trading Pte Ltd - Singapore
- Cement Manufacturers Association - India
- Simpson Spence & Young - Indonesia
- Mintek Dendrill Indonesia
- GAC Shipping (India) Pvt Ltd
- Thiess Contractors Indonesia
- Bayan Resources Tbk. - Indonesia
- Meralco Power Generation, Philippines
- Price Waterhouse Coopers - Russia
- Medco Energi Mining Internasional
- Gujarat Mineral Development Corp Ltd - India
- Bukit Makmur.PT - Indonesia
- The University of Queensland
- European Bulk Services B.V. - Netherlands
- Petrochimia International Co. Ltd.- Taiwan
- Posco Energy - South Korea
- Miang Besar Coal Terminal - Indonesia
- SN Aboitiz Power Inc, Philippines
- Pipit Mutiara Jaya. PT, Indonesia
- Vizag Seaport Private Limited - India
- Star Paper Mills Limited - India
- Grasim Industreis Ltd - India
- TNB Fuel Sdn Bhd - Malaysia
- Bangladesh Power Developement Board
- IHS Mccloskey Coal Group - USA
- Bahari Cakrawala Sebuku - Indonesia
- Indo Tambangraya Megah - Indonesia
- Central Electricity Authority - India
- Asia Pacific Energy Resources Ventures Inc, Philippines
- London Commodity Brokers - England
- Karbindo Abesyapradhi - Indoneisa
- Directorate General of MIneral and Coal - Indonesia
- Mjunction Services Limited - India
- Oldendorff Carriers - Singapore
- Metalloyd Limited - United Kingdom
|
| |
| |
|
