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Tuesday, 03 November 15
EU OIL MAJORS FACE FURTHER EARNINGS DECLINE IN Q415 - FITCH RATINGS
 The sharp drop in major European oil companies' third-quarter profits is likely to be extended in the fourth quarter as refining margins, which had cushioned some of the blow from low oil prices, have fallen steeply, Fitch Ratings says.
According to Fitch, with little prospect of a near-term oil-price recovery and refining margins likely to remain thin, companies' ability to stabilize or even grow profits in 2016 will depend on how quickly cost-cutting measures and cost deflation in the supply chain feed through to the bottom line.
Royal Dutch Shell, Total, BP, Eni and BG all reported 3Q15 results last week. On average, their 3Q15 EBITDA fell by 26% compared with 2Q15, and cash flow from operations by 30%. The main reason was lower oil prices as Brent slid 19% from an average USD63/bbl in 2Q15 to USD51/bbl in 3Q15. The majors' 9M15 EBITDA dropped 39%, and cash from operations fell 38%, as Brent plummeted by 48%, from an average of USD107/bbl in 9M14 to USD56 in 9M15.
4Q15 may be even more painful for integrated companies as refining margins have fallen since the middle of the third quarter, which is likely to drag on profits in their downstream operations. In October, Brent Crack Rotterdam Refinery Margin, as calculated by Thomson Reuters, averaged USD4.0/bbl, compared with USD7.9 in 3Q15 and USD8.1 in 2Q15.
Part of this decline is likely to be a seasonal effect from the end of the main driving season in the northern hemisphere. But we also expect an underlying correction in margins due to overcapacity in European refining and strong competition from Middle Eastern, Russian and US refineries, which generally have access to cheaper feedstock and lower energy costs, says Fitch. BG may be the only exception. We expect its earnings to rise in 4Q15 vs 3Q15 provided oil prices do not fall. This is because BG has no exposure to refining and its production is rising due to operations ramping up in Australia and Brazil.
Apart from oil prices, majors' upstream profits will be increasingly affected by the scale of cost deflation. Oil majors are reducing costs and in some parts of the value chain, the fall has already been substantial. For example, in the offshore drilling industry the cost of hiring a rig has fallen by 30%-40% yoy, according to various sources. According to Total, rates for many other services, including marine logistics and well services, are down up to 20%. Overall, however, industry deflation is still insufficient to materially affect profits, as negotiating new contracts may take some time. We expect the impact to be more pronounced in 2016 as oil majors are now re-negotiating prices with their contractors and are aiming to reduce staff costs and streamline operations.
To balance their cash flows, oil majors are reducing capex and continuing divestments. Majors' ability to keep these commitments without jeopardizing the level and quality of reserves and production will drive their ratings in the next one or two years. For example, BP said its 2015-2017 capex will be USD17bn-19bn a year, compared with the original 2015 guidance of USD24bn-26bn announced a year ago. Total's guidance for 2015 is unchanged at USD23bn-24bn, but the company said capex will go down to USD20bn-21bn in 2016 and USD17bn-19bn a year in 2017-2019. Shell said it will prioritize debt reduction over dividends and capex.
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Thursday, 19 November 15
CHINA STEEL PRODUCTION CAPACITY TO PEAK IN 2016 - FITCH RATINGS
COALspot.com: Fitch Ratings today says that China's steel production capacity is likely to peak in 2016, with capacity elimination over the nex ...
Thursday, 19 November 15
Q3' 16 RICHARDS BAY COAL SWAP CLOSED 9% LOWER THAN Q1' 16 DELIVERY PRICE
COALspot.com: API4 FOB Richards Bay Coal swap for delivery Q1’ 2016 up week over week and month over month.
The Q1’ 2016 swa ...
Thursday, 19 November 15
RATES FOR CAPES KEPT MOVING SOUTH - INTERMODAL
COALspot.com: With the BDI currently standing at less than 30 points above the historical lows marked in February this year and with activity acros ...
Wednesday, 18 November 15
MARKET (SHIPPING) INSIGHT - THEODORE NTALAKOS
Supply VS Demand
According to data from the IMF, global growth for 2015 is projected at 3.1 percent, 0.3 percentage point lower than in 2014, ...
Tuesday, 17 November 15
KOMIPO INVITES BIDS FOR (SEMI) ANTHRACITE COAL FOR SEOCHEON POWER PLANT
COALspot.com: South Korean state-owned utility Korea Midland Power (KOMIPO) issued an new tender for 70,000 Metric Tons of (Semi) Anthracite for Ja ...
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- Dalmia Cement Bharat India
- Coastal Gujarat Power Limited - India
- Directorate Of Revenue Intelligence - India
- Parry Sugars Refinery, India
- Petrochimia International Co. Ltd.- Taiwan
- GVK Power & Infra Limited - India
- Maheswari Brothers Coal Limited - India
- CIMB Investment Bank - Malaysia
- Siam City Cement - Thailand
- San Jose City I Power Corp, Philippines
- Madhucon Powers Ltd - India
- Romanian Commodities Exchange
- Ind-Barath Power Infra Limited - India
- Bangladesh Power Developement Board
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Semirara Mining Corp, Philippines
- Iligan Light & Power Inc, Philippines
- Kalimantan Lumbung Energi - Indonesia
- Lanco Infratech Ltd - India
- Essar Steel Hazira Ltd - India
- Wood Mackenzie - Singapore
- Tamil Nadu electricity Board
- Aboitiz Power Corporation - Philippines
- Indogreen Group - Indonesia
- Coal and Oil Company - UAE
- Bulk Trading Sa - Switzerland
- South Luzon Thermal Energy Corporation
- Anglo American - United Kingdom
- Indian Energy Exchange, India
- Port Waratah Coal Services - Australia
- Kideco Jaya Agung - Indonesia
- Indian Oil Corporation Limited
- White Energy Company Limited
- Eastern Energy - Thailand
- Electricity Authority, New Zealand
- Electricity Generating Authority of Thailand
- Jorong Barutama Greston.PT - Indonesia
- ASAPP Information Group - India
- The State Trading Corporation of India Ltd
- Jaiprakash Power Ventures ltd
- Minerals Council of Australia
- Edison Trading Spa - Italy
- Africa Commodities Group - South Africa
- TNB Fuel Sdn Bhd - Malaysia
- LBH Netherlands Bv - Netherlands
- GMR Energy Limited - India
- Ceylon Electricity Board - Sri Lanka
- Orica Australia Pty. Ltd.
- PTC India Limited - India
- Coalindo Energy - Indonesia
- Bhatia International Limited - India
- Bayan Resources Tbk. - Indonesia
- Miang Besar Coal Terminal - Indonesia
- Indika Energy - Indonesia
- Sinarmas Energy and Mining - Indonesia
- Offshore Bulk Terminal Pte Ltd, Singapore
- Simpson Spence & Young - Indonesia
- Ministry of Transport, Egypt
- Kumho Petrochemical, South Korea
- Mercator Lines Limited - India
- AsiaOL BioFuels Corp., Philippines
- Agrawal Coal Company - India
- Georgia Ports Authority, United States
- International Coal Ventures Pvt Ltd - India
- Siam City Cement PLC, Thailand
- Karaikal Port Pvt Ltd - India
- Kartika Selabumi Mining - Indonesia
- Posco Energy - South Korea
- Samtan Co., Ltd - South Korea
- Kobexindo Tractors - Indoneisa
- Central Java Power - Indonesia
- Barasentosa Lestari - Indonesia
- Renaissance Capital - South Africa
- Grasim Industreis Ltd - India
- Sakthi Sugars Limited - India
- Meenaskhi Energy Private Limited - India
- Bukit Baiduri Energy - Indonesia
- Makarim & Taira - Indonesia
- Bukit Makmur.PT - Indonesia
- Global Green Power PLC Corporation, Philippines
- Star Paper Mills Limited - India
- Indonesian Coal Mining Association
- Vizag Seaport Private Limited - India
- TeaM Sual Corporation - Philippines
- Ministry of Finance - Indonesia
- Trasteel International SA, Italy
- Vijayanagar Sugar Pvt Ltd - India
- Ministry of Mines - Canada
- Sojitz Corporation - Japan
- Chamber of Mines of South Africa
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- MS Steel International - UAE
- India Bulls Power Limited - India
- Deloitte Consulting - India
- Economic Council, Georgia
- Gujarat Electricity Regulatory Commission - India
- Bhoruka Overseas - Indonesia
- SMG Consultants - Indonesia
- Videocon Industries ltd - India
- McConnell Dowell - Australia
- Karbindo Abesyapradhi - Indoneisa
- Mintek Dendrill Indonesia
- Leighton Contractors Pty Ltd - Australia
- Manunggal Multi Energi - Indonesia
- Marubeni Corporation - India
- Central Electricity Authority - India
- Billiton Holdings Pty Ltd - Australia
- Thai Mozambique Logistica
- Krishnapatnam Port Company Ltd. - India
- Asmin Koalindo Tuhup - Indonesia
- Singapore Mercantile Exchange
- Altura Mining Limited, Indonesia
- Banpu Public Company Limited - Thailand
- Semirara Mining and Power Corporation, Philippines
- SMC Global Power, Philippines
- Energy Development Corp, Philippines
- Sree Jayajothi Cements Limited - India
- Bhushan Steel Limited - India
- Mercuria Energy - Indonesia
- Timah Investasi Mineral - Indoneisa
- Price Waterhouse Coopers - Russia
- Alfred C Toepfer International GmbH - Germany
- GAC Shipping (India) Pvt Ltd
- PowerSource Philippines DevCo
- Carbofer General Trading SA - India
- Wilmar Investment Holdings
- Eastern Coal Council - USA
- Bukit Asam (Persero) Tbk - Indonesia
- Aditya Birla Group - India
- Orica Mining Services - Indonesia
- Uttam Galva Steels Limited - India
- Bharathi Cement Corporation - India
- Australian Coal Association
- PetroVietnam Power Coal Import and Supply Company
- Parliament of New Zealand
- CNBM International Corporation - China
- Goldman Sachs - Singapore
- Maharashtra Electricity Regulatory Commission - India
- Rashtriya Ispat Nigam Limited - India
- IHS Mccloskey Coal Group - USA
- Globalindo Alam Lestari - Indonesia
- Gujarat Sidhee Cement - India
- Attock Cement Pakistan Limited
- Petron Corporation, Philippines
- Tata Chemicals Ltd - India
- Salva Resources Pvt Ltd - India
- Savvy Resources Ltd - HongKong
- SN Aboitiz Power Inc, Philippines
- Global Coal Blending Company Limited - Australia
- Medco Energi Mining Internasional
- New Zealand Coal & Carbon
- Sical Logistics Limited - India
- Global Business Power Corporation, Philippines
- Therma Luzon, Inc, Philippines
- Latin American Coal - Colombia
- Standard Chartered Bank - UAE
- Commonwealth Bank - Australia
- Australian Commodity Traders Exchange
- Rio Tinto Coal - Australia
- The University of Queensland
- London Commodity Brokers - England
- Bahari Cakrawala Sebuku - Indonesia
- Kohat Cement Company Ltd. - Pakistan
- Kapuas Tunggal Persada - Indonesia
- Sarangani Energy Corporation, Philippines
- Pipit Mutiara Jaya. PT, Indonesia
- VISA Power Limited - India
- PNOC Exploration Corporation - Philippines
- Planning Commission, India
- Merrill Lynch Commodities Europe
- Sindya Power Generating Company Private Ltd
- Directorate General of MIneral and Coal - Indonesia
- GN Power Mariveles Coal Plant, Philippines
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Independent Power Producers Association of India
- Kaltim Prima Coal - Indonesia
- Indo Tambangraya Megah - Indonesia
- Borneo Indobara - Indonesia
- IEA Clean Coal Centre - UK
- Energy Link Ltd, New Zealand
- Straits Asia Resources Limited - Singapore
- The Treasury - Australian Government
- Intertek Mineral Services - Indonesia
- Baramulti Group, Indonesia
- European Bulk Services B.V. - Netherlands
- Heidelberg Cement - Germany
- Thiess Contractors Indonesia
- Metalloyd Limited - United Kingdom
- Formosa Plastics Group - Taiwan
- Mjunction Services Limited - India
- Kepco SPC Power Corporation, Philippines
- Vedanta Resources Plc - India
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Meralco Power Generation, Philippines
- Malabar Cements Ltd - India
- Neyveli Lignite Corporation Ltd, - India
- Jindal Steel & Power Ltd - India
- Cement Manufacturers Association - India
- Oldendorff Carriers - Singapore
- Larsen & Toubro Limited - India
- Chettinad Cement Corporation Ltd - India
- Bank of Tokyo Mitsubishi UFJ Ltd
- Antam Resourcindo - Indonesia
- Xindia Steels Limited - India
- Pendopo Energi Batubara - Indonesia
- Holcim Trading Pte Ltd - Singapore
- Gujarat Mineral Development Corp Ltd - India
- Cigading International Bulk Terminal - Indonesia
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Toyota Tsusho Corporation, Japan
- Ambuja Cements Ltd - India
- Binh Thuan Hamico - Vietnam
- Riau Bara Harum - Indonesia
- Interocean Group of Companies - India
- ICICI Bank Limited - India
- OPG Power Generation Pvt Ltd - India
- Power Finance Corporation Ltd., India
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