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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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Wednesday, 30 September 15
Q1'16 FOB INDONESIA COAL SWAP FALLS $1.25 A TON AS SLIDE CONTINUES
COALspot.com: Indonesian coal swap for delivery Q4 2015 declined month on month and week over week.
The Q4 swap declined $ 0.72 (-1.78%) per t ...
Wednesday, 30 September 15
NEW BUILDING MARKET INSIGHT
COALspot.com: This year has been, beyond any doubt, a rather strenuous one for the newbuilding market. Ordering activity with regards to Dry Bulker ...
Tuesday, 29 September 15
FOB RICHARDS BAY COAL SWAPS ARE SLIDING
COALspot.com: API4 FOB Richards Bay Coal swap for delivery Q4' 2015 declined week over week and month over month.
The Q4 swap was down US$ ...
Monday, 28 September 15
API 5 FOB NEWCASTLE COAL SWAPS UP $2.15 IN ONE MONTH
COALspot.com: API 5 FOB Newcastle Coal swap for Q4’ 2015 delivery increased $2.10 per ton (5.15%) month over month to US$ 42.93 per ton. The ...
Monday, 28 September 15
CAPESIZE FLEET INCREASES BY JUST 1 VESSEL DURING LAST 12 MONTHS, IN POSITIVE SIGN FOR DRY BULK SHIPPING MARKET - NIKOS ROUSSANOGLOU, HELLENIC SHIPPING NEWS
After a rather tumultuous period, the shipping industry and more particular the dry bulk market has started to adjust to the new realities of globa ...
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- Australian Commodity Traders Exchange
- Power Finance Corporation Ltd., India
- Kepco SPC Power Corporation, Philippines
- London Commodity Brokers - England
- Standard Chartered Bank - UAE
- Straits Asia Resources Limited - Singapore
- Altura Mining Limited, Indonesia
- Bahari Cakrawala Sebuku - Indonesia
- Kumho Petrochemical, South Korea
- Bukit Baiduri Energy - Indonesia
- Meenaskhi Energy Private Limited - India
- Maheswari Brothers Coal Limited - India
- Mercuria Energy - Indonesia
- Madhucon Powers Ltd - India
- Cement Manufacturers Association - India
- Borneo Indobara - Indonesia
- Interocean Group of Companies - India
- Grasim Industreis Ltd - India
- Indian Energy Exchange, India
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Uttam Galva Steels Limited - India
- Latin American Coal - Colombia
- International Coal Ventures Pvt Ltd - India
- Bukit Makmur.PT - Indonesia
- Meralco Power Generation, Philippines
- Gujarat Electricity Regulatory Commission - India
- San Jose City I Power Corp, Philippines
- Banpu Public Company Limited - Thailand
- Miang Besar Coal Terminal - Indonesia
- Global Green Power PLC Corporation, Philippines
- Oldendorff Carriers - Singapore
- Independent Power Producers Association of India
- Mercator Lines Limited - India
- Manunggal Multi Energi - Indonesia
- Bangladesh Power Developement Board
- Therma Luzon, Inc, Philippines
- Sakthi Sugars Limited - India
- Kalimantan Lumbung Energi - Indonesia
- Agrawal Coal Company - India
- Globalindo Alam Lestari - Indonesia
- Medco Energi Mining Internasional
- Larsen & Toubro Limited - India
- Energy Development Corp, Philippines
- IEA Clean Coal Centre - UK
- Ministry of Finance - Indonesia
- GVK Power & Infra Limited - India
- Vijayanagar Sugar Pvt Ltd - India
- Indika Energy - Indonesia
- Rio Tinto Coal - Australia
- Cigading International Bulk Terminal - Indonesia
- Kobexindo Tractors - Indoneisa
- Central Electricity Authority - India
- Semirara Mining and Power Corporation, Philippines
- Samtan Co., Ltd - South Korea
- Karaikal Port Pvt Ltd - India
- Carbofer General Trading SA - India
- Leighton Contractors Pty Ltd - Australia
- Ind-Barath Power Infra Limited - India
- Kaltim Prima Coal - Indonesia
- Offshore Bulk Terminal Pte Ltd, Singapore
- Riau Bara Harum - Indonesia
- Bank of Tokyo Mitsubishi UFJ Ltd
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Heidelberg Cement - Germany
- GN Power Mariveles Coal Plant, Philippines
- Indonesian Coal Mining Association
- Parliament of New Zealand
- Indogreen Group - Indonesia
- Parry Sugars Refinery, India
- Vizag Seaport Private Limited - India
- Georgia Ports Authority, United States
- Mintek Dendrill Indonesia
- Pipit Mutiara Jaya. PT, Indonesia
- Posco Energy - South Korea
- Orica Mining Services - Indonesia
- Thai Mozambique Logistica
- Chamber of Mines of South Africa
- Iligan Light & Power Inc, Philippines
- OPG Power Generation Pvt Ltd - India
- Orica Australia Pty. Ltd.
- Wood Mackenzie - Singapore
- Essar Steel Hazira Ltd - India
- Holcim Trading Pte Ltd - Singapore
- Ministry of Mines - Canada
- Bhushan Steel Limited - India
- Barasentosa Lestari - Indonesia
- Xindia Steels Limited - India
- LBH Netherlands Bv - Netherlands
- SMG Consultants - Indonesia
- Ceylon Electricity Board - Sri Lanka
- Maharashtra Electricity Regulatory Commission - India
- Port Waratah Coal Services - Australia
- Coal and Oil Company - UAE
- Sinarmas Energy and Mining - Indonesia
- Directorate Of Revenue Intelligence - India
- AsiaOL BioFuels Corp., Philippines
- SN Aboitiz Power Inc, Philippines
- Price Waterhouse Coopers - Russia
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Economic Council, Georgia
- Gujarat Sidhee Cement - India
- The Treasury - Australian Government
- Sojitz Corporation - Japan
- Jorong Barutama Greston.PT - Indonesia
- Thiess Contractors Indonesia
- Kohat Cement Company Ltd. - Pakistan
- Wilmar Investment Holdings
- PowerSource Philippines DevCo
- Asmin Koalindo Tuhup - Indonesia
- India Bulls Power Limited - India
- Rashtriya Ispat Nigam Limited - India
- ICICI Bank Limited - India
- Bulk Trading Sa - Switzerland
- Tamil Nadu electricity Board
- Tata Chemicals Ltd - India
- Jindal Steel & Power Ltd - India
- TNB Fuel Sdn Bhd - Malaysia
- Eastern Energy - Thailand
- Semirara Mining Corp, Philippines
- Malabar Cements Ltd - India
- PNOC Exploration Corporation - Philippines
- Bayan Resources Tbk. - Indonesia
- Energy Link Ltd, New Zealand
- Petron Corporation, Philippines
- GMR Energy Limited - India
- White Energy Company Limited
- Jaiprakash Power Ventures ltd
- New Zealand Coal & Carbon
- Intertek Mineral Services - Indonesia
- Dalmia Cement Bharat India
- Mjunction Services Limited - India
- SMC Global Power, Philippines
- Indo Tambangraya Megah - Indonesia
- CIMB Investment Bank - Malaysia
- Sical Logistics Limited - India
- Sindya Power Generating Company Private Ltd
- Baramulti Group, Indonesia
- IHS Mccloskey Coal Group - USA
- Commonwealth Bank - Australia
- Vedanta Resources Plc - India
- Coalindo Energy - Indonesia
- ASAPP Information Group - India
- Trasteel International SA, Italy
- Bhatia International Limited - India
- Minerals Council of Australia
- Planning Commission, India
- Aditya Birla Group - India
- MS Steel International - UAE
- South Luzon Thermal Energy Corporation
- Bhoruka Overseas - Indonesia
- Sree Jayajothi Cements Limited - India
- Global Coal Blending Company Limited - Australia
- Metalloyd Limited - United Kingdom
- VISA Power Limited - India
- Attock Cement Pakistan Limited
- Neyveli Lignite Corporation Ltd, - India
- Savvy Resources Ltd - HongKong
- Renaissance Capital - South Africa
- Videocon Industries ltd - India
- Pendopo Energi Batubara - Indonesia
- McConnell Dowell - Australia
- Karbindo Abesyapradhi - Indoneisa
- Anglo American - United Kingdom
- CNBM International Corporation - China
- Binh Thuan Hamico - Vietnam
- Gujarat Mineral Development Corp Ltd - India
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- The State Trading Corporation of India Ltd
- TeaM Sual Corporation - Philippines
- PetroVietnam Power Coal Import and Supply Company
- Krishnapatnam Port Company Ltd. - India
- Australian Coal Association
- Sarangani Energy Corporation, Philippines
- Salva Resources Pvt Ltd - India
- Ambuja Cements Ltd - India
- Coastal Gujarat Power Limited - India
- Kapuas Tunggal Persada - Indonesia
- Electricity Generating Authority of Thailand
- Central Java Power - Indonesia
- Petrochimia International Co. Ltd.- Taiwan
- Simpson Spence & Young - Indonesia
- Alfred C Toepfer International GmbH - Germany
- Bharathi Cement Corporation - India
- Edison Trading Spa - Italy
- Star Paper Mills Limited - India
- Chettinad Cement Corporation Ltd - India
- Directorate General of MIneral and Coal - Indonesia
- Formosa Plastics Group - Taiwan
- Merrill Lynch Commodities Europe
- PTC India Limited - India
- Antam Resourcindo - Indonesia
- Electricity Authority, New Zealand
- Lanco Infratech Ltd - India
- Singapore Mercantile Exchange
- Aboitiz Power Corporation - Philippines
- Goldman Sachs - Singapore
- Kartika Selabumi Mining - Indonesia
- Eastern Coal Council - USA
- GAC Shipping (India) Pvt Ltd
- Indian Oil Corporation Limited
- Bukit Asam (Persero) Tbk - Indonesia
- Billiton Holdings Pty Ltd - Australia
- Siam City Cement PLC, Thailand
- Romanian Commodities Exchange
- Makarim & Taira - Indonesia
- Toyota Tsusho Corporation, Japan
- The University of Queensland
- Global Business Power Corporation, Philippines
- Timah Investasi Mineral - Indoneisa
- Kideco Jaya Agung - Indonesia
- Siam City Cement - Thailand
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Deloitte Consulting - India
- Ministry of Transport, Egypt
- European Bulk Services B.V. - Netherlands
- Marubeni Corporation - India
- Africa Commodities Group - South Africa
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