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, 23 August 15
SHIPPING FREIGHT RATES FALL SHARPLY ON EXCESS SUPPLY AND LOW DEMAND
COALspot.com: The BDI continued to soften and was down 5.78 pct and falls back below 1000 points this week.
The cape Index lost 17.25 per cent ...
Friday, 21 August 15
U.S. YEAR-TO-DATE COAL PRODUCTION VOLUME FALLS 8.7% Y-O-Y
COALspot.com – United States the world’s second largest coal producer has produced approximately totaled an estimated 18.3 million shor ...
Friday, 21 August 15
GLOBALCOAL TO LAUNCH ONLINE TRADING OF PHYSICAL MET COAL ON 13 OCTOBER
On 13 October 2015, globalCOAL will launch an online platform for the physical procurement and trade of high quality hard coking coal delivered FOB ...
Thursday, 20 August 15
COAL PRICES FALL TO 12-YEAR LOWS AS CHINA, INDIA JOIN DEMAND SLOWDOWN - REUTERS
Coal futures have fallen to 12-year lows, hit by soaring production and a slowdown in global buying, including from India and China which until rec ...
Wednesday, 19 August 15
FOB INDONESIA COAL SWAPS CONTINUE FLAT TREND LINE THIS WEEK
COALspot.com: Indonesian coal swap for delivery 4Q 2015 declined month on month and flat week over week, this past week.
The 4Q swap was decli ...
|
|
|
Showing 2856 to 2860 news of total 6871 |
|
 |
|
|
|
|
| |
|
 |
|
|
| |
|
- Toyota Tsusho Corporation, Japan
- Africa Commodities Group - South Africa
- Kepco SPC Power Corporation, Philippines
- Riau Bara Harum - Indonesia
- New Zealand Coal & Carbon
- Barasentosa Lestari - Indonesia
- Simpson Spence & Young - Indonesia
- Central Java Power - Indonesia
- Singapore Mercantile Exchange
- GAC Shipping (India) Pvt Ltd
- Cement Manufacturers Association - India
- Directorate General of MIneral and Coal - Indonesia
- Kaltim Prima Coal - Indonesia
- Petron Corporation, Philippines
- Global Business Power Corporation, Philippines
- Banpu Public Company Limited - Thailand
- European Bulk Services B.V. - Netherlands
- Bukit Makmur.PT - Indonesia
- Mintek Dendrill Indonesia
- Commonwealth Bank - Australia
- Mjunction Services Limited - India
- Parry Sugars Refinery, India
- Semirara Mining and Power Corporation, Philippines
- Ministry of Transport, Egypt
- Coal and Oil Company - UAE
- Energy Link Ltd, New Zealand
- Sical Logistics Limited - India
- PTC India Limited - India
- Oldendorff Carriers - Singapore
- Sinarmas Energy and Mining - Indonesia
- Kumho Petrochemical, South Korea
- Price Waterhouse Coopers - Russia
- TeaM Sual Corporation - Philippines
- Grasim Industreis Ltd - India
- Sindya Power Generating Company Private Ltd
- Sree Jayajothi Cements Limited - India
- SN Aboitiz Power Inc, Philippines
- Kideco Jaya Agung - Indonesia
- ICICI Bank Limited - India
- White Energy Company Limited
- PNOC Exploration Corporation - Philippines
- Manunggal Multi Energi - Indonesia
- Edison Trading Spa - Italy
- Parliament of New Zealand
- Krishnapatnam Port Company Ltd. - India
- Ceylon Electricity Board - Sri Lanka
- PowerSource Philippines DevCo
- Posco Energy - South Korea
- India Bulls Power Limited - India
- Jorong Barutama Greston.PT - Indonesia
- Meralco Power Generation, Philippines
- Miang Besar Coal Terminal - Indonesia
- VISA Power Limited - India
- IEA Clean Coal Centre - UK
- Binh Thuan Hamico - Vietnam
- Semirara Mining Corp, Philippines
- Meenaskhi Energy Private Limited - India
- Aboitiz Power Corporation - Philippines
- Minerals Council of Australia
- The University of Queensland
- Carbofer General Trading SA - India
- Vijayanagar Sugar Pvt Ltd - India
- Therma Luzon, Inc, Philippines
- Siam City Cement PLC, Thailand
- Directorate Of Revenue Intelligence - India
- Indo Tambangraya Megah - Indonesia
- Australian Commodity Traders Exchange
- Energy Development Corp, Philippines
- Pipit Mutiara Jaya. PT, Indonesia
- Global Green Power PLC Corporation, Philippines
- Straits Asia Resources Limited - Singapore
- Aditya Birla Group - India
- Thai Mozambique Logistica
- Medco Energi Mining Internasional
- Karbindo Abesyapradhi - Indoneisa
- South Luzon Thermal Energy Corporation
- Petrochimia International Co. Ltd.- Taiwan
- Formosa Plastics Group - Taiwan
- Timah Investasi Mineral - Indoneisa
- Samtan Co., Ltd - South Korea
- Wood Mackenzie - Singapore
- Gujarat Mineral Development Corp Ltd - India
- Iligan Light & Power Inc, Philippines
- Bahari Cakrawala Sebuku - Indonesia
- GMR Energy Limited - India
- Karaikal Port Pvt Ltd - India
- Antam Resourcindo - Indonesia
- Global Coal Blending Company Limited - Australia
- Makarim & Taira - Indonesia
- Gujarat Sidhee Cement - India
- MS Steel International - UAE
- Georgia Ports Authority, United States
- Planning Commission, India
- Vizag Seaport Private Limited - India
- Deloitte Consulting - India
- Sarangani Energy Corporation, Philippines
- Latin American Coal - Colombia
- Marubeni Corporation - India
- Dalmia Cement Bharat India
- Intertek Mineral Services - Indonesia
- McConnell Dowell - Australia
- Wilmar Investment Holdings
- Bank of Tokyo Mitsubishi UFJ Ltd
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Rashtriya Ispat Nigam Limited - India
- Orica Australia Pty. Ltd.
- Vedanta Resources Plc - India
- Essar Steel Hazira Ltd - India
- Electricity Generating Authority of Thailand
- Madhucon Powers Ltd - India
- Ministry of Mines - Canada
- Anglo American - United Kingdom
- Lanco Infratech Ltd - India
- Bukit Baiduri Energy - Indonesia
- AsiaOL BioFuels Corp., Philippines
- Uttam Galva Steels Limited - India
- Indogreen Group - Indonesia
- Malabar Cements Ltd - India
- Independent Power Producers Association of India
- Offshore Bulk Terminal Pte Ltd, Singapore
- Eastern Coal Council - USA
- Holcim Trading Pte Ltd - Singapore
- Mercuria Energy - Indonesia
- Port Waratah Coal Services - Australia
- Chettinad Cement Corporation Ltd - India
- Coalindo Energy - Indonesia
- Maheswari Brothers Coal Limited - India
- Romanian Commodities Exchange
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Merrill Lynch Commodities Europe
- Bharathi Cement Corporation - India
- Standard Chartered Bank - UAE
- Kartika Selabumi Mining - Indonesia
- Indika Energy - Indonesia
- Bangladesh Power Developement Board
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Kohat Cement Company Ltd. - Pakistan
- Alfred C Toepfer International GmbH - Germany
- Economic Council, Georgia
- Star Paper Mills Limited - India
- Ind-Barath Power Infra Limited - India
- CIMB Investment Bank - Malaysia
- The State Trading Corporation of India Ltd
- Altura Mining Limited, Indonesia
- Savvy Resources Ltd - HongKong
- Neyveli Lignite Corporation Ltd, - India
- Thiess Contractors Indonesia
- GN Power Mariveles Coal Plant, Philippines
- Larsen & Toubro Limited - India
- Cigading International Bulk Terminal - Indonesia
- Globalindo Alam Lestari - Indonesia
- PetroVietnam Power Coal Import and Supply Company
- Baramulti Group, Indonesia
- Indonesian Coal Mining Association
- The Treasury - Australian Government
- Bhoruka Overseas - Indonesia
- Heidelberg Cement - Germany
- Gujarat Electricity Regulatory Commission - India
- Borneo Indobara - Indonesia
- London Commodity Brokers - England
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Electricity Authority, New Zealand
- Salva Resources Pvt Ltd - India
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Orica Mining Services - Indonesia
- SMC Global Power, Philippines
- Mercator Lines Limited - India
- Tata Chemicals Ltd - India
- Renaissance Capital - South Africa
- Tamil Nadu electricity Board
- Attock Cement Pakistan Limited
- Chamber of Mines of South Africa
- Central Electricity Authority - India
- LBH Netherlands Bv - Netherlands
- Indian Energy Exchange, India
- Billiton Holdings Pty Ltd - Australia
- Metalloyd Limited - United Kingdom
- Kalimantan Lumbung Energi - Indonesia
- SMG Consultants - Indonesia
- Maharashtra Electricity Regulatory Commission - India
- ASAPP Information Group - India
- Eastern Energy - Thailand
- Bulk Trading Sa - Switzerland
- Sojitz Corporation - Japan
- Ministry of Finance - Indonesia
- OPG Power Generation Pvt Ltd - India
- Leighton Contractors Pty Ltd - Australia
- Asmin Koalindo Tuhup - Indonesia
- Jaiprakash Power Ventures ltd
- Interocean Group of Companies - India
- Xindia Steels Limited - India
- Bhushan Steel Limited - India
- Sakthi Sugars Limited - India
- Rio Tinto Coal - Australia
- San Jose City I Power Corp, Philippines
- Goldman Sachs - Singapore
- Siam City Cement - Thailand
- Kobexindo Tractors - Indoneisa
- Ambuja Cements Ltd - India
- Bhatia International Limited - India
- Coastal Gujarat Power Limited - India
- Kapuas Tunggal Persada - Indonesia
- Trasteel International SA, Italy
- CNBM International Corporation - China
- Pendopo Energi Batubara - Indonesia
- International Coal Ventures Pvt Ltd - India
- Jindal Steel & Power Ltd - India
- GVK Power & Infra Limited - India
- Bayan Resources Tbk. - Indonesia
- Bukit Asam (Persero) Tbk - Indonesia
- IHS Mccloskey Coal Group - USA
- Indian Oil Corporation Limited
- Videocon Industries ltd - India
- Power Finance Corporation Ltd., India
- Agrawal Coal Company - India
- TNB Fuel Sdn Bhd - Malaysia
- Australian Coal Association
|
| |
| |
|
