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.
|
|
Friday, 07 August 15
U.S. YEAR-TO-DATE COAL PRODUCTION TOTALED 528.1 MMST; DOWN 8.7% Y/Y - EIA
COALspot.com – United States the world’s second largest coal producer has produced approximately totaled an estimated 17.7 million shor ...
Thursday, 06 August 15
THE RATES FOR CAPES SHOOT UP LAST WEEK; GIVING THIS RECENT RALLY SOME MUCH NEEDED LEGS - INTERMODAL
COALspot.com: The Dry Bulk market noted another positive closing last week, entirely supported by Capesize performance, which managed to balance th ...
Thursday, 06 August 15
HARD COAL AND COKE IMPORTS TO GERMANY REACH NEW ALL-TIME HIGH OF 56.2M TONES IN 2014
Demand for German and imported hard coal In 2014, in 2014 fell by almost 8%, or 4.8m TCE, to 56.2m TCE.
According to German Coal Importer ...
Thursday, 06 August 15
SEABORNE WORLD TRADE IN STEAM COAL GROWS BY 3% YOY - GERMAN COAL IMPORTER ASSOCIATION
Global trade with hard coal, at 1,272m tones in 2014, increased by 35m tonnes or 3% in comparison with the previous year.
According to associa ...
Wednesday, 05 August 15
SHIPPING MARKET INSIGHT - KATERINA RESTIS
On July 14th, 2015 a historical consensus was reached in Vienna between Iran and the five permanent members of the U.N. Security Council, plus Germ ...
|
|
|
Showing 2881 to 2885 news of total 6871 |
|
 |
|
|
|
|
| |
|
 |
|
|
| |
|
- Sical Logistics Limited - India
- Global Green Power PLC Corporation, Philippines
- Romanian Commodities Exchange
- Madhucon Powers Ltd - India
- New Zealand Coal & Carbon
- Pipit Mutiara Jaya. PT, Indonesia
- Cement Manufacturers Association - India
- Petron Corporation, Philippines
- SMC Global Power, Philippines
- Binh Thuan Hamico - Vietnam
- Siam City Cement - Thailand
- Kohat Cement Company Ltd. - Pakistan
- Krishnapatnam Port Company Ltd. - India
- GN Power Mariveles Coal Plant, Philippines
- Sojitz Corporation - Japan
- Standard Chartered Bank - UAE
- Tamil Nadu electricity Board
- Intertek Mineral Services - Indonesia
- Baramulti Group, Indonesia
- SMG Consultants - Indonesia
- Port Waratah Coal Services - Australia
- Price Waterhouse Coopers - Russia
- Malabar Cements Ltd - India
- White Energy Company Limited
- Electricity Authority, New Zealand
- MS Steel International - UAE
- Global Business Power Corporation, Philippines
- Rashtriya Ispat Nigam Limited - India
- Interocean Group of Companies - India
- Bahari Cakrawala Sebuku - Indonesia
- Directorate Of Revenue Intelligence - India
- Coal and Oil Company - UAE
- PNOC Exploration Corporation - Philippines
- Heidelberg Cement - Germany
- Larsen & Toubro Limited - India
- Independent Power Producers Association of India
- Merrill Lynch Commodities Europe
- Bukit Asam (Persero) Tbk - Indonesia
- Gujarat Sidhee Cement - India
- Bank of Tokyo Mitsubishi UFJ Ltd
- Kapuas Tunggal Persada - Indonesia
- Petrochimia International Co. Ltd.- Taiwan
- Mjunction Services Limited - India
- Star Paper Mills Limited - India
- Wood Mackenzie - Singapore
- Kepco SPC Power Corporation, Philippines
- Planning Commission, India
- Edison Trading Spa - Italy
- LBH Netherlands Bv - Netherlands
- Deloitte Consulting - India
- PTC India Limited - India
- Borneo Indobara - Indonesia
- Aditya Birla Group - India
- Economic Council, Georgia
- Kalimantan Lumbung Energi - Indonesia
- Posco Energy - South Korea
- Coalindo Energy - Indonesia
- The University of Queensland
- Metalloyd Limited - United Kingdom
- Formosa Plastics Group - Taiwan
- Directorate General of MIneral and Coal - Indonesia
- Trasteel International SA, Italy
- Maharashtra Electricity Regulatory Commission - India
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Mercuria Energy - Indonesia
- GVK Power & Infra Limited - India
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Mintek Dendrill Indonesia
- Anglo American - United Kingdom
- Bulk Trading Sa - Switzerland
- Ministry of Transport, Egypt
- Sindya Power Generating Company Private Ltd
- Alfred C Toepfer International GmbH - Germany
- Pendopo Energi Batubara - Indonesia
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Global Coal Blending Company Limited - Australia
- SN Aboitiz Power Inc, Philippines
- Carbofer General Trading SA - India
- Wilmar Investment Holdings
- Minerals Council of Australia
- VISA Power Limited - India
- Kaltim Prima Coal - Indonesia
- Sree Jayajothi Cements Limited - India
- Electricity Generating Authority of Thailand
- International Coal Ventures Pvt Ltd - India
- Indika Energy - Indonesia
- Iligan Light & Power Inc, Philippines
- AsiaOL BioFuels Corp., Philippines
- Vizag Seaport Private Limited - India
- Karbindo Abesyapradhi - Indoneisa
- ASAPP Information Group - India
- Sarangani Energy Corporation, Philippines
- Thiess Contractors Indonesia
- European Bulk Services B.V. - Netherlands
- CNBM International Corporation - China
- Globalindo Alam Lestari - Indonesia
- Chamber of Mines of South Africa
- Kobexindo Tractors - Indoneisa
- The State Trading Corporation of India Ltd
- Indogreen Group - Indonesia
- Semirara Mining and Power Corporation, Philippines
- Parry Sugars Refinery, India
- South Luzon Thermal Energy Corporation
- Bukit Makmur.PT - Indonesia
- The Treasury - Australian Government
- Thai Mozambique Logistica
- GAC Shipping (India) Pvt Ltd
- Ministry of Finance - Indonesia
- Lanco Infratech Ltd - India
- Jorong Barutama Greston.PT - Indonesia
- IHS Mccloskey Coal Group - USA
- Indo Tambangraya Megah - Indonesia
- PowerSource Philippines DevCo
- Cigading International Bulk Terminal - Indonesia
- Gujarat Electricity Regulatory Commission - India
- Bhatia International Limited - India
- Sakthi Sugars Limited - India
- Commonwealth Bank - Australia
- Samtan Co., Ltd - South Korea
- Central Electricity Authority - India
- Orica Mining Services - Indonesia
- Orica Australia Pty. Ltd.
- Manunggal Multi Energi - Indonesia
- Savvy Resources Ltd - HongKong
- Rio Tinto Coal - Australia
- Medco Energi Mining Internasional
- Makarim & Taira - Indonesia
- Vedanta Resources Plc - India
- Central Java Power - Indonesia
- IEA Clean Coal Centre - UK
- Meralco Power Generation, Philippines
- OPG Power Generation Pvt Ltd - India
- Eastern Energy - Thailand
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- TeaM Sual Corporation - Philippines
- Banpu Public Company Limited - Thailand
- Jindal Steel & Power Ltd - India
- Dalmia Cement Bharat India
- Siam City Cement PLC, Thailand
- Essar Steel Hazira Ltd - India
- Ceylon Electricity Board - Sri Lanka
- Gujarat Mineral Development Corp Ltd - India
- Offshore Bulk Terminal Pte Ltd, Singapore
- Bharathi Cement Corporation - India
- Australian Commodity Traders Exchange
- Latin American Coal - Colombia
- Ind-Barath Power Infra Limited - India
- Therma Luzon, Inc, Philippines
- Jaiprakash Power Ventures ltd
- Antam Resourcindo - Indonesia
- ICICI Bank Limited - India
- Vijayanagar Sugar Pvt Ltd - India
- Holcim Trading Pte Ltd - Singapore
- Indian Energy Exchange, India
- Grasim Industreis Ltd - India
- Agrawal Coal Company - India
- Leighton Contractors Pty Ltd - Australia
- Asmin Koalindo Tuhup - Indonesia
- Bhoruka Overseas - Indonesia
- Renaissance Capital - South Africa
- Tata Chemicals Ltd - India
- Toyota Tsusho Corporation, Japan
- Billiton Holdings Pty Ltd - Australia
- Salva Resources Pvt Ltd - India
- Xindia Steels Limited - India
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Energy Link Ltd, New Zealand
- Uttam Galva Steels Limited - India
- Kartika Selabumi Mining - Indonesia
- Barasentosa Lestari - Indonesia
- Altura Mining Limited, Indonesia
- Meenaskhi Energy Private Limited - India
- Indonesian Coal Mining Association
- Attock Cement Pakistan Limited
- Indian Oil Corporation Limited
- McConnell Dowell - Australia
- Bukit Baiduri Energy - Indonesia
- Australian Coal Association
- Power Finance Corporation Ltd., India
- Straits Asia Resources Limited - Singapore
- Bangladesh Power Developement Board
- Aboitiz Power Corporation - Philippines
- San Jose City I Power Corp, Philippines
- Karaikal Port Pvt Ltd - India
- Singapore Mercantile Exchange
- Mercator Lines Limited - India
- Simpson Spence & Young - Indonesia
- London Commodity Brokers - England
- Videocon Industries ltd - India
- Timah Investasi Mineral - Indoneisa
- Oldendorff Carriers - Singapore
- India Bulls Power Limited - India
- PetroVietnam Power Coal Import and Supply Company
- Ambuja Cements Ltd - India
- Ministry of Mines - Canada
- Africa Commodities Group - South Africa
- Coastal Gujarat Power Limited - India
- TNB Fuel Sdn Bhd - Malaysia
- Sinarmas Energy and Mining - Indonesia
- Georgia Ports Authority, United States
- Kumho Petrochemical, South Korea
- Miang Besar Coal Terminal - Indonesia
- Bayan Resources Tbk. - Indonesia
- Chettinad Cement Corporation Ltd - India
- Parliament of New Zealand
- CIMB Investment Bank - Malaysia
- Neyveli Lignite Corporation Ltd, - India
- Marubeni Corporation - India
- GMR Energy Limited - India
- Riau Bara Harum - Indonesia
- Goldman Sachs - Singapore
- Bhushan Steel Limited - India
- Energy Development Corp, Philippines
- Eastern Coal Council - USA
- Maheswari Brothers Coal Limited - India
- Kideco Jaya Agung - Indonesia
- Semirara Mining Corp, Philippines
|
| |
| |
|
