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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, 25 August 15
INDONESIA MINERS' NPLS TO RISE FURTHER, BANK RISKS BUILD - FITCH
The NPLs of Indonesian mine and mine services companies are likely to rise further in the short term, says Fitch Ratings, after reaching multi-year ...
Tuesday, 25 August 15
MINER'S EARNINGS DROP ON FALLING COAL PRICES; Q2'16 FOB RICHARDS BAY COAL SWAP CLOSED AT $ 52.23 A TON
COALspot.com: API4 FOB Richards Bay Coal swap for delivery 4Q' 2015 declined month over month and week over week.
The 4Q swap was down US$ ...
Monday, 24 August 15
FOB NEWCASTLE COAL SWAPS HIT FRESH LOW, DIPPING BELOW $42 A TON
COALspot.com: API 5 FOB Newcastle Coal swap for 4Q’ 2015 delivery down $ 2.20 per MT (-5.01%) month over month to US$ 41.70 per mt. The swap ...
Monday, 24 August 15
Q1'16 CFR SOUTH CHINA COAL SWAP CLOSED AT $ 48.65 PMT
COALspot.com: API 8 CFR South China Coal swap for 4Q’ 2015 delivery declined just US$ 1.89 (3.74%) per MT month over month.
A commodity ...
Monday, 24 August 15
IS CHINA'S STEEL EXPORTS ENOUGH TO SUPPORT THE FREIGHT MARKET? - BIMCO
No, it’s not enough, you will need lower Chinese iron ore production too in order to keep growing imports of iron ore into China that will su ...
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Showing 2851 to 2855 news of total 6871 |
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- Malabar Cements Ltd - India
- New Zealand Coal & Carbon
- Bhushan Steel Limited - India
- Thai Mozambique Logistica
- Iligan Light & Power Inc, Philippines
- Vijayanagar Sugar Pvt Ltd - India
- Power Finance Corporation Ltd., India
- Port Waratah Coal Services - Australia
- White Energy Company Limited
- Borneo Indobara - Indonesia
- Makarim & Taira - Indonesia
- Orica Australia Pty. Ltd.
- Posco Energy - South Korea
- Cigading International Bulk Terminal - Indonesia
- Maheswari Brothers Coal Limited - India
- Mintek Dendrill Indonesia
- Rio Tinto Coal - Australia
- Kobexindo Tractors - Indoneisa
- CNBM International Corporation - China
- SMC Global Power, Philippines
- IEA Clean Coal Centre - UK
- Energy Development Corp, Philippines
- Georgia Ports Authority, United States
- Kapuas Tunggal Persada - Indonesia
- IHS Mccloskey Coal Group - USA
- South Luzon Thermal Energy Corporation
- Indian Energy Exchange, India
- Romanian Commodities Exchange
- Orica Mining Services - Indonesia
- Kalimantan Lumbung Energi - Indonesia
- Kideco Jaya Agung - Indonesia
- GN Power Mariveles Coal Plant, Philippines
- Bhatia International Limited - India
- Ministry of Finance - Indonesia
- Essar Steel Hazira Ltd - India
- Metalloyd Limited - United Kingdom
- Savvy Resources Ltd - HongKong
- Directorate General of MIneral and Coal - Indonesia
- International Coal Ventures Pvt Ltd - India
- Tamil Nadu electricity Board
- Independent Power Producers Association of India
- Sakthi Sugars Limited - India
- Ceylon Electricity Board - Sri Lanka
- Maharashtra Electricity Regulatory Commission - India
- Chamber of Mines of South Africa
- SMG Consultants - Indonesia
- AsiaOL BioFuels Corp., Philippines
- Siam City Cement - Thailand
- Petrochimia International Co. Ltd.- Taiwan
- Jorong Barutama Greston.PT - Indonesia
- Sarangani Energy Corporation, Philippines
- Attock Cement Pakistan Limited
- Ambuja Cements Ltd - India
- Coastal Gujarat Power Limited - India
- Formosa Plastics Group - Taiwan
- San Jose City I Power Corp, Philippines
- Trasteel International SA, Italy
- Interocean Group of Companies - India
- Bukit Baiduri Energy - Indonesia
- Ministry of Transport, Egypt
- Aditya Birla Group - India
- Billiton Holdings Pty Ltd - Australia
- Kohat Cement Company Ltd. - Pakistan
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Wilmar Investment Holdings
- Timah Investasi Mineral - Indoneisa
- Larsen & Toubro Limited - India
- Videocon Industries ltd - India
- Ministry of Mines - Canada
- Planning Commission, India
- Kumho Petrochemical, South Korea
- Kaltim Prima Coal - Indonesia
- Chettinad Cement Corporation Ltd - India
- India Bulls Power Limited - India
- Leighton Contractors Pty Ltd - Australia
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Uttam Galva Steels Limited - India
- The State Trading Corporation of India Ltd
- Meralco Power Generation, Philippines
- Australian Commodity Traders Exchange
- Meenaskhi Energy Private Limited - India
- MS Steel International - UAE
- Wood Mackenzie - Singapore
- Intertek Mineral Services - Indonesia
- Mercator Lines Limited - India
- Dalmia Cement Bharat India
- Altura Mining Limited, Indonesia
- CIMB Investment Bank - Malaysia
- PTC India Limited - India
- Vizag Seaport Private Limited - India
- Sree Jayajothi Cements Limited - India
- Anglo American - United Kingdom
- Antam Resourcindo - Indonesia
- ASAPP Information Group - India
- Eastern Coal Council - USA
- Bharathi Cement Corporation - India
- PNOC Exploration Corporation - Philippines
- Bank of Tokyo Mitsubishi UFJ Ltd
- Sical Logistics Limited - India
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Agrawal Coal Company - India
- Gujarat Electricity Regulatory Commission - India
- Alfred C Toepfer International GmbH - Germany
- Bangladesh Power Developement Board
- Bukit Asam (Persero) Tbk - Indonesia
- Australian Coal Association
- Rashtriya Ispat Nigam Limited - India
- Coal and Oil Company - UAE
- Karbindo Abesyapradhi - Indoneisa
- OPG Power Generation Pvt Ltd - India
- ICICI Bank Limited - India
- Sojitz Corporation - Japan
- Gujarat Mineral Development Corp Ltd - India
- Bhoruka Overseas - Indonesia
- The Treasury - Australian Government
- Simpson Spence & Young - Indonesia
- Gujarat Sidhee Cement - India
- Bukit Makmur.PT - Indonesia
- Baramulti Group, Indonesia
- Riau Bara Harum - Indonesia
- Marubeni Corporation - India
- GVK Power & Infra Limited - India
- SN Aboitiz Power Inc, Philippines
- Cement Manufacturers Association - India
- Siam City Cement PLC, Thailand
- Carbofer General Trading SA - India
- Tata Chemicals Ltd - India
- Karaikal Port Pvt Ltd - India
- Madhucon Powers Ltd - India
- Heidelberg Cement - Germany
- Sindya Power Generating Company Private Ltd
- Lanco Infratech Ltd - India
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Asmin Koalindo Tuhup - Indonesia
- Medco Energi Mining Internasional
- Indogreen Group - Indonesia
- Manunggal Multi Energi - Indonesia
- Holcim Trading Pte Ltd - Singapore
- Electricity Authority, New Zealand
- European Bulk Services B.V. - Netherlands
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Indika Energy - Indonesia
- Global Business Power Corporation, Philippines
- LBH Netherlands Bv - Netherlands
- Africa Commodities Group - South Africa
- GAC Shipping (India) Pvt Ltd
- Therma Luzon, Inc, Philippines
- Aboitiz Power Corporation - Philippines
- Jaiprakash Power Ventures ltd
- GMR Energy Limited - India
- Grasim Industreis Ltd - India
- Global Green Power PLC Corporation, Philippines
- London Commodity Brokers - England
- Star Paper Mills Limited - India
- Edison Trading Spa - Italy
- Bayan Resources Tbk. - Indonesia
- PowerSource Philippines DevCo
- Barasentosa Lestari - Indonesia
- Kartika Selabumi Mining - Indonesia
- Salva Resources Pvt Ltd - India
- Central Java Power - Indonesia
- Ind-Barath Power Infra Limited - India
- Neyveli Lignite Corporation Ltd, - India
- Electricity Generating Authority of Thailand
- Globalindo Alam Lestari - Indonesia
- Central Electricity Authority - India
- PetroVietnam Power Coal Import and Supply Company
- Jindal Steel & Power Ltd - India
- Oldendorff Carriers - Singapore
- Singapore Mercantile Exchange
- Indian Oil Corporation Limited
- Petron Corporation, Philippines
- Eastern Energy - Thailand
- TNB Fuel Sdn Bhd - Malaysia
- Krishnapatnam Port Company Ltd. - India
- Latin American Coal - Colombia
- Semirara Mining and Power Corporation, Philippines
- Toyota Tsusho Corporation, Japan
- Parry Sugars Refinery, India
- Miang Besar Coal Terminal - Indonesia
- Global Coal Blending Company Limited - Australia
- Renaissance Capital - South Africa
- Minerals Council of Australia
- Semirara Mining Corp, Philippines
- Pendopo Energi Batubara - Indonesia
- Standard Chartered Bank - UAE
- The University of Queensland
- Parliament of New Zealand
- Thiess Contractors Indonesia
- VISA Power Limited - India
- Vedanta Resources Plc - India
- Bulk Trading Sa - Switzerland
- Kepco SPC Power Corporation, Philippines
- Commonwealth Bank - Australia
- Straits Asia Resources Limited - Singapore
- Economic Council, Georgia
- Mjunction Services Limited - India
- Deloitte Consulting - India
- Binh Thuan Hamico - Vietnam
- Price Waterhouse Coopers - Russia
- Energy Link Ltd, New Zealand
- Samtan Co., Ltd - South Korea
- TeaM Sual Corporation - Philippines
- Offshore Bulk Terminal Pte Ltd, Singapore
- Goldman Sachs - Singapore
- Coalindo Energy - Indonesia
- Pipit Mutiara Jaya. PT, Indonesia
- Banpu Public Company Limited - Thailand
- Sinarmas Energy and Mining - Indonesia
- Indonesian Coal Mining Association
- Merrill Lynch Commodities Europe
- Bahari Cakrawala Sebuku - Indonesia
- McConnell Dowell - Australia
- Xindia Steels Limited - India
- Indo Tambangraya Megah - Indonesia
- Directorate Of Revenue Intelligence - India
- Mercuria Energy - Indonesia
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