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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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Wednesday, 12 October 16
MARKET INSIGHT - LINOS KOGEVINAS
Another Monday has gone by, bringing with it further turbulence for oil. A series of meetings between high-production nations Russia & Saudi Ar ...
Wednesday, 12 October 16
INDIAN STEELMAKERS' DELEVERAGING AT RISK ON COKING COAL PRICE JUMP - FITCH
The sharp increase in coking coal prices since August 2016 could squeeze Indian steelmakers' profitability and threaten their deleveraging, Fit ...
Wednesday, 12 October 16
UK SEABORNE COAL IMPORT PLUNGES 64% AS A WORRYING TREND LURKS - BIMCO
The main exporters of thermal coal for coal- fired power plants to the United Kingdom (UK) have experienced a heavy decline in seaborne cargo volum ...
Monday, 10 October 16
INDONESIAN COAL PRICE REFERENCE HITS HIGHEST LEVELS SINCE SEPTEMBER 2014
COALspot.com: The Indonesia coal benchmark price hits to its highest level since September 2014. The government declared benchmark prices for Indon ...
Monday, 10 October 16
THE FREIGHT MARKET FIRMS UP ON STRONG CAPE PERFORMANCE
COALspot.com: The Baltic Exchange, tracking rates for ships carrying dry bulk commodities rose again and ending in a positive note this past week. ...
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- Sree Jayajothi Cements Limited - India
- Grasim Industreis Ltd - India
- Bahari Cakrawala Sebuku - Indonesia
- Mjunction Services Limited - India
- White Energy Company Limited
- Jorong Barutama Greston.PT - Indonesia
- Planning Commission, India
- Power Finance Corporation Ltd., India
- Price Waterhouse Coopers - Russia
- Eastern Energy - Thailand
- The Treasury - Australian Government
- McConnell Dowell - Australia
- Energy Link Ltd, New Zealand
- Merrill Lynch Commodities Europe
- Central Java Power - Indonesia
- Rio Tinto Coal - Australia
- PTC India Limited - India
- Siam City Cement PLC, Thailand
- Kaltim Prima Coal - Indonesia
- Salva Resources Pvt Ltd - India
- Madhucon Powers Ltd - India
- Indo Tambangraya Megah - Indonesia
- London Commodity Brokers - England
- GN Power Mariveles Coal Plant, Philippines
- GAC Shipping (India) Pvt Ltd
- Bukit Baiduri Energy - Indonesia
- Alfred C Toepfer International GmbH - Germany
- Gujarat Mineral Development Corp Ltd - India
- Formosa Plastics Group - Taiwan
- Wilmar Investment Holdings
- Sarangani Energy Corporation, Philippines
- Globalindo Alam Lestari - Indonesia
- Semirara Mining Corp, Philippines
- Georgia Ports Authority, United States
- Heidelberg Cement - Germany
- Kapuas Tunggal Persada - Indonesia
- Vedanta Resources Plc - India
- Medco Energi Mining Internasional
- TNB Fuel Sdn Bhd - Malaysia
- Holcim Trading Pte Ltd - Singapore
- Therma Luzon, Inc, Philippines
- Indonesian Coal Mining Association
- Pipit Mutiara Jaya. PT, Indonesia
- Indika Energy - Indonesia
- PetroVietnam Power Coal Import and Supply Company
- Vijayanagar Sugar Pvt Ltd - India
- Maheswari Brothers Coal Limited - India
- Jaiprakash Power Ventures ltd
- Romanian Commodities Exchange
- Ministry of Finance - Indonesia
- SMC Global Power, Philippines
- Aboitiz Power Corporation - Philippines
- San Jose City I Power Corp, Philippines
- Mintek Dendrill Indonesia
- Thai Mozambique Logistica
- Sical Logistics Limited - India
- Semirara Mining and Power Corporation, Philippines
- Ceylon Electricity Board - Sri Lanka
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Petron Corporation, Philippines
- PNOC Exploration Corporation - Philippines
- Agrawal Coal Company - India
- Miang Besar Coal Terminal - Indonesia
- Bank of Tokyo Mitsubishi UFJ Ltd
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- New Zealand Coal & Carbon
- Mercator Lines Limited - India
- PowerSource Philippines DevCo
- Global Green Power PLC Corporation, Philippines
- Attock Cement Pakistan Limited
- Makarim & Taira - Indonesia
- CNBM International Corporation - China
- TeaM Sual Corporation - Philippines
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Iligan Light & Power Inc, Philippines
- Maharashtra Electricity Regulatory Commission - India
- Orica Australia Pty. Ltd.
- Aditya Birla Group - India
- Indian Oil Corporation Limited
- Port Waratah Coal Services - Australia
- Parry Sugars Refinery, India
- Bharathi Cement Corporation - India
- Ministry of Mines - Canada
- Baramulti Group, Indonesia
- Sojitz Corporation - Japan
- Australian Commodity Traders Exchange
- Kalimantan Lumbung Energi - Indonesia
- Kobexindo Tractors - Indoneisa
- Metalloyd Limited - United Kingdom
- ICICI Bank Limited - India
- Larsen & Toubro Limited - India
- Xindia Steels Limited - India
- Uttam Galva Steels Limited - India
- Energy Development Corp, Philippines
- LBH Netherlands Bv - Netherlands
- Tata Chemicals Ltd - India
- Kepco SPC Power Corporation, Philippines
- Oldendorff Carriers - Singapore
- South Luzon Thermal Energy Corporation
- Intertek Mineral Services - Indonesia
- MS Steel International - UAE
- Posco Energy - South Korea
- Parliament of New Zealand
- Simpson Spence & Young - Indonesia
- International Coal Ventures Pvt Ltd - India
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Edison Trading Spa - Italy
- Karbindo Abesyapradhi - Indoneisa
- Carbofer General Trading SA - India
- VISA Power Limited - India
- Barasentosa Lestari - Indonesia
- Meralco Power Generation, Philippines
- Latin American Coal - Colombia
- Bulk Trading Sa - Switzerland
- Gujarat Sidhee Cement - India
- Sindya Power Generating Company Private Ltd
- Toyota Tsusho Corporation, Japan
- India Bulls Power Limited - India
- Global Business Power Corporation, Philippines
- Karaikal Port Pvt Ltd - India
- Videocon Industries ltd - India
- ASAPP Information Group - India
- Neyveli Lignite Corporation Ltd, - India
- Altura Mining Limited, Indonesia
- Standard Chartered Bank - UAE
- Kohat Cement Company Ltd. - Pakistan
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Jindal Steel & Power Ltd - India
- Goldman Sachs - Singapore
- Samtan Co., Ltd - South Korea
- Trasteel International SA, Italy
- Commonwealth Bank - Australia
- Interocean Group of Companies - India
- Indian Energy Exchange, India
- Bukit Asam (Persero) Tbk - Indonesia
- Pendopo Energi Batubara - Indonesia
- Tamil Nadu electricity Board
- Electricity Generating Authority of Thailand
- Anglo American - United Kingdom
- Australian Coal Association
- Independent Power Producers Association of India
- Global Coal Blending Company Limited - Australia
- Asmin Koalindo Tuhup - Indonesia
- Coastal Gujarat Power Limited - India
- Directorate General of MIneral and Coal - Indonesia
- Bhushan Steel Limited - India
- Riau Bara Harum - Indonesia
- OPG Power Generation Pvt Ltd - India
- Kideco Jaya Agung - Indonesia
- Ambuja Cements Ltd - India
- Petrochimia International Co. Ltd.- Taiwan
- The State Trading Corporation of India Ltd
- Billiton Holdings Pty Ltd - Australia
- Orica Mining Services - Indonesia
- Central Electricity Authority - India
- SMG Consultants - Indonesia
- Bhatia International Limited - India
- Kartika Selabumi Mining - Indonesia
- Borneo Indobara - Indonesia
- Economic Council, Georgia
- Antam Resourcindo - Indonesia
- European Bulk Services B.V. - Netherlands
- Sinarmas Energy and Mining - Indonesia
- Chettinad Cement Corporation Ltd - India
- Bhoruka Overseas - Indonesia
- Indogreen Group - Indonesia
- SN Aboitiz Power Inc, Philippines
- Sakthi Sugars Limited - India
- Dalmia Cement Bharat India
- Vizag Seaport Private Limited - India
- Savvy Resources Ltd - HongKong
- Bukit Makmur.PT - Indonesia
- Thiess Contractors Indonesia
- Essar Steel Hazira Ltd - India
- Coal and Oil Company - UAE
- Marubeni Corporation - India
- Ind-Barath Power Infra Limited - India
- Africa Commodities Group - South Africa
- Leighton Contractors Pty Ltd - Australia
- Lanco Infratech Ltd - India
- Renaissance Capital - South Africa
- Meenaskhi Energy Private Limited - India
- Eastern Coal Council - USA
- IEA Clean Coal Centre - UK
- Cigading International Bulk Terminal - Indonesia
- Minerals Council of Australia
- GMR Energy Limited - India
- Offshore Bulk Terminal Pte Ltd, Singapore
- Siam City Cement - Thailand
- Cement Manufacturers Association - India
- IHS Mccloskey Coal Group - USA
- Krishnapatnam Port Company Ltd. - India
- Binh Thuan Hamico - Vietnam
- Deloitte Consulting - India
- Gujarat Electricity Regulatory Commission - India
- Electricity Authority, New Zealand
- Coalindo Energy - Indonesia
- Wood Mackenzie - Singapore
- Rashtriya Ispat Nigam Limited - India
- Banpu Public Company Limited - Thailand
- Directorate Of Revenue Intelligence - India
- Bayan Resources Tbk. - Indonesia
- Manunggal Multi Energi - Indonesia
- Timah Investasi Mineral - Indoneisa
- Bangladesh Power Developement Board
- AsiaOL BioFuels Corp., Philippines
- Kumho Petrochemical, South Korea
- GVK Power & Infra Limited - India
- Ministry of Transport, Egypt
- Straits Asia Resources Limited - Singapore
- Star Paper Mills Limited - India
- The University of Queensland
- Chamber of Mines of South Africa
- CIMB Investment Bank - Malaysia
- Singapore Mercantile Exchange
- Malabar Cements Ltd - India
- Mercuria Energy - Indonesia
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