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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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Thursday, 27 October 16
PANAMAX: FIRM ATLANTIC; TOPPISH PACIFIC - FEARNLEYS
Supramax
The trend from last week is passed on. ECSA still strong with Supras from N Brazil to Med fixed at $9,000 to $9,500 daily.
Accordin ...
Wednesday, 26 October 16
SHIPPING MARKET INSIGHT - KONSTANTINOS KONTOMICHIS
If the finale of a thriller movie finds the leading actor successfully surviving after all the sacrifices he has made, the audience presumes this t ...
Tuesday, 25 October 16
INDONESIAN COAL PRICES MARCH HIGHER CONTINUES
COALspot.com: A rally in thermal coal prices over the past few months, after years of decline, is still continuing and it is expected to rally at l ...
Tuesday, 25 October 16
THINGS ARE SLOWLY STARTING TO IMPROVE AS CORRECTIONS ARE MADE - ALLIED
It seems as though left, right and centre, all we see nowadays is the word “restructuring”.
There is restructuring amongst bankers ...
Monday, 24 October 16
KOMIPO INVITES BIDS FOR 0.78 MILLION TONS OF BITUMINOUS COAL
COALspot.com: South Korea state-owned utility Korea Midland Power (KOMIPO) issued a new tender for 780,000 Metric Tons of Bituminous Coal for its B ...
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- Gujarat Mineral Development Corp Ltd - India
- Mjunction Services Limited - India
- Carbofer General Trading SA - India
- IEA Clean Coal Centre - UK
- ICICI Bank Limited - India
- Ministry of Finance - Indonesia
- Ambuja Cements Ltd - India
- Port Waratah Coal Services - Australia
- Jorong Barutama Greston.PT - Indonesia
- Semirara Mining and Power Corporation, Philippines
- Indian Energy Exchange, India
- Toyota Tsusho Corporation, Japan
- PowerSource Philippines DevCo
- Indika Energy - Indonesia
- Ministry of Transport, Egypt
- Interocean Group of Companies - India
- Gujarat Electricity Regulatory Commission - India
- GAC Shipping (India) Pvt Ltd
- Sojitz Corporation - Japan
- Planning Commission, India
- Straits Asia Resources Limited - Singapore
- Chamber of Mines of South Africa
- The University of Queensland
- Bukit Makmur.PT - Indonesia
- Jindal Steel & Power Ltd - India
- Maharashtra Electricity Regulatory Commission - India
- GN Power Mariveles Coal Plant, Philippines
- Holcim Trading Pte Ltd - Singapore
- Essar Steel Hazira Ltd - India
- Anglo American - United Kingdom
- Australian Coal Association
- Tata Chemicals Ltd - India
- Singapore Mercantile Exchange
- Orica Mining Services - Indonesia
- Sakthi Sugars Limited - India
- Banpu Public Company Limited - Thailand
- Pendopo Energi Batubara - Indonesia
- Intertek Mineral Services - Indonesia
- Heidelberg Cement - Germany
- Siam City Cement PLC, Thailand
- Bukit Asam (Persero) Tbk - Indonesia
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Global Green Power PLC Corporation, Philippines
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Orica Australia Pty. Ltd.
- Bharathi Cement Corporation - India
- Meralco Power Generation, Philippines
- Merrill Lynch Commodities Europe
- Agrawal Coal Company - India
- VISA Power Limited - India
- Manunggal Multi Energi - Indonesia
- Kideco Jaya Agung - Indonesia
- San Jose City I Power Corp, Philippines
- Meenaskhi Energy Private Limited - India
- Attock Cement Pakistan Limited
- Rio Tinto Coal - Australia
- Riau Bara Harum - Indonesia
- Savvy Resources Ltd - HongKong
- Goldman Sachs - Singapore
- Krishnapatnam Port Company Ltd. - India
- Thai Mozambique Logistica
- Trasteel International SA, Italy
- Bank of Tokyo Mitsubishi UFJ Ltd
- The State Trading Corporation of India Ltd
- SMC Global Power, Philippines
- Miang Besar Coal Terminal - Indonesia
- Timah Investasi Mineral - Indoneisa
- MS Steel International - UAE
- Mercator Lines Limited - India
- Barasentosa Lestari - Indonesia
- Bhoruka Overseas - Indonesia
- New Zealand Coal & Carbon
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Wood Mackenzie - Singapore
- Commonwealth Bank - Australia
- Antam Resourcindo - Indonesia
- Energy Development Corp, Philippines
- Eastern Energy - Thailand
- Uttam Galva Steels Limited - India
- White Energy Company Limited
- South Luzon Thermal Energy Corporation
- Maheswari Brothers Coal Limited - India
- Kaltim Prima Coal - Indonesia
- CIMB Investment Bank - Malaysia
- Kartika Selabumi Mining - Indonesia
- Vizag Seaport Private Limited - India
- Ceylon Electricity Board - Sri Lanka
- Pipit Mutiara Jaya. PT, Indonesia
- Iligan Light & Power Inc, Philippines
- Directorate Of Revenue Intelligence - India
- India Bulls Power Limited - India
- Bulk Trading Sa - Switzerland
- Ministry of Mines - Canada
- Indonesian Coal Mining Association
- Indo Tambangraya Megah - Indonesia
- PTC India Limited - India
- Parry Sugars Refinery, India
- Sical Logistics Limited - India
- Gujarat Sidhee Cement - India
- Jaiprakash Power Ventures ltd
- Ind-Barath Power Infra Limited - India
- ASAPP Information Group - India
- Global Coal Blending Company Limited - Australia
- Madhucon Powers Ltd - India
- Mintek Dendrill Indonesia
- Bhushan Steel Limited - India
- Sindya Power Generating Company Private Ltd
- Rashtriya Ispat Nigam Limited - India
- Formosa Plastics Group - Taiwan
- LBH Netherlands Bv - Netherlands
- The Treasury - Australian Government
- Malabar Cements Ltd - India
- Coal and Oil Company - UAE
- Larsen & Toubro Limited - India
- Petrochimia International Co. Ltd.- Taiwan
- European Bulk Services B.V. - Netherlands
- Parliament of New Zealand
- Minerals Council of Australia
- Tamil Nadu electricity Board
- Posco Energy - South Korea
- Samtan Co., Ltd - South Korea
- Grasim Industreis Ltd - India
- Karaikal Port Pvt Ltd - India
- Latin American Coal - Colombia
- Kohat Cement Company Ltd. - Pakistan
- Deloitte Consulting - India
- Medco Energi Mining Internasional
- SN Aboitiz Power Inc, Philippines
- Videocon Industries ltd - India
- Bukit Baiduri Energy - Indonesia
- Borneo Indobara - Indonesia
- Simpson Spence & Young - Indonesia
- Mercuria Energy - Indonesia
- GMR Energy Limited - India
- Salva Resources Pvt Ltd - India
- Electricity Generating Authority of Thailand
- Metalloyd Limited - United Kingdom
- Baramulti Group, Indonesia
- Romanian Commodities Exchange
- Cement Manufacturers Association - India
- Economic Council, Georgia
- CNBM International Corporation - China
- Lanco Infratech Ltd - India
- Independent Power Producers Association of India
- Indogreen Group - Indonesia
- Africa Commodities Group - South Africa
- Sarangani Energy Corporation, Philippines
- Binh Thuan Hamico - Vietnam
- Indian Oil Corporation Limited
- Australian Commodity Traders Exchange
- Kobexindo Tractors - Indoneisa
- Xindia Steels Limited - India
- Sree Jayajothi Cements Limited - India
- Altura Mining Limited, Indonesia
- Neyveli Lignite Corporation Ltd, - India
- Aditya Birla Group - India
- Kumho Petrochemical, South Korea
- Billiton Holdings Pty Ltd - Australia
- Offshore Bulk Terminal Pte Ltd, Singapore
- Dalmia Cement Bharat India
- Chettinad Cement Corporation Ltd - India
- PNOC Exploration Corporation - Philippines
- Alfred C Toepfer International GmbH - Germany
- SMG Consultants - Indonesia
- AsiaOL BioFuels Corp., Philippines
- Electricity Authority, New Zealand
- Siam City Cement - Thailand
- Marubeni Corporation - India
- Thiess Contractors Indonesia
- TeaM Sual Corporation - Philippines
- Star Paper Mills Limited - India
- Asmin Koalindo Tuhup - Indonesia
- GVK Power & Infra Limited - India
- Bayan Resources Tbk. - Indonesia
- Wilmar Investment Holdings
- Eastern Coal Council - USA
- Power Finance Corporation Ltd., India
- Sinarmas Energy and Mining - Indonesia
- Central Electricity Authority - India
- Kepco SPC Power Corporation, Philippines
- Bangladesh Power Developement Board
- Bahari Cakrawala Sebuku - Indonesia
- PetroVietnam Power Coal Import and Supply Company
- Coastal Gujarat Power Limited - India
- Therma Luzon, Inc, Philippines
- International Coal Ventures Pvt Ltd - India
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Leighton Contractors Pty Ltd - Australia
- Georgia Ports Authority, United States
- Makarim & Taira - Indonesia
- Vijayanagar Sugar Pvt Ltd - India
- Price Waterhouse Coopers - Russia
- Vedanta Resources Plc - India
- TNB Fuel Sdn Bhd - Malaysia
- Coalindo Energy - Indonesia
- Kapuas Tunggal Persada - Indonesia
- Oldendorff Carriers - Singapore
- Aboitiz Power Corporation - Philippines
- Cigading International Bulk Terminal - Indonesia
- IHS Mccloskey Coal Group - USA
- Kalimantan Lumbung Energi - Indonesia
- McConnell Dowell - Australia
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Semirara Mining Corp, Philippines
- Petron Corporation, Philippines
- Globalindo Alam Lestari - Indonesia
- Energy Link Ltd, New Zealand
- Bhatia International Limited - India
- London Commodity Brokers - England
- Global Business Power Corporation, Philippines
- Edison Trading Spa - Italy
- Renaissance Capital - South Africa
- OPG Power Generation Pvt Ltd - India
- Central Java Power - Indonesia
- Karbindo Abesyapradhi - Indoneisa
- Standard Chartered Bank - UAE
- Directorate General of MIneral and Coal - Indonesia
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