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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, 05 October 16
SHIPPING MARKET INSIGHT
On September 27th the OPEC petroleum and energy ministers arrived in Algeria to attend the International Energy Forum, which brought together produ ...
Monday, 03 October 16
THERMAL COAL PRICE SHOOTS UP AND MADE THEIR VERTICAL MOVE IN 5 YEARS; PRICE RALLY 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 ...
Monday, 03 October 16
DRY-BULK SHIPPING FREIGHTS SLIDE IN SOFTENING SPOT MARKET
COALspot.com: The Baltic Exchange, tracking rates for ships carrying dry bulk commodities decline slightly and ending in a negative note this past ...
Friday, 30 September 16
U.S. WEEKLY COAL OUTPUT FELL 2.3% - EIA
COALspot.com – U.S., the world’s second largest coal producers have produced approximately totalled an estimated 15.7 million short ton ...
Friday, 30 September 16
OPEC CUT SUPPORTS SLOW OIL RECOVERY, NOT STRONG REBOUND - FITCH
OPEC's oil production target announced this week signals the potential for greater co-ordination among its members, but the target itself is la ...
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- Directorate General of MIneral and Coal - Indonesia
- South Luzon Thermal Energy Corporation
- Essar Steel Hazira Ltd - India
- Indonesian Coal Mining Association
- Indogreen Group - Indonesia
- Bukit Asam (Persero) Tbk - Indonesia
- Energy Link Ltd, New Zealand
- Globalindo Alam Lestari - Indonesia
- Bahari Cakrawala Sebuku - Indonesia
- Kapuas Tunggal Persada - Indonesia
- Ministry of Mines - Canada
- Semirara Mining Corp, Philippines
- Tata Chemicals Ltd - India
- LBH Netherlands Bv - Netherlands
- GMR Energy Limited - India
- Semirara Mining and Power Corporation, Philippines
- Jaiprakash Power Ventures ltd
- Minerals Council of Australia
- Karbindo Abesyapradhi - Indoneisa
- PTC India Limited - India
- Economic Council, Georgia
- Electricity Generating Authority of Thailand
- Chamber of Mines of South Africa
- PowerSource Philippines DevCo
- SMC Global Power, Philippines
- Samtan Co., Ltd - South Korea
- Kideco Jaya Agung - Indonesia
- Commonwealth Bank - Australia
- Vijayanagar Sugar Pvt Ltd - India
- Bhushan Steel Limited - India
- Billiton Holdings Pty Ltd - Australia
- Agrawal Coal Company - India
- Tamil Nadu electricity Board
- Sindya Power Generating Company Private Ltd
- Aboitiz Power Corporation - Philippines
- White Energy Company Limited
- Metalloyd Limited - United Kingdom
- PetroVietnam Power Coal Import and Supply Company
- Cement Manufacturers Association - India
- VISA Power Limited - India
- Bangladesh Power Developement Board
- Kepco SPC Power Corporation, Philippines
- Barasentosa Lestari - Indonesia
- Makarim & Taira - Indonesia
- Australian Commodity Traders Exchange
- Ministry of Finance - Indonesia
- Karaikal Port Pvt Ltd - India
- The State Trading Corporation of India Ltd
- Larsen & Toubro Limited - India
- Indo Tambangraya Megah - Indonesia
- Electricity Authority, New Zealand
- Rashtriya Ispat Nigam Limited - India
- San Jose City I Power Corp, Philippines
- Jindal Steel & Power Ltd - India
- Central Electricity Authority - India
- Iligan Light & Power Inc, Philippines
- Sinarmas Energy and Mining - Indonesia
- Latin American Coal - Colombia
- MS Steel International - UAE
- Mjunction Services Limited - India
- Riau Bara Harum - Indonesia
- Indian Energy Exchange, India
- Gujarat Sidhee Cement - India
- GVK Power & Infra Limited - India
- Binh Thuan Hamico - Vietnam
- Altura Mining Limited, Indonesia
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Vizag Seaport Private Limited - India
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Orica Australia Pty. Ltd.
- ASAPP Information Group - India
- Eastern Coal Council - USA
- Simpson Spence & Young - Indonesia
- Goldman Sachs - Singapore
- Pipit Mutiara Jaya. PT, Indonesia
- Sakthi Sugars Limited - India
- Power Finance Corporation Ltd., India
- Eastern Energy - Thailand
- Maharashtra Electricity Regulatory Commission - India
- Kumho Petrochemical, South Korea
- Bulk Trading Sa - Switzerland
- Bhatia International Limited - India
- Uttam Galva Steels Limited - India
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Siam City Cement - Thailand
- Mintek Dendrill Indonesia
- Cigading International Bulk Terminal - Indonesia
- Therma Luzon, Inc, Philippines
- Vedanta Resources Plc - India
- Mercator Lines Limited - India
- Bharathi Cement Corporation - India
- Meralco Power Generation, Philippines
- Ministry of Transport, Egypt
- IHS Mccloskey Coal Group - USA
- Heidelberg Cement - Germany
- Romanian Commodities Exchange
- Singapore Mercantile Exchange
- Orica Mining Services - Indonesia
- Banpu Public Company Limited - Thailand
- Offshore Bulk Terminal Pte Ltd, Singapore
- International Coal Ventures Pvt Ltd - India
- Savvy Resources Ltd - HongKong
- IEA Clean Coal Centre - UK
- Parliament of New Zealand
- Malabar Cements Ltd - India
- Wood Mackenzie - Singapore
- TeaM Sual Corporation - Philippines
- Medco Energi Mining Internasional
- Xindia Steels Limited - India
- Sarangani Energy Corporation, Philippines
- Deloitte Consulting - India
- Sree Jayajothi Cements Limited - India
- Kohat Cement Company Ltd. - Pakistan
- Maheswari Brothers Coal Limited - India
- New Zealand Coal & Carbon
- Leighton Contractors Pty Ltd - Australia
- Global Business Power Corporation, Philippines
- Global Coal Blending Company Limited - Australia
- Kobexindo Tractors - Indoneisa
- Madhucon Powers Ltd - India
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Posco Energy - South Korea
- Antam Resourcindo - Indonesia
- Petron Corporation, Philippines
- Holcim Trading Pte Ltd - Singapore
- Manunggal Multi Energi - Indonesia
- Indian Oil Corporation Limited
- Straits Asia Resources Limited - Singapore
- Mercuria Energy - Indonesia
- Salva Resources Pvt Ltd - India
- Independent Power Producers Association of India
- Ind-Barath Power Infra Limited - India
- Petrochimia International Co. Ltd.- Taiwan
- London Commodity Brokers - England
- SN Aboitiz Power Inc, Philippines
- Oldendorff Carriers - Singapore
- OPG Power Generation Pvt Ltd - India
- Siam City Cement PLC, Thailand
- Borneo Indobara - Indonesia
- Coastal Gujarat Power Limited - India
- Coal and Oil Company - UAE
- Bhoruka Overseas - Indonesia
- Port Waratah Coal Services - Australia
- AsiaOL BioFuels Corp., Philippines
- Bukit Baiduri Energy - Indonesia
- Attock Cement Pakistan Limited
- Central Java Power - Indonesia
- Energy Development Corp, Philippines
- Thiess Contractors Indonesia
- Formosa Plastics Group - Taiwan
- Bayan Resources Tbk. - Indonesia
- Standard Chartered Bank - UAE
- Lanco Infratech Ltd - India
- Thai Mozambique Logistica
- European Bulk Services B.V. - Netherlands
- Interocean Group of Companies - India
- Dalmia Cement Bharat India
- Planning Commission, India
- Krishnapatnam Port Company Ltd. - India
- Indika Energy - Indonesia
- Chettinad Cement Corporation Ltd - India
- Wilmar Investment Holdings
- Star Paper Mills Limited - India
- Merrill Lynch Commodities Europe
- Asmin Koalindo Tuhup - Indonesia
- The University of Queensland
- Rio Tinto Coal - Australia
- Jorong Barutama Greston.PT - Indonesia
- Kartika Selabumi Mining - Indonesia
- Gujarat Electricity Regulatory Commission - India
- McConnell Dowell - Australia
- The Treasury - Australian Government
- Global Green Power PLC Corporation, Philippines
- Grasim Industreis Ltd - India
- India Bulls Power Limited - India
- Intertek Mineral Services - Indonesia
- Bank of Tokyo Mitsubishi UFJ Ltd
- Timah Investasi Mineral - Indoneisa
- CIMB Investment Bank - Malaysia
- Price Waterhouse Coopers - Russia
- Coalindo Energy - Indonesia
- Anglo American - United Kingdom
- Alfred C Toepfer International GmbH - Germany
- PNOC Exploration Corporation - Philippines
- Pendopo Energi Batubara - Indonesia
- Edison Trading Spa - Italy
- CNBM International Corporation - China
- Toyota Tsusho Corporation, Japan
- Directorate Of Revenue Intelligence - India
- Ambuja Cements Ltd - India
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Carbofer General Trading SA - India
- Neyveli Lignite Corporation Ltd, - India
- Renaissance Capital - South Africa
- Georgia Ports Authority, United States
- Videocon Industries ltd - India
- Australian Coal Association
- Trasteel International SA, Italy
- Sical Logistics Limited - India
- Bukit Makmur.PT - Indonesia
- Meenaskhi Energy Private Limited - India
- GN Power Mariveles Coal Plant, Philippines
- TNB Fuel Sdn Bhd - Malaysia
- Aditya Birla Group - India
- Gujarat Mineral Development Corp Ltd - India
- ICICI Bank Limited - India
- Miang Besar Coal Terminal - Indonesia
- Sojitz Corporation - Japan
- Kalimantan Lumbung Energi - Indonesia
- Parry Sugars Refinery, India
- GAC Shipping (India) Pvt Ltd
- Kaltim Prima Coal - Indonesia
- Ceylon Electricity Board - Sri Lanka
- Marubeni Corporation - India
- Africa Commodities Group - South Africa
- Baramulti Group, Indonesia
- SMG Consultants - Indonesia
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