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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, 17 September 15
MARKET INSIGHT - KONSTANTINOS KONTOMICHIS
Having experienced, as it was much anticipated, a poor 1st half combined with negative forecasts, summer, in sharp contrast, proved to be more hope ...
Wednesday, 16 September 15
SLOWER GROWTH IN WORLD COAL DEMAND AND LOWER INTERNATIONAL COAL PRICES LED A DECLINE IN INDONESIAN COAL PRODUCTION
COALspot.com: Slower growth in world coal demand particularly China and lower international coal prices have led to a decline in Indonesian coal pr ...
Wednesday, 16 September 15
HIGHER TAXES COULD LEAD GREEK SHIP OWNERS OUT OF THE COUNTRY - NIKOS ROUSSANOGLOU, HELLENIC SHIPPING NEWS
A potential taxation overhaul of the shipping industry in Hellas, which could see the loss of particular tax benefits for ship owners, could lead t ...
Tuesday, 15 September 15
WORLD SEABORNE TRADE: ENTERING INTO A ROLE REVERSAL? - CLARKSONS
Over the past decade, world seaborne trade growth has been dominated by dry bulk and container trade. However, developments in the global economy t ...
Tuesday, 15 September 15
Q2'16 RICHARDS BAY COAL SWAPS DIP TO $ 51.10 PER TON
COALspot.com: API4 FOB Richards Bay Coal swap for delivery 4Q' 2015 declined week over week and month over month.
The 4Q swap was down US$ ...
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Showing 2811 to 2815 news of total 6871 |
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- Energy Link Ltd, New Zealand
- Savvy Resources Ltd - HongKong
- GVK Power & Infra Limited - India
- PTC India Limited - India
- Antam Resourcindo - Indonesia
- Malabar Cements Ltd - India
- Kalimantan Lumbung Energi - Indonesia
- PowerSource Philippines DevCo
- Renaissance Capital - South Africa
- Wilmar Investment Holdings
- Vizag Seaport Private Limited - India
- Meenaskhi Energy Private Limited - India
- Independent Power Producers Association of India
- Romanian Commodities Exchange
- Pipit Mutiara Jaya. PT, Indonesia
- Borneo Indobara - Indonesia
- Larsen & Toubro Limited - India
- Sarangani Energy Corporation, Philippines
- Medco Energi Mining Internasional
- Bhoruka Overseas - Indonesia
- Semirara Mining and Power Corporation, Philippines
- Straits Asia Resources Limited - Singapore
- Deloitte Consulting - India
- Electricity Authority, New Zealand
- Jorong Barutama Greston.PT - Indonesia
- Indogreen Group - Indonesia
- Karbindo Abesyapradhi - Indoneisa
- Posco Energy - South Korea
- New Zealand Coal & Carbon
- Interocean Group of Companies - India
- IEA Clean Coal Centre - UK
- Thiess Contractors Indonesia
- Timah Investasi Mineral - Indoneisa
- Indian Energy Exchange, India
- CNBM International Corporation - China
- Trasteel International SA, Italy
- Mercuria Energy - Indonesia
- Parliament of New Zealand
- Edison Trading Spa - Italy
- Sinarmas Energy and Mining - Indonesia
- Singapore Mercantile Exchange
- The State Trading Corporation of India Ltd
- McConnell Dowell - Australia
- Planning Commission, India
- Holcim Trading Pte Ltd - Singapore
- Banpu Public Company Limited - Thailand
- Vedanta Resources Plc - India
- Orica Mining Services - Indonesia
- AsiaOL BioFuels Corp., Philippines
- Kartika Selabumi Mining - Indonesia
- Chettinad Cement Corporation Ltd - India
- Parry Sugars Refinery, India
- Sindya Power Generating Company Private Ltd
- Cigading International Bulk Terminal - Indonesia
- Bukit Baiduri Energy - Indonesia
- Oldendorff Carriers - Singapore
- Coastal Gujarat Power Limited - India
- Wood Mackenzie - Singapore
- Central Electricity Authority - India
- San Jose City I Power Corp, Philippines
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Petrochimia International Co. Ltd.- Taiwan
- SMC Global Power, Philippines
- Iligan Light & Power Inc, Philippines
- SMG Consultants - Indonesia
- TNB Fuel Sdn Bhd - Malaysia
- Mercator Lines Limited - India
- The University of Queensland
- GN Power Mariveles Coal Plant, Philippines
- Star Paper Mills Limited - India
- Xindia Steels Limited - India
- Globalindo Alam Lestari - Indonesia
- Electricity Generating Authority of Thailand
- Toyota Tsusho Corporation, Japan
- Meralco Power Generation, Philippines
- Bhushan Steel Limited - India
- Lanco Infratech Ltd - India
- Uttam Galva Steels Limited - India
- SN Aboitiz Power Inc, Philippines
- Bahari Cakrawala Sebuku - Indonesia
- Thai Mozambique Logistica
- Eastern Coal Council - USA
- Agrawal Coal Company - India
- Offshore Bulk Terminal Pte Ltd, Singapore
- Africa Commodities Group - South Africa
- Georgia Ports Authority, United States
- PNOC Exploration Corporation - Philippines
- LBH Netherlands Bv - Netherlands
- Ministry of Transport, Egypt
- Economic Council, Georgia
- PetroVietnam Power Coal Import and Supply Company
- Chamber of Mines of South Africa
- GMR Energy Limited - India
- ICICI Bank Limited - India
- The Treasury - Australian Government
- Tamil Nadu electricity Board
- London Commodity Brokers - England
- Price Waterhouse Coopers - Russia
- Gujarat Electricity Regulatory Commission - India
- Semirara Mining Corp, Philippines
- Attock Cement Pakistan Limited
- CIMB Investment Bank - Malaysia
- Samtan Co., Ltd - South Korea
- Jindal Steel & Power Ltd - India
- Krishnapatnam Port Company Ltd. - India
- Pendopo Energi Batubara - Indonesia
- International Coal Ventures Pvt Ltd - India
- Karaikal Port Pvt Ltd - India
- Bulk Trading Sa - Switzerland
- Binh Thuan Hamico - Vietnam
- Grasim Industreis Ltd - India
- Bharathi Cement Corporation - India
- Aboitiz Power Corporation - Philippines
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Central Java Power - Indonesia
- Mintek Dendrill Indonesia
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Bukit Asam (Persero) Tbk - Indonesia
- Indo Tambangraya Megah - Indonesia
- Global Coal Blending Company Limited - Australia
- Australian Commodity Traders Exchange
- Altura Mining Limited, Indonesia
- Global Green Power PLC Corporation, Philippines
- Ind-Barath Power Infra Limited - India
- Coal and Oil Company - UAE
- Therma Luzon, Inc, Philippines
- Bukit Makmur.PT - Indonesia
- Kohat Cement Company Ltd. - Pakistan
- Kideco Jaya Agung - Indonesia
- Asmin Koalindo Tuhup - Indonesia
- Coalindo Energy - Indonesia
- Anglo American - United Kingdom
- Goldman Sachs - Singapore
- Manunggal Multi Energi - Indonesia
- Kepco SPC Power Corporation, Philippines
- Jaiprakash Power Ventures ltd
- Mjunction Services Limited - India
- Ministry of Finance - Indonesia
- Bangladesh Power Developement Board
- Gujarat Mineral Development Corp Ltd - India
- South Luzon Thermal Energy Corporation
- Billiton Holdings Pty Ltd - Australia
- Kumho Petrochemical, South Korea
- Kobexindo Tractors - Indoneisa
- ASAPP Information Group - India
- Eastern Energy - Thailand
- Minerals Council of Australia
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- IHS Mccloskey Coal Group - USA
- Essar Steel Hazira Ltd - India
- Maharashtra Electricity Regulatory Commission - India
- Bayan Resources Tbk. - Indonesia
- Indika Energy - Indonesia
- Gujarat Sidhee Cement - India
- Bhatia International Limited - India
- OPG Power Generation Pvt Ltd - India
- Port Waratah Coal Services - Australia
- Leighton Contractors Pty Ltd - Australia
- Petron Corporation, Philippines
- Ambuja Cements Ltd - India
- Rio Tinto Coal - Australia
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Directorate General of MIneral and Coal - Indonesia
- Australian Coal Association
- Metalloyd Limited - United Kingdom
- Kapuas Tunggal Persada - Indonesia
- Carbofer General Trading SA - India
- Cement Manufacturers Association - India
- Kaltim Prima Coal - Indonesia
- Riau Bara Harum - Indonesia
- Commonwealth Bank - Australia
- Maheswari Brothers Coal Limited - India
- Directorate Of Revenue Intelligence - India
- MS Steel International - UAE
- Simpson Spence & Young - Indonesia
- Sree Jayajothi Cements Limited - India
- Standard Chartered Bank - UAE
- Power Finance Corporation Ltd., India
- Formosa Plastics Group - Taiwan
- Aditya Birla Group - India
- Barasentosa Lestari - Indonesia
- Global Business Power Corporation, Philippines
- Madhucon Powers Ltd - India
- India Bulls Power Limited - India
- Merrill Lynch Commodities Europe
- Makarim & Taira - Indonesia
- Tata Chemicals Ltd - India
- Baramulti Group, Indonesia
- Vijayanagar Sugar Pvt Ltd - India
- White Energy Company Limited
- Videocon Industries ltd - India
- Energy Development Corp, Philippines
- Sical Logistics Limited - India
- Sojitz Corporation - Japan
- TeaM Sual Corporation - Philippines
- Intertek Mineral Services - Indonesia
- Indonesian Coal Mining Association
- Latin American Coal - Colombia
- Sakthi Sugars Limited - India
- Bank of Tokyo Mitsubishi UFJ Ltd
- Siam City Cement - Thailand
- Miang Besar Coal Terminal - Indonesia
- Indian Oil Corporation Limited
- Orica Australia Pty. Ltd.
- Ceylon Electricity Board - Sri Lanka
- Ministry of Mines - Canada
- Dalmia Cement Bharat India
- GAC Shipping (India) Pvt Ltd
- VISA Power Limited - India
- Heidelberg Cement - Germany
- European Bulk Services B.V. - Netherlands
- Marubeni Corporation - India
- Rashtriya Ispat Nigam Limited - India
- Neyveli Lignite Corporation Ltd, - India
- Alfred C Toepfer International GmbH - Germany
- Siam City Cement PLC, Thailand
- Salva Resources Pvt Ltd - India
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