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.
|
|
Sunday, 26 January 20
SHIPPING NEEDS TO PREPARE FOR CORONAVIRUS RESTRICTIONS WARNS HILL DICKINSON
The shipping industry needs to be prepared for potential restrictions in order to prevent the further spread of the ‘Wuhan’ coronavirus ...
Friday, 24 January 20
LOW-SULPHUR FUEL OIL PRICES DROP USD 99 PER MT IN SINGAPORE - BIMCO
Singapore has seen one of the largest drops in the price of Very Low Sulphur Fuel Oil (VLSFO), which peaked on 7 January 2020 at USD 740 per metric ...
Friday, 24 January 20
CHINA'S BENCHMARK POWER COAL PRICE REMAINED FLAT DURING THE PAST WEEK - XINHUA
The Bohai-Rim Steam-Coal Price Index (BSPI), a gauge of coal prices in north China’s major ports, stood at 553 yuan (about 80.1 U.S. dollars) ...
Thursday, 23 January 20
PANAMAX: ANOTHER DISAPPOINTING WEEK IN BOTH THE ATLANTIC AND THE PACIFIC BASIN - FEARNLEYS
Cape Size
From bad to worse for the biggest ships as prices for low-sulphur fuel oil remain high whilst freight rates deteriorate further. Aver ...
Thursday, 23 January 20
AFRICAN POWER PLATFORM PUBLISHES REPORTS ON POWER SECTOR FRAMEWORK FOR SELECTED AFRICAN COUNTRIES
Press Release: African Power Platform publishes Reports on Power Sector Framework for selected African Countries
With the repo ...
|
|
|
Showing 1171 to 1175 news of total 6871 |
|
 |
|
|
|
|
| |
|
 |
|
|
| |
|
- Tata Chemicals Ltd - India
- Bhoruka Overseas - Indonesia
- Indian Energy Exchange, India
- Goldman Sachs - Singapore
- SMC Global Power, Philippines
- Maharashtra Electricity Regulatory Commission - India
- Deloitte Consulting - India
- IEA Clean Coal Centre - UK
- Kideco Jaya Agung - Indonesia
- LBH Netherlands Bv - Netherlands
- Dalmia Cement Bharat India
- Price Waterhouse Coopers - Russia
- Parry Sugars Refinery, India
- Grasim Industreis Ltd - India
- Sinarmas Energy and Mining - Indonesia
- Ministry of Finance - Indonesia
- Bulk Trading Sa - Switzerland
- White Energy Company Limited
- Kumho Petrochemical, South Korea
- Siam City Cement PLC, Thailand
- Kohat Cement Company Ltd. - Pakistan
- Australian Commodity Traders Exchange
- Ministry of Mines - Canada
- Electricity Authority, New Zealand
- Alfred C Toepfer International GmbH - Germany
- Rio Tinto Coal - Australia
- Billiton Holdings Pty Ltd - Australia
- Carbofer General Trading SA - India
- Ind-Barath Power Infra Limited - India
- Meralco Power Generation, Philippines
- South Luzon Thermal Energy Corporation
- Sree Jayajothi Cements Limited - India
- GN Power Mariveles Coal Plant, Philippines
- Merrill Lynch Commodities Europe
- Independent Power Producers Association of India
- MS Steel International - UAE
- Bharathi Cement Corporation - India
- Xindia Steels Limited - India
- Toyota Tsusho Corporation, Japan
- Vizag Seaport Private Limited - India
- Bhushan Steel Limited - India
- GAC Shipping (India) Pvt Ltd
- Aditya Birla Group - India
- Georgia Ports Authority, United States
- Metalloyd Limited - United Kingdom
- Mintek Dendrill Indonesia
- VISA Power Limited - India
- Gujarat Mineral Development Corp Ltd - India
- New Zealand Coal & Carbon
- Global Green Power PLC Corporation, Philippines
- Coastal Gujarat Power Limited - India
- Maheswari Brothers Coal Limited - India
- AsiaOL BioFuels Corp., Philippines
- Kapuas Tunggal Persada - Indonesia
- Australian Coal Association
- Chamber of Mines of South Africa
- Mercuria Energy - Indonesia
- San Jose City I Power Corp, Philippines
- Pendopo Energi Batubara - Indonesia
- Makarim & Taira - Indonesia
- Larsen & Toubro Limited - India
- Offshore Bulk Terminal Pte Ltd, Singapore
- Energy Link Ltd, New Zealand
- Vijayanagar Sugar Pvt Ltd - India
- Bhatia International Limited - India
- Vedanta Resources Plc - India
- Indika Energy - Indonesia
- Baramulti Group, Indonesia
- The Treasury - Australian Government
- Semirara Mining and Power Corporation, Philippines
- Orica Mining Services - Indonesia
- Commonwealth Bank - Australia
- Samtan Co., Ltd - South Korea
- Karaikal Port Pvt Ltd - India
- Posco Energy - South Korea
- Power Finance Corporation Ltd., India
- International Coal Ventures Pvt Ltd - India
- Jorong Barutama Greston.PT - Indonesia
- Anglo American - United Kingdom
- Orica Australia Pty. Ltd.
- Therma Luzon, Inc, Philippines
- Wilmar Investment Holdings
- Petron Corporation, Philippines
- Bangladesh Power Developement Board
- Oldendorff Carriers - Singapore
- Manunggal Multi Energi - Indonesia
- Interocean Group of Companies - India
- Leighton Contractors Pty Ltd - Australia
- Romanian Commodities Exchange
- Lanco Infratech Ltd - India
- Iligan Light & Power Inc, Philippines
- Bayan Resources Tbk. - Indonesia
- Medco Energi Mining Internasional
- McConnell Dowell - Australia
- Minerals Council of Australia
- Banpu Public Company Limited - Thailand
- Electricity Generating Authority of Thailand
- Sical Logistics Limited - India
- Singapore Mercantile Exchange
- Directorate Of Revenue Intelligence - India
- Ambuja Cements Ltd - India
- Indonesian Coal Mining Association
- Savvy Resources Ltd - HongKong
- Planning Commission, India
- Siam City Cement - Thailand
- Altura Mining Limited, Indonesia
- Indo Tambangraya Megah - Indonesia
- PNOC Exploration Corporation - Philippines
- Renaissance Capital - South Africa
- Bukit Makmur.PT - Indonesia
- TeaM Sual Corporation - Philippines
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Kepco SPC Power Corporation, Philippines
- Riau Bara Harum - Indonesia
- Coal and Oil Company - UAE
- OPG Power Generation Pvt Ltd - India
- Eastern Energy - Thailand
- Wood Mackenzie - Singapore
- Jaiprakash Power Ventures ltd
- Directorate General of MIneral and Coal - Indonesia
- Bahari Cakrawala Sebuku - Indonesia
- Barasentosa Lestari - Indonesia
- Antam Resourcindo - Indonesia
- PTC India Limited - India
- Krishnapatnam Port Company Ltd. - India
- Pipit Mutiara Jaya. PT, Indonesia
- PowerSource Philippines DevCo
- Bukit Asam (Persero) Tbk - Indonesia
- ICICI Bank Limited - India
- Tamil Nadu electricity Board
- Thai Mozambique Logistica
- Malabar Cements Ltd - India
- Essar Steel Hazira Ltd - India
- Star Paper Mills Limited - India
- Videocon Industries ltd - India
- CIMB Investment Bank - Malaysia
- Sojitz Corporation - Japan
- Borneo Indobara - Indonesia
- Marubeni Corporation - India
- Attock Cement Pakistan Limited
- Thiess Contractors Indonesia
- Edison Trading Spa - Italy
- Sakthi Sugars Limited - India
- Central Java Power - Indonesia
- Global Coal Blending Company Limited - Australia
- GMR Energy Limited - India
- Holcim Trading Pte Ltd - Singapore
- Standard Chartered Bank - UAE
- Mercator Lines Limited - India
- Trasteel International SA, Italy
- Asmin Koalindo Tuhup - Indonesia
- Binh Thuan Hamico - Vietnam
- PetroVietnam Power Coal Import and Supply Company
- Intertek Mineral Services - Indonesia
- India Bulls Power Limited - India
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Rashtriya Ispat Nigam Limited - India
- Bank of Tokyo Mitsubishi UFJ Ltd
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Jindal Steel & Power Ltd - India
- Bukit Baiduri Energy - Indonesia
- SN Aboitiz Power Inc, Philippines
- Salva Resources Pvt Ltd - India
- The University of Queensland
- Chettinad Cement Corporation Ltd - India
- Latin American Coal - Colombia
- Parliament of New Zealand
- Timah Investasi Mineral - Indoneisa
- Cigading International Bulk Terminal - Indonesia
- Kobexindo Tractors - Indoneisa
- Globalindo Alam Lestari - Indonesia
- Petrochimia International Co. Ltd.- Taiwan
- Agrawal Coal Company - India
- The State Trading Corporation of India Ltd
- SMG Consultants - Indonesia
- Economic Council, Georgia
- Gujarat Electricity Regulatory Commission - India
- Indogreen Group - Indonesia
- Simpson Spence & Young - Indonesia
- Asia Pacific Energy Resources Ventures Inc, Philippines
- ASAPP Information Group - India
- Mjunction Services Limited - India
- Kalimantan Lumbung Energi - Indonesia
- Energy Development Corp, Philippines
- Sindya Power Generating Company Private Ltd
- Africa Commodities Group - South Africa
- Coalindo Energy - Indonesia
- Semirara Mining Corp, Philippines
- GVK Power & Infra Limited - India
- Global Business Power Corporation, Philippines
- Port Waratah Coal Services - Australia
- Ministry of Transport, Egypt
- Heidelberg Cement - Germany
- Gujarat Sidhee Cement - India
- Sarangani Energy Corporation, Philippines
- European Bulk Services B.V. - Netherlands
- Neyveli Lignite Corporation Ltd, - India
- Cement Manufacturers Association - India
- Indian Oil Corporation Limited
- IHS Mccloskey Coal Group - USA
- Uttam Galva Steels Limited - India
- Kaltim Prima Coal - Indonesia
- Kartika Selabumi Mining - Indonesia
- Straits Asia Resources Limited - Singapore
- CNBM International Corporation - China
- Formosa Plastics Group - Taiwan
- Miang Besar Coal Terminal - Indonesia
- Ceylon Electricity Board - Sri Lanka
- London Commodity Brokers - England
- Aboitiz Power Corporation - Philippines
- TNB Fuel Sdn Bhd - Malaysia
- Central Electricity Authority - India
- Meenaskhi Energy Private Limited - India
- Madhucon Powers Ltd - India
- Eastern Coal Council - USA
- Karbindo Abesyapradhi - Indoneisa
|
| |
| |
|
