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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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Tuesday, 15 September 15
API 5 FOB NEWCASTLE COAL SWAP FOR 4Q' 2015 DELIVERY CLOSED AT $42.71 PER TON ON 11 SEPT, SGX DATA SHOWS
COALspot.com: API 5 FOB Newcastle Coal swap for 4Q’ 2015 delivery declined $0.94 per MT (-2.15%) month over month to US$ 42.71 per mt. The sw ...
Monday, 14 September 15
Q1'16 CFR SOUTH CHINA COAL SWAP DECLINED $1.80 PMT M-M
COALspot.com: API 8 CFR South China Coal swap for 4Q’ 2015 delivery declined just US$ 1.62 (3.21 %) per MT month over month.
A commodity ...
Monday, 14 September 15
MOODY'S LOWERS COMMODITY PRICE ASSUMPTIONS ON MACRO, INDUSTRY FACTORS
COALspot.com: Moody's Investors Service has lowered its base metal price assumptions for 2015-17 as slowing growth in China, lower oil prices, ...
Sunday, 13 September 15
FREIGHT RATES ARE EXPECTED TO BE SOFT NEXT WEEK
COALspot.com: The BDI decreased further by 6.51 per cent or 57 points since last Friday and closed at 818 on 11 September 2015 while the cape index ...
Friday, 11 September 15
SHIPPING MARKETS SHOW MIXED EMOTIONS - NIKOS ROUSSANOGLOU, HELLENIC SHIPPING NEWS
The dry bulk market has managed to show marginal improvements over the past few days, with the Capesize segment faring better than smaller dry bulk ...
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Showing 2816 to 2820 news of total 6871 |
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- Vedanta Resources Plc - India
- TNB Fuel Sdn Bhd - Malaysia
- Bukit Makmur.PT - Indonesia
- Billiton Holdings Pty Ltd - Australia
- AsiaOL BioFuels Corp., Philippines
- Ceylon Electricity Board - Sri Lanka
- White Energy Company Limited
- Agrawal Coal Company - India
- Riau Bara Harum - Indonesia
- Meralco Power Generation, Philippines
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Miang Besar Coal Terminal - Indonesia
- Neyveli Lignite Corporation Ltd, - India
- Ambuja Cements Ltd - India
- Alfred C Toepfer International GmbH - Germany
- Globalindo Alam Lestari - Indonesia
- India Bulls Power Limited - India
- Attock Cement Pakistan Limited
- MS Steel International - UAE
- Parliament of New Zealand
- Coastal Gujarat Power Limited - India
- Grasim Industreis Ltd - India
- Australian Coal Association
- Gujarat Mineral Development Corp Ltd - India
- CNBM International Corporation - China
- Krishnapatnam Port Company Ltd. - India
- Energy Link Ltd, New Zealand
- Rio Tinto Coal - Australia
- Formosa Plastics Group - Taiwan
- Madhucon Powers Ltd - India
- Sarangani Energy Corporation, Philippines
- Samtan Co., Ltd - South Korea
- Goldman Sachs - Singapore
- Maharashtra Electricity Regulatory Commission - India
- Kapuas Tunggal Persada - Indonesia
- South Luzon Thermal Energy Corporation
- Standard Chartered Bank - UAE
- PTC India Limited - India
- New Zealand Coal & Carbon
- Chettinad Cement Corporation Ltd - India
- Indo Tambangraya Megah - Indonesia
- Port Waratah Coal Services - Australia
- Anglo American - United Kingdom
- Straits Asia Resources Limited - Singapore
- Pendopo Energi Batubara - Indonesia
- Barasentosa Lestari - Indonesia
- OPG Power Generation Pvt Ltd - India
- Indogreen Group - Indonesia
- Borneo Indobara - Indonesia
- Manunggal Multi Energi - Indonesia
- Indian Oil Corporation Limited
- Gujarat Sidhee Cement - India
- Tata Chemicals Ltd - India
- Therma Luzon, Inc, Philippines
- Deloitte Consulting - India
- The State Trading Corporation of India Ltd
- SMG Consultants - Indonesia
- Thai Mozambique Logistica
- Ministry of Mines - Canada
- Cigading International Bulk Terminal - Indonesia
- Pipit Mutiara Jaya. PT, Indonesia
- Trasteel International SA, Italy
- ASAPP Information Group - India
- Antam Resourcindo - Indonesia
- Planning Commission, India
- Georgia Ports Authority, United States
- Aboitiz Power Corporation - Philippines
- Salva Resources Pvt Ltd - India
- Merrill Lynch Commodities Europe
- Electricity Authority, New Zealand
- Ministry of Transport, Egypt
- Holcim Trading Pte Ltd - Singapore
- GN Power Mariveles Coal Plant, Philippines
- Leighton Contractors Pty Ltd - Australia
- Central Java Power - Indonesia
- Kideco Jaya Agung - Indonesia
- Australian Commodity Traders Exchange
- Coal and Oil Company - UAE
- Price Waterhouse Coopers - Russia
- LBH Netherlands Bv - Netherlands
- Essar Steel Hazira Ltd - India
- Siam City Cement PLC, Thailand
- Indika Energy - Indonesia
- Indonesian Coal Mining Association
- Bahari Cakrawala Sebuku - Indonesia
- Africa Commodities Group - South Africa
- Sojitz Corporation - Japan
- Posco Energy - South Korea
- Romanian Commodities Exchange
- SMC Global Power, Philippines
- Kaltim Prima Coal - Indonesia
- Singapore Mercantile Exchange
- Bharathi Cement Corporation - India
- Kumho Petrochemical, South Korea
- Meenaskhi Energy Private Limited - India
- GMR Energy Limited - India
- Thiess Contractors Indonesia
- Chamber of Mines of South Africa
- Medco Energi Mining Internasional
- Offshore Bulk Terminal Pte Ltd, Singapore
- Iligan Light & Power Inc, Philippines
- The Treasury - Australian Government
- Central Electricity Authority - India
- Timah Investasi Mineral - Indoneisa
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Power Finance Corporation Ltd., India
- Bulk Trading Sa - Switzerland
- Uttam Galva Steels Limited - India
- Bayan Resources Tbk. - Indonesia
- Tamil Nadu electricity Board
- Larsen & Toubro Limited - India
- Karbindo Abesyapradhi - Indoneisa
- Global Business Power Corporation, Philippines
- Commonwealth Bank - Australia
- Cement Manufacturers Association - India
- Semirara Mining Corp, Philippines
- Carbofer General Trading SA - India
- Orica Australia Pty. Ltd.
- Electricity Generating Authority of Thailand
- Indian Energy Exchange, India
- Bhushan Steel Limited - India
- PNOC Exploration Corporation - Philippines
- Bukit Asam (Persero) Tbk - Indonesia
- Global Coal Blending Company Limited - Australia
- Dalmia Cement Bharat India
- Edison Trading Spa - Italy
- London Commodity Brokers - England
- Sindya Power Generating Company Private Ltd
- Bangladesh Power Developement Board
- GVK Power & Infra Limited - India
- Videocon Industries ltd - India
- Karaikal Port Pvt Ltd - India
- TeaM Sual Corporation - Philippines
- Aditya Birla Group - India
- Kepco SPC Power Corporation, Philippines
- Sakthi Sugars Limited - India
- Bukit Baiduri Energy - Indonesia
- Kalimantan Lumbung Energi - Indonesia
- Coalindo Energy - Indonesia
- Mercator Lines Limited - India
- Malabar Cements Ltd - India
- PetroVietnam Power Coal Import and Supply Company
- PowerSource Philippines DevCo
- Marubeni Corporation - India
- Parry Sugars Refinery, India
- Savvy Resources Ltd - HongKong
- Maheswari Brothers Coal Limited - India
- Semirara Mining and Power Corporation, Philippines
- Intertek Mineral Services - Indonesia
- Kartika Selabumi Mining - Indonesia
- Petrochimia International Co. Ltd.- Taiwan
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Lanco Infratech Ltd - India
- Binh Thuan Hamico - Vietnam
- Renaissance Capital - South Africa
- Eastern Coal Council - USA
- Orica Mining Services - Indonesia
- Asmin Koalindo Tuhup - Indonesia
- Makarim & Taira - Indonesia
- Global Green Power PLC Corporation, Philippines
- San Jose City I Power Corp, Philippines
- Eastern Energy - Thailand
- Rashtriya Ispat Nigam Limited - India
- Star Paper Mills Limited - India
- Mintek Dendrill Indonesia
- Independent Power Producers Association of India
- McConnell Dowell - Australia
- Directorate General of MIneral and Coal - Indonesia
- Gujarat Electricity Regulatory Commission - India
- Heidelberg Cement - Germany
- Kohat Cement Company Ltd. - Pakistan
- Siam City Cement - Thailand
- CIMB Investment Bank - Malaysia
- Mjunction Services Limited - India
- Interocean Group of Companies - India
- Bhoruka Overseas - Indonesia
- The University of Queensland
- Ind-Barath Power Infra Limited - India
- Vizag Seaport Private Limited - India
- Bhatia International Limited - India
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Toyota Tsusho Corporation, Japan
- Altura Mining Limited, Indonesia
- Mercuria Energy - Indonesia
- SN Aboitiz Power Inc, Philippines
- IEA Clean Coal Centre - UK
- Sical Logistics Limited - India
- Oldendorff Carriers - Singapore
- Banpu Public Company Limited - Thailand
- Metalloyd Limited - United Kingdom
- GAC Shipping (India) Pvt Ltd
- Minerals Council of Australia
- Energy Development Corp, Philippines
- VISA Power Limited - India
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Vijayanagar Sugar Pvt Ltd - India
- Jaiprakash Power Ventures ltd
- Directorate Of Revenue Intelligence - India
- Jindal Steel & Power Ltd - India
- Sinarmas Energy and Mining - Indonesia
- Bank of Tokyo Mitsubishi UFJ Ltd
- Petron Corporation, Philippines
- ICICI Bank Limited - India
- Wilmar Investment Holdings
- Xindia Steels Limited - India
- International Coal Ventures Pvt Ltd - India
- Simpson Spence & Young - Indonesia
- Latin American Coal - Colombia
- Economic Council, Georgia
- Kobexindo Tractors - Indoneisa
- Ministry of Finance - Indonesia
- European Bulk Services B.V. - Netherlands
- IHS Mccloskey Coal Group - USA
- Baramulti Group, Indonesia
- Sree Jayajothi Cements Limited - India
- Jorong Barutama Greston.PT - Indonesia
- Wood Mackenzie - Singapore
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