We welcome article submissions from experts in the areas of coal, mining,
shipping, etc.
To Submit your article please click here.
|
|
|
Wednesday, 12 February 20
REFINING SET FOR A CHALLENGING 2020 - WOOD MACKENZIE
 Downstream isn’t the glamorous end of the oil business. And in Big Oil, it’s typically dwarfed by upstream. Yet having been forced to restructure and focus on costs early this century, downstream’s cash flow has underpinned a third of the Majors’ shareholder returns over the last five years.
But a laser-like focus on costs and efficiency can only take you so far. If the external environment turns against you, downstream is as vulnerable as any part of the business. The Majors’ downstream results for Q4 2019 were among the poorest since 2015. Petrochemicals is part of that story, with earnings suffering from over-investment.
Now we’re also seeing refining margins come under increasing pressure, slipping to five-year lows in the last few weeks of 2019 and the first of 2020. Alan Gelder, VP Refining, identifies two main factors.
Firstly, new regulation on marine fuels was expected to boost refining margins this year – but that hasn’t played out as expected yet. The International Maritime Organization (IMO) regulations require all vessels to reduce the level of sulphur in their engine emissions from 3.5% to 0.5% or less from 1 January.
Essentially, IMO should trigger a shift out of low-value product (High Sulphur Fuel Oil, or HSFO) into higher value Very Low Sulphur Fuel Oil (VLSFO). Refinery capacity to make VLSFO is limited, so marine gasoil, which is closely linked to the price of diesel, would top up any shortfall. This shift to high-value products was expected to drive up refining margins in 2020.
It’s only half happened. The price of VLSFO surged in Q4 and HSFO duly collapsed. The surprise was that there’s been much more VLSFO available than expected. Traders had taken advantage of low-price feedstock in late summer 2019 and built up volumes of VLSFO in storage. When the demand came in, they were ready and cashed in, big time. A single tanker loaded with 2 million barrels of VLSFO could make over US$10/bbl on the spread and pull in US$20 million-plus in cash profit.
Producers with the right crude have also fared well. Santos revealed that it had sold a single cargo of heavy sweet crude, ideal feedstock for VLSFO, at an unheard-of US$30/bbl premium to Brent. Nice work if you can get it.
What didn’t really materialise was higher demand for marine gasoil – it’s just not been needed in the volumes anticipated. Weaker marine demand for gasoil has been compounded by soft demand from heating – a much bigger market – because of warm winter weather in the northern hemisphere and lacklustre economic growth. That’s led to a glut of gasoil in inventory which is depressing refining margins.
Second, global oil demand growth forecasts are falling back sharply – potentially a more fundamental problem. The biggest factor is the coronavirus, so we have reduced our demand forecasts in China by almost 0.6 million b/d for Q1 2020. We now expect China demand to fall year-on-year by 125,000 b/d for the quarter, the worst rate since 2009. Global demand will fall by 250,000 b/d, also the worst in over a decade.
So what’s next for refining?
The VLSFO surplus should be a short-term phenomenon. There’s not enough refining capacity to supply all bunker demand with VLSFO. That gap will have to be met by additional gasoil once the surplus VLSFO in inventory is soaked up, by H2 2020 at the latest.
The prospects for oil demand are more worrying and harder to call. At this stage, we have restricted our adjustments to Q1 and left the rest of the year largely unchanged. If the virus can be contained successfully in the coming weeks, demand could bounce back strongly – much as was the case with SARS in 2003.
Refining margins so far in Q1 suggest it will take a while before refining profitability recovers. Meantime, refiners will do what they must to keep costs down and maximise cash flows, including cutting refinery runs to limit the build-up in inventory. It’s about toughing it out, waiting and hoping for demand – China in particular – to perk up again.
Source: Wood Mackenzie
If you believe an article violates your rights or the rights of others, please contact us.
|
|
Tuesday, 03 March 20
IMPORTANCE OF MASTER'S CARGO CHECKS - BALTIC EXCHANGE
KNOWLEDGE TO ELEVATE
Adecision in recent High Court case has made it clear that there is no implied indemnity from a charterer to their counte ...
Tuesday, 03 March 20
COAL'S SHARE OF CHINA ENERGY MIX FALLS IN 2019 BUT CONSUMPTION STILL RISING - REUTERS
Coal accounted for 57.7% of China’s primary energy consumption in 2019, the National Bureau of Statistics said on Friday, down 1.5 percentage ...
Monday, 02 March 20
SHIPOWNERS AND OPERATORS COULD FACE DETENTION OF SHIPS FROM 1ST MARCH UNDER IMO RULE - ICS
Port state control authorities will begin to enforce the IMO’s Sulphur 2020 from 1st March, making it an offense for ships to carry fuel that ...
Saturday, 29 February 20
SUPRAMAX SENTIMENT WAS UP IN A FEW KEY AREAS OVER THE LAST WEEK - BALTIC BRIEFING
Capesize
The Capesize market woes related to Coronavirus have now spread through the wider global markets like wildfire. The wider supply and d ...
Thursday, 27 February 20
FOREIGN COMPANIES LIKELY TO SKIP COMMERCIAL COAL BLOCK AUCTIONS - ECONOMIC TIMES
The Centre is in the process of inviting global players for commercial mining, following 100% foreign direct investment in the sector. However, giv ...
|
|
|
Showing 1101 to 1105 news of total 6871 |
|
 |
|
|
|
|
| |
|
 |
|
|
| |
|
- Billiton Holdings Pty Ltd - Australia
- Central Electricity Authority - India
- Petrochimia International Co. Ltd.- Taiwan
- Trasteel International SA, Italy
- Bank of Tokyo Mitsubishi UFJ Ltd
- Orica Australia Pty. Ltd.
- Iligan Light & Power Inc, Philippines
- Directorate Of Revenue Intelligence - India
- Parry Sugars Refinery, India
- Price Waterhouse Coopers - Russia
- Coal and Oil Company - UAE
- Barasentosa Lestari - Indonesia
- Agrawal Coal Company - India
- Kapuas Tunggal Persada - Indonesia
- Ministry of Transport, Egypt
- Carbofer General Trading SA - India
- Timah Investasi Mineral - Indoneisa
- Kepco SPC Power Corporation, Philippines
- Latin American Coal - Colombia
- Energy Link Ltd, New Zealand
- New Zealand Coal & Carbon
- Electricity Authority, New Zealand
- Star Paper Mills Limited - India
- Karbindo Abesyapradhi - Indoneisa
- Baramulti Group, Indonesia
- Sinarmas Energy and Mining - Indonesia
- ICICI Bank Limited - India
- Thai Mozambique Logistica
- India Bulls Power Limited - India
- Maheswari Brothers Coal Limited - India
- Petron Corporation, Philippines
- Australian Commodity Traders Exchange
- Marubeni Corporation - India
- Kalimantan Lumbung Energi - Indonesia
- Malabar Cements Ltd - India
- Global Business Power Corporation, Philippines
- White Energy Company Limited
- Riau Bara Harum - Indonesia
- Romanian Commodities Exchange
- Ministry of Mines - Canada
- Meenaskhi Energy Private Limited - India
- Sakthi Sugars Limited - India
- Globalindo Alam Lestari - Indonesia
- Planning Commission, India
- Central Java Power - Indonesia
- Bhushan Steel Limited - India
- Bayan Resources Tbk. - Indonesia
- Sojitz Corporation - Japan
- Indian Energy Exchange, India
- Indo Tambangraya Megah - Indonesia
- Ceylon Electricity Board - Sri Lanka
- Renaissance Capital - South Africa
- Manunggal Multi Energi - Indonesia
- Dalmia Cement Bharat India
- MS Steel International - UAE
- Larsen & Toubro Limited - India
- Sindya Power Generating Company Private Ltd
- GAC Shipping (India) Pvt Ltd
- Bukit Baiduri Energy - Indonesia
- Meralco Power Generation, Philippines
- Georgia Ports Authority, United States
- LBH Netherlands Bv - Netherlands
- Rio Tinto Coal - Australia
- Cigading International Bulk Terminal - Indonesia
- Chettinad Cement Corporation Ltd - India
- Bharathi Cement Corporation - India
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Indonesian Coal Mining Association
- Independent Power Producers Association of India
- Offshore Bulk Terminal Pte Ltd, Singapore
- GMR Energy Limited - India
- Indian Oil Corporation Limited
- The Treasury - Australian Government
- Borneo Indobara - Indonesia
- Global Green Power PLC Corporation, Philippines
- Energy Development Corp, Philippines
- Lanco Infratech Ltd - India
- Mintek Dendrill Indonesia
- Standard Chartered Bank - UAE
- Orica Mining Services - Indonesia
- San Jose City I Power Corp, Philippines
- Interocean Group of Companies - India
- Salva Resources Pvt Ltd - India
- Essar Steel Hazira Ltd - India
- IHS Mccloskey Coal Group - USA
- VISA Power Limited - India
- Chamber of Mines of South Africa
- European Bulk Services B.V. - Netherlands
- OPG Power Generation Pvt Ltd - India
- Wilmar Investment Holdings
- London Commodity Brokers - England
- Posco Energy - South Korea
- Sarangani Energy Corporation, Philippines
- Rashtriya Ispat Nigam Limited - India
- McConnell Dowell - Australia
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Mercuria Energy - Indonesia
- Neyveli Lignite Corporation Ltd, - India
- PNOC Exploration Corporation - Philippines
- GVK Power & Infra Limited - India
- Ind-Barath Power Infra Limited - India
- Straits Asia Resources Limited - Singapore
- Jindal Steel & Power Ltd - India
- Parliament of New Zealand
- Eastern Coal Council - USA
- Coastal Gujarat Power Limited - India
- Binh Thuan Hamico - Vietnam
- Bhatia International Limited - India
- Semirara Mining Corp, Philippines
- Metalloyd Limited - United Kingdom
- Holcim Trading Pte Ltd - Singapore
- Wood Mackenzie - Singapore
- Edison Trading Spa - Italy
- Madhucon Powers Ltd - India
- Aditya Birla Group - India
- Makarim & Taira - Indonesia
- Kaltim Prima Coal - Indonesia
- Africa Commodities Group - South Africa
- Simpson Spence & Young - Indonesia
- Mercator Lines Limited - India
- Thiess Contractors Indonesia
- Power Finance Corporation Ltd., India
- Bhoruka Overseas - Indonesia
- Cement Manufacturers Association - India
- ASAPP Information Group - India
- Gujarat Mineral Development Corp Ltd - India
- Therma Luzon, Inc, Philippines
- Sical Logistics Limited - India
- Kobexindo Tractors - Indoneisa
- PetroVietnam Power Coal Import and Supply Company
- Australian Coal Association
- GN Power Mariveles Coal Plant, Philippines
- Merrill Lynch Commodities Europe
- Coalindo Energy - Indonesia
- Bulk Trading Sa - Switzerland
- Miang Besar Coal Terminal - Indonesia
- Alfred C Toepfer International GmbH - Germany
- CIMB Investment Bank - Malaysia
- Semirara Mining and Power Corporation, Philippines
- Samtan Co., Ltd - South Korea
- SN Aboitiz Power Inc, Philippines
- Sree Jayajothi Cements Limited - India
- Bukit Asam (Persero) Tbk - Indonesia
- South Luzon Thermal Energy Corporation
- PTC India Limited - India
- Krishnapatnam Port Company Ltd. - India
- Kideco Jaya Agung - Indonesia
- Leighton Contractors Pty Ltd - Australia
- Pipit Mutiara Jaya. PT, Indonesia
- Xindia Steels Limited - India
- Altura Mining Limited, Indonesia
- Oldendorff Carriers - Singapore
- CNBM International Corporation - China
- Attock Cement Pakistan Limited
- Siam City Cement PLC, Thailand
- Economic Council, Georgia
- Minerals Council of Australia
- AsiaOL BioFuels Corp., Philippines
- Bukit Makmur.PT - Indonesia
- International Coal Ventures Pvt Ltd - India
- Banpu Public Company Limited - Thailand
- Intertek Mineral Services - Indonesia
- Asmin Koalindo Tuhup - Indonesia
- The University of Queensland
- Directorate General of MIneral and Coal - Indonesia
- Bangladesh Power Developement Board
- Vijayanagar Sugar Pvt Ltd - India
- Medco Energi Mining Internasional
- Ministry of Finance - Indonesia
- Tamil Nadu electricity Board
- Uttam Galva Steels Limited - India
- Aboitiz Power Corporation - Philippines
- Mjunction Services Limited - India
- Goldman Sachs - Singapore
- Siam City Cement - Thailand
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Savvy Resources Ltd - HongKong
- Singapore Mercantile Exchange
- Eastern Energy - Thailand
- Jorong Barutama Greston.PT - Indonesia
- Pendopo Energi Batubara - Indonesia
- Maharashtra Electricity Regulatory Commission - India
- Gujarat Electricity Regulatory Commission - India
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Deloitte Consulting - India
- Indika Energy - Indonesia
- Anglo American - United Kingdom
- Vedanta Resources Plc - India
- Gujarat Sidhee Cement - India
- Bahari Cakrawala Sebuku - Indonesia
- SMC Global Power, Philippines
- Ambuja Cements Ltd - India
- The State Trading Corporation of India Ltd
- Tata Chemicals Ltd - India
- Kohat Cement Company Ltd. - Pakistan
- Port Waratah Coal Services - Australia
- Karaikal Port Pvt Ltd - India
- TNB Fuel Sdn Bhd - Malaysia
- Kumho Petrochemical, South Korea
- Antam Resourcindo - Indonesia
- Heidelberg Cement - Germany
- Electricity Generating Authority of Thailand
- Indogreen Group - Indonesia
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Commonwealth Bank - Australia
- TeaM Sual Corporation - Philippines
- IEA Clean Coal Centre - UK
- Formosa Plastics Group - Taiwan
- Jaiprakash Power Ventures ltd
- PowerSource Philippines DevCo
- Global Coal Blending Company Limited - Australia
- Grasim Industreis Ltd - India
- SMG Consultants - Indonesia
- Vizag Seaport Private Limited - India
- Toyota Tsusho Corporation, Japan
- Videocon Industries ltd - India
- Kartika Selabumi Mining - Indonesia
|
| |
| |
|
