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Wednesday, 07 September 16
WEEKLY MARKET (TANKER) REPORT - INTERMODAL
 What goes around comes around! The Shipping industry is infamous for its seasonality and cyclicality and the tanker sector is no exception to these characteristics. Although trying to predict the market is never easy, digging into the fundamentals, along with the behavioral aspects that drive it, is probably the only way to go.
On one side there is the bear. There is no other factor more important than the actual demand for the physical commodity and its growth prospects have fallen behind expectations, as EIA’s data forecast the average price of Brent blend at $42/bbl for the current year and at $52/bbl for 2017. These numbers suggest that, despite its current short-term fluctuations between $40 and $50, crude oil market is in contango in the long-term. But the crucial factors that not only back-up these statements but also play their own role in dragging down the oil prices do not stop there. Add to the mix the excessive inventory building in both shore and floating tanks and the lower refinery margins and it would appear that the glut is here and is here to stay. Or is it?
On the other side there is the bull. Surprisingly, at the same time that the world’s biggest oil producer followed by Iran, Iraq and other OPEC members are pumping at historical record rates, the markets rallied from approximately $40 to almost $49 for an approximate 20% flat price increase in 7 trading days within August! Rational? No! Did it happen? It most certainly did! The lesson to be learned here is that even though the fundamentals may suggest a softening market, it only takes one statement from OPEC’s leading member to reverse the whole sentiment. “The situation will be discussed” said Saudi Arabia’s current minister and the markets obeyed.
To freeze or not to freeze? That is the million dollar question that the much anticipated OPEC meeting needs to answer for the markets to stabilize. However, it has already been proven that the statements of the cartel’s members are not always consistent with their actions and in this irrational market actions may not speak louder than words as record pumping rates firm the oil market instead of softening it!
But the uncertainty about the future does not stop at the primary crude oil market since the derivative oil product market closely follows its steps. An examination of the inventories in gasoline and diesel as benchmarks of the clean oil products across Europe, Asia and the USA reveals that these markets are also in contango. As a result, prices are pressured down with a direct impact to lower tanker rates for almost all the clean tanker segment. Furthermore, regional spreads that create arbitrage trading opportunities are diminishing, leading to lower rates for regional short-haul voyages performed by small tankers.
The most profound conclusion of the above is uncertainty in expectations, which results in volatility in both crude and product markets. These features are depicted in tanker rates, as the adverse conditions that exist in the oil markets surely enough spill over into the tanker markets. Thus, without owning the magic crystal ball, it would most probably be naïve to try to make a prediction about the future under current conditions. This situation may be a playground for oil traders who thrive on volatility, but a headache for tanker shipowners who may be called to tackle with another recession and try to ride the cycle one more time.
By Konstantinos Kakavitsas
Tanker Chartering
Compiled by:
Intermodal Research & Valuations
Analysts:
Ms. Eva Tzima
Disclaimer and legal disclosure: For any further queries please do not hesitate to contact our Research & Valuations Department. The information contained in this report has been obtained from various sources, as reported in the market. Intermodal Shipbrokers Co. believes such information to be factual and reliable without making guarantees regarding its accuracy or completeness. Whilst every care has been taken in the production of the above review, no liability can be accepted for any loss or damage incurred in any way whatsoever by any person who may seek to rely on the information and views contained in this material. This report is being produced for the internal use of the intended recipients only and no reproducing is allowed, without the prior written authorization of Intermodal Shipbrokers Co.
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Friday, 18 November 16
U.S. WEEKLY COAL PRODUCTION TOTALS 16.8 MMST, DOWN 0.8%, SAYS EIA
COALspot.com – U.S., the world’s second largest coal producers have produced approximately totalled an estimated 16.8 million short ton ...
Thursday, 17 November 16
FROTHY THERMAL COAL PRICES POINT TO DOWNSIDE PRESSURES IN 2017 - FITCH
Fitch Ratings says in an Outlook Report that the Asian thermal coal industry will remain under pressure in 2017 due to more-than-adequate capacity ...
Thursday, 17 November 16
CHINA STEEL EXPORTS TO REMAIN HIGH IN 2017, FITCH SAYS
Fitch Ratings expects Chinese steel exports to remain at around 100 million metric tons (Mt) in 2017, due to flat 'apparent' consumption an ...
Wednesday, 16 November 16
SHIPPING MARKET INSIGHT
Going through a relatively interesting second half of the year so far in the ship repair sector, we are experiencing a volatile climate of differen ...
Tuesday, 15 November 16
CHINA, FOR MANY YEARS NOW HAS SERVED AS A MAJOR GROWTH ENGINE FOR ASIA - ALLIED SHIPPING RESEARCH
It’s been a turbulent couple of days after the announcement of the U.S. Presidential results in the early hours of Wednesday.
After week ...
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- GN Power Mariveles Coal Plant, Philippines
- MS Steel International - UAE
- Vizag Seaport Private Limited - India
- Xindia Steels Limited - India
- Cigading International Bulk Terminal - Indonesia
- Semirara Mining Corp, Philippines
- Metalloyd Limited - United Kingdom
- Larsen & Toubro Limited - India
- CIMB Investment Bank - Malaysia
- Indian Oil Corporation Limited
- International Coal Ventures Pvt Ltd - India
- Sinarmas Energy and Mining - Indonesia
- Essar Steel Hazira Ltd - India
- Bhatia International Limited - India
- Vijayanagar Sugar Pvt Ltd - India
- Gujarat Mineral Development Corp Ltd - India
- Agrawal Coal Company - India
- Tata Chemicals Ltd - India
- Kapuas Tunggal Persada - Indonesia
- TNB Fuel Sdn Bhd - Malaysia
- McConnell Dowell - Australia
- Minerals Council of Australia
- SN Aboitiz Power Inc, Philippines
- Georgia Ports Authority, United States
- Ministry of Transport, Egypt
- London Commodity Brokers - England
- Wood Mackenzie - Singapore
- Samtan Co., Ltd - South Korea
- Thai Mozambique Logistica
- GMR Energy Limited - India
- Bulk Trading Sa - Switzerland
- Australian Coal Association
- Indika Energy - Indonesia
- Savvy Resources Ltd - HongKong
- Bhushan Steel Limited - India
- LBH Netherlands Bv - Netherlands
- Bahari Cakrawala Sebuku - Indonesia
- Latin American Coal - Colombia
- Global Business Power Corporation, Philippines
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Attock Cement Pakistan Limited
- Kobexindo Tractors - Indoneisa
- San Jose City I Power Corp, Philippines
- Bangladesh Power Developement Board
- Petron Corporation, Philippines
- Sojitz Corporation - Japan
- Grasim Industreis Ltd - India
- White Energy Company Limited
- PTC India Limited - India
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Mintek Dendrill Indonesia
- Semirara Mining and Power Corporation, Philippines
- Parry Sugars Refinery, India
- Ind-Barath Power Infra Limited - India
- Timah Investasi Mineral - Indoneisa
- PetroVietnam Power Coal Import and Supply Company
- Salva Resources Pvt Ltd - India
- GVK Power & Infra Limited - India
- Gujarat Electricity Regulatory Commission - India
- Kalimantan Lumbung Energi - Indonesia
- Price Waterhouse Coopers - Russia
- The University of Queensland
- Bhoruka Overseas - Indonesia
- Alfred C Toepfer International GmbH - Germany
- Coalindo Energy - Indonesia
- Central Java Power - Indonesia
- Indian Energy Exchange, India
- European Bulk Services B.V. - Netherlands
- Power Finance Corporation Ltd., India
- Dalmia Cement Bharat India
- SMC Global Power, Philippines
- Kepco SPC Power Corporation, Philippines
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Jindal Steel & Power Ltd - India
- Trasteel International SA, Italy
- Independent Power Producers Association of India
- ASAPP Information Group - India
- Sakthi Sugars Limited - India
- Karaikal Port Pvt Ltd - India
- Goldman Sachs - Singapore
- Bharathi Cement Corporation - India
- Australian Commodity Traders Exchange
- Anglo American - United Kingdom
- Chettinad Cement Corporation Ltd - India
- Port Waratah Coal Services - Australia
- Kohat Cement Company Ltd. - Pakistan
- Aboitiz Power Corporation - Philippines
- Tamil Nadu electricity Board
- Karbindo Abesyapradhi - Indoneisa
- Meenaskhi Energy Private Limited - India
- Simpson Spence & Young - Indonesia
- South Luzon Thermal Energy Corporation
- Kaltim Prima Coal - Indonesia
- IEA Clean Coal Centre - UK
- Bukit Makmur.PT - Indonesia
- Thiess Contractors Indonesia
- Bukit Baiduri Energy - Indonesia
- Electricity Authority, New Zealand
- AsiaOL BioFuels Corp., Philippines
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Malabar Cements Ltd - India
- Baramulti Group, Indonesia
- Singapore Mercantile Exchange
- Rashtriya Ispat Nigam Limited - India
- Iligan Light & Power Inc, Philippines
- Commonwealth Bank - Australia
- Petrochimia International Co. Ltd.- Taiwan
- Kideco Jaya Agung - Indonesia
- Bayan Resources Tbk. - Indonesia
- SMG Consultants - Indonesia
- Indo Tambangraya Megah - Indonesia
- Indonesian Coal Mining Association
- Vedanta Resources Plc - India
- TeaM Sual Corporation - Philippines
- Parliament of New Zealand
- Jorong Barutama Greston.PT - Indonesia
- Orica Australia Pty. Ltd.
- Directorate General of MIneral and Coal - Indonesia
- Central Electricity Authority - India
- Antam Resourcindo - Indonesia
- ICICI Bank Limited - India
- Ceylon Electricity Board - Sri Lanka
- GAC Shipping (India) Pvt Ltd
- Pendopo Energi Batubara - Indonesia
- Indogreen Group - Indonesia
- Aditya Birla Group - India
- Siam City Cement - Thailand
- Siam City Cement PLC, Thailand
- Africa Commodities Group - South Africa
- Mercuria Energy - Indonesia
- Marubeni Corporation - India
- Intertek Mineral Services - Indonesia
- Orica Mining Services - Indonesia
- Carbofer General Trading SA - India
- The State Trading Corporation of India Ltd
- Energy Link Ltd, New Zealand
- Ministry of Mines - Canada
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Borneo Indobara - Indonesia
- Barasentosa Lestari - Indonesia
- Madhucon Powers Ltd - India
- Eastern Coal Council - USA
- Bukit Asam (Persero) Tbk - Indonesia
- OPG Power Generation Pvt Ltd - India
- Romanian Commodities Exchange
- Energy Development Corp, Philippines
- Chamber of Mines of South Africa
- CNBM International Corporation - China
- Formosa Plastics Group - Taiwan
- India Bulls Power Limited - India
- Wilmar Investment Holdings
- Interocean Group of Companies - India
- Offshore Bulk Terminal Pte Ltd, Singapore
- Sree Jayajothi Cements Limited - India
- Jaiprakash Power Ventures ltd
- Standard Chartered Bank - UAE
- VISA Power Limited - India
- Deloitte Consulting - India
- Planning Commission, India
- Meralco Power Generation, Philippines
- New Zealand Coal & Carbon
- Straits Asia Resources Limited - Singapore
- Merrill Lynch Commodities Europe
- Coal and Oil Company - UAE
- Leighton Contractors Pty Ltd - Australia
- Bank of Tokyo Mitsubishi UFJ Ltd
- Gujarat Sidhee Cement - India
- Star Paper Mills Limited - India
- Electricity Generating Authority of Thailand
- Posco Energy - South Korea
- Global Green Power PLC Corporation, Philippines
- Kumho Petrochemical, South Korea
- Makarim & Taira - Indonesia
- Mjunction Services Limited - India
- Holcim Trading Pte Ltd - Singapore
- Neyveli Lignite Corporation Ltd, - India
- Manunggal Multi Energi - Indonesia
- Sical Logistics Limited - India
- Ambuja Cements Ltd - India
- Altura Mining Limited, Indonesia
- Medco Energi Mining Internasional
- Maheswari Brothers Coal Limited - India
- Banpu Public Company Limited - Thailand
- Cement Manufacturers Association - India
- Videocon Industries ltd - India
- Oldendorff Carriers - Singapore
- Pipit Mutiara Jaya. PT, Indonesia
- Sindya Power Generating Company Private Ltd
- PNOC Exploration Corporation - Philippines
- Uttam Galva Steels Limited - India
- Ministry of Finance - Indonesia
- Globalindo Alam Lestari - Indonesia
- Asmin Koalindo Tuhup - Indonesia
- Kartika Selabumi Mining - Indonesia
- IHS Mccloskey Coal Group - USA
- Toyota Tsusho Corporation, Japan
- Global Coal Blending Company Limited - Australia
- Heidelberg Cement - Germany
- Coastal Gujarat Power Limited - India
- Directorate Of Revenue Intelligence - India
- The Treasury - Australian Government
- PowerSource Philippines DevCo
- Billiton Holdings Pty Ltd - Australia
- Binh Thuan Hamico - Vietnam
- Economic Council, Georgia
- Maharashtra Electricity Regulatory Commission - India
- Therma Luzon, Inc, Philippines
- Eastern Energy - Thailand
- Miang Besar Coal Terminal - Indonesia
- Sarangani Energy Corporation, Philippines
- Rio Tinto Coal - Australia
- Edison Trading Spa - Italy
- Krishnapatnam Port Company Ltd. - India
- Riau Bara Harum - Indonesia
- Mercator Lines Limited - India
- Lanco Infratech Ltd - India
- Renaissance Capital - South Africa
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