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Friday, 20 March 20
VOLATILITY TO INCREASE IN TANKER MARKET FOLLOWING OIL PRICE WAR - DREWRY
Crude oil prices plunged by more than a third in the past week after OPEC+ failed to agree on production cut as demand softened in the aftermath of coronavirus (COVID-19). In its recent report, the IEA estimates global oil demand at 99.9 mbpd in 2020, which is around 90,000 bpd lower than in 2019 and a sharp downgrade from the agency’s forecast in February, which predicted global oil demand will grow 825,000 bpd in 2020.
The market expected OPEC+ to cut supply as the COVID-19 epidemic has spread from China to Europe, the Americas and Middle East. However, the negotiations failed due to strong resistance from Russia, which is of the view that the policy of capping production by OPEC+ producers to support the oil price is facilitating the development of US shale oil, with Russia losing its market share to increasing exports from the US.
After the failure of production cut talks in Vienna, Saudi Arabia started a price war by slashing the official selling prices for crude for key buyers in the international market and hinted at raising crude oil production to full capacity of 12.3 mbpd from April 2020. The ‘shock and awe’ tactics of Saudi Arabia could be a move to impose maximum pain in the quickest possible way to Russia and other producers, in an effort to renegotiate the proposed production cut and then quickly reverse the production surge and thereafter implement the production cut if a deal is reached.
However, the recent move by Saudi Arabia could lead to:
a) Renegotiation on a production cut between OPEC and Russia
b) Prolonged price war between OPEC, Russia and US producers
If there are fresh negotiations to implement a production cut by OPEC+ producers to accommodate the effect of declining oil demand, crude oil prices are expected to normalise.
But if there is a prolonged price war between Saudi Arabia, Russia and US shale oil producers, lower crude oil prices will lead to some improvement in global oil demand and refinery runs. At the same time, onshore stocking activity will also increase, especially in countries such as China as they build their Strategic Petroleum Reserve. A global supply glut is also likely to lead to an increase in floating storage especially among oil producers.
At the same time, sustained weakness in oil prices will eventually hurt US shale oil producers because of their relatively higher cost of production. In such circumstances, the market share of Middle Eastern crude will increase at the expense of US crude.
Meanwhile, tanker rates surged due to a sudden increase in VLCC chartering from Bahri, Saudi Arabia’s national shipping arm. Bahri fixed at least 18 VLCCs since the Kingdom aims to pump more crude into the market as its price war with Russia escalates. The VLCC earnings on Middle East–China (TD3C) route skyrocketed to $166,000pd on 11 March from $30,300pd on 06 March.
If Saudi Arabia manages to strike a deal with Russia to cut production in the short term, tanker rates will plummet to the pre-price war levels because of the ongoing weakness in crude oil trade on account of the spread of COVID-19 globally. On the other hand, if there is a prolonged price war, tonnage demand will rise initially with the increase in oil demand and stocking activity, which in turn will keep freight rates above pre-price war levels.
However, once sustained weakness in oil prices starts hurting US crude production, Middle Eastern crude will start displacing US crude in Asia. This in turn will squeeze tonne-mile demand for tankers as the distance between the US to Asia is almost double the distance between the Middle East to Asia. Thus we estimate that every barrel per day of annual decline in US exports to Asia at the expense of the Middle East will lead to about a 2.5% decline in overall tonne-mile demand for tankers. Freight rates in such a situation will plunge below the pre-price war levels.
Source: Drewry
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Friday, 01 December 23
COAL MINERS GROUP EXPECTS INDONESIA’S 2023 COAL OUTPUT TO SURPASS TARGET - REUTERS
The Indonesian Coal Mining Association (ICMA) expects the country’s 2023 coal output to surpass the official target of 695 million metric ton ...
Friday, 24 November 23
COAL IMPORTS TO INDIA IN OCTOBER 2023 REACHED HIGHEST LEVELS IN NEARLY A YEAR AND A HALF - VESSELSVALUE, VESON NAUTICAL
In October, coal imports to India reached 13.8 mt in October 2023, according to Oceanbolt, a Veson Nautical solution, the highest level since May 2 ...
Friday, 24 November 23
COAL SHIPMENTS TO ADVANCED ECONOMIES DOWN 17% SO FAR IN 2023 - BIMCO
In the first ten months of 2023, coal shipments to advanced economies fell by 17% y/y, as demand for electricity declined and the share of electric ...
Friday, 24 November 23
INTELLIGENT COAL MINES CONTRIBUTE TO IMPROVING SAFETY STANDARDS - CHINA DAILY
Mechanization, automation and intelligent upgrades have contributed to improved safety in coal mines, though the level of development of intelligen ...
Friday, 24 November 23
WHY AUSTRALIA'S COAL MINES ARE GETTING BIGGER - IEEFA
Australia’s largest coal mines are getting larger. Mines in New South Wales (NSW) are ramping up production following the state’s recov ...
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- Electricity Generating Authority of Thailand
- Sical Logistics Limited - India
- Therma Luzon, Inc, Philippines
- Kapuas Tunggal Persada - Indonesia
- Marubeni Corporation - India
- VISA Power Limited - India
- Ministry of Transport, Egypt
- Makarim & Taira - Indonesia
- Heidelberg Cement - Germany
- Indo Tambangraya Megah - Indonesia
- Price Waterhouse Coopers - Russia
- Star Paper Mills Limited - India
- Petron Corporation, Philippines
- Toyota Tsusho Corporation, Japan
- ICICI Bank Limited - India
- OPG Power Generation Pvt Ltd - India
- Carbofer General Trading SA - India
- Anglo American - United Kingdom
- CIMB Investment Bank - Malaysia
- Australian Coal Association
- Indonesian Coal Mining Association
- Mintek Dendrill Indonesia
- Ambuja Cements Ltd - India
- Bhoruka Overseas - Indonesia
- Parry Sugars Refinery, India
- Grasim Industreis Ltd - India
- Goldman Sachs - Singapore
- Dalmia Cement Bharat India
- IEA Clean Coal Centre - UK
- Australian Commodity Traders Exchange
- Iligan Light & Power Inc, Philippines
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Standard Chartered Bank - UAE
- Deloitte Consulting - India
- Kobexindo Tractors - Indoneisa
- Maheswari Brothers Coal Limited - India
- Semirara Mining Corp, Philippines
- Wilmar Investment Holdings
- Bank of Tokyo Mitsubishi UFJ Ltd
- European Bulk Services B.V. - Netherlands
- Central Java Power - Indonesia
- Indika Energy - Indonesia
- ASAPP Information Group - India
- Altura Mining Limited, Indonesia
- Gujarat Mineral Development Corp Ltd - India
- AsiaOL BioFuels Corp., Philippines
- Romanian Commodities Exchange
- Interocean Group of Companies - India
- Krishnapatnam Port Company Ltd. - India
- Parliament of New Zealand
- Globalindo Alam Lestari - Indonesia
- Indian Energy Exchange, India
- Independent Power Producers Association of India
- Latin American Coal - Colombia
- London Commodity Brokers - England
- Energy Development Corp, Philippines
- Economic Council, Georgia
- White Energy Company Limited
- Coastal Gujarat Power Limited - India
- Tamil Nadu electricity Board
- Cement Manufacturers Association - India
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Bahari Cakrawala Sebuku - Indonesia
- Riau Bara Harum - Indonesia
- Aditya Birla Group - India
- Jaiprakash Power Ventures ltd
- Offshore Bulk Terminal Pte Ltd, Singapore
- Bulk Trading Sa - Switzerland
- Manunggal Multi Energi - Indonesia
- India Bulls Power Limited - India
- Coal and Oil Company - UAE
- Kartika Selabumi Mining - Indonesia
- Bukit Asam (Persero) Tbk - Indonesia
- Agrawal Coal Company - India
- Aboitiz Power Corporation - Philippines
- Maharashtra Electricity Regulatory Commission - India
- GAC Shipping (India) Pvt Ltd
- Sindya Power Generating Company Private Ltd
- Madhucon Powers Ltd - India
- SN Aboitiz Power Inc, Philippines
- Semirara Mining and Power Corporation, Philippines
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Wood Mackenzie - Singapore
- Jindal Steel & Power Ltd - India
- Baramulti Group, Indonesia
- Coalindo Energy - Indonesia
- Videocon Industries ltd - India
- Holcim Trading Pte Ltd - Singapore
- Kalimantan Lumbung Energi - Indonesia
- Directorate Of Revenue Intelligence - India
- McConnell Dowell - Australia
- Vijayanagar Sugar Pvt Ltd - India
- Jorong Barutama Greston.PT - Indonesia
- PetroVietnam Power Coal Import and Supply Company
- CNBM International Corporation - China
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Neyveli Lignite Corporation Ltd, - India
- GMR Energy Limited - India
- Edison Trading Spa - Italy
- Rashtriya Ispat Nigam Limited - India
- Bukit Baiduri Energy - Indonesia
- Orica Mining Services - Indonesia
- San Jose City I Power Corp, Philippines
- Electricity Authority, New Zealand
- Timah Investasi Mineral - Indoneisa
- LBH Netherlands Bv - Netherlands
- Thiess Contractors Indonesia
- The Treasury - Australian Government
- Savvy Resources Ltd - HongKong
- Global Business Power Corporation, Philippines
- Eastern Energy - Thailand
- SMG Consultants - Indonesia
- Mercuria Energy - Indonesia
- Leighton Contractors Pty Ltd - Australia
- Pipit Mutiara Jaya. PT, Indonesia
- Commonwealth Bank - Australia
- Lanco Infratech Ltd - India
- Sojitz Corporation - Japan
- Sree Jayajothi Cements Limited - India
- PowerSource Philippines DevCo
- Directorate General of MIneral and Coal - Indonesia
- GVK Power & Infra Limited - India
- Karaikal Port Pvt Ltd - India
- Planning Commission, India
- Rio Tinto Coal - Australia
- Renaissance Capital - South Africa
- Binh Thuan Hamico - Vietnam
- Pendopo Energi Batubara - Indonesia
- Posco Energy - South Korea
- Gujarat Sidhee Cement - India
- Intertek Mineral Services - Indonesia
- Asmin Koalindo Tuhup - Indonesia
- Formosa Plastics Group - Taiwan
- Larsen & Toubro Limited - India
- Miang Besar Coal Terminal - Indonesia
- Billiton Holdings Pty Ltd - Australia
- South Luzon Thermal Energy Corporation
- Metalloyd Limited - United Kingdom
- The State Trading Corporation of India Ltd
- Bhushan Steel Limited - India
- Merrill Lynch Commodities Europe
- Malabar Cements Ltd - India
- Chettinad Cement Corporation Ltd - India
- Indogreen Group - Indonesia
- Mercator Lines Limited - India
- PNOC Exploration Corporation - Philippines
- MS Steel International - UAE
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Bayan Resources Tbk. - Indonesia
- Simpson Spence & Young - Indonesia
- Eastern Coal Council - USA
- Kumho Petrochemical, South Korea
- Ceylon Electricity Board - Sri Lanka
- PTC India Limited - India
- Sakthi Sugars Limited - India
- Kideco Jaya Agung - Indonesia
- Ministry of Mines - Canada
- Xindia Steels Limited - India
- Global Coal Blending Company Limited - Australia
- Orica Australia Pty. Ltd.
- Samtan Co., Ltd - South Korea
- Siam City Cement - Thailand
- Antam Resourcindo - Indonesia
- Minerals Council of Australia
- Kohat Cement Company Ltd. - Pakistan
- Energy Link Ltd, New Zealand
- Attock Cement Pakistan Limited
- Petrochimia International Co. Ltd.- Taiwan
- Uttam Galva Steels Limited - India
- Karbindo Abesyapradhi - Indoneisa
- Bangladesh Power Developement Board
- Essar Steel Hazira Ltd - India
- Cigading International Bulk Terminal - Indonesia
- Siam City Cement PLC, Thailand
- Port Waratah Coal Services - Australia
- Mjunction Services Limited - India
- Power Finance Corporation Ltd., India
- Alfred C Toepfer International GmbH - Germany
- Africa Commodities Group - South Africa
- Kaltim Prima Coal - Indonesia
- IHS Mccloskey Coal Group - USA
- Ministry of Finance - Indonesia
- Straits Asia Resources Limited - Singapore
- Singapore Mercantile Exchange
- Meenaskhi Energy Private Limited - India
- Borneo Indobara - Indonesia
- Oldendorff Carriers - Singapore
- Bharathi Cement Corporation - India
- Bukit Makmur.PT - Indonesia
- The University of Queensland
- GN Power Mariveles Coal Plant, Philippines
- Thai Mozambique Logistica
- Barasentosa Lestari - Indonesia
- Sarangani Energy Corporation, Philippines
- TeaM Sual Corporation - Philippines
- Indian Oil Corporation Limited
- SMC Global Power, Philippines
- Bhatia International Limited - India
- Vizag Seaport Private Limited - India
- Banpu Public Company Limited - Thailand
- Sinarmas Energy and Mining - Indonesia
- Gujarat Electricity Regulatory Commission - India
- TNB Fuel Sdn Bhd - Malaysia
- Global Green Power PLC Corporation, Philippines
- Medco Energi Mining Internasional
- New Zealand Coal & Carbon
- Vedanta Resources Plc - India
- Ind-Barath Power Infra Limited - India
- Meralco Power Generation, Philippines
- Central Electricity Authority - India
- Salva Resources Pvt Ltd - India
- International Coal Ventures Pvt Ltd - India
- Kepco SPC Power Corporation, Philippines
- Trasteel International SA, Italy
- Georgia Ports Authority, United States
- Chamber of Mines of South Africa
- Tata Chemicals Ltd - India
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