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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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Saturday, 28 March 20
ASIA'S COAL MARKETS DIVERGE ON QUALITY LINES AS CORONAVIRUS HITS INDIA - REUTERS
Asia’s seaborne coal market is increasingly diverging between higher-quality Australian coal, where prices are holding up despite the economi ...
Friday, 27 March 20
CHINA'S BULKS: THE SENTIMENT GAP BETWEEN STEEL AND COAL WIDENS - WOOD MACKENZIE
China seems to be containing its local coronavirus situation, with imported cases now posing the greater threat. While quarantine measures remain t ...
Friday, 27 March 20
S.KOREA Q1 THERMAL COAL IMPORTS SET FOR 10-YR LOW ON ANTI-POLLUTION MEASURES - REUTERS
South Korea’s first-quarter thermal coal imports are set to fall to a decade-low due to stricter air pollution measures, while the coronaviru ...
Friday, 27 March 20
PORT OF NEWCASTLE OPERATIONS CONTINUE WITH COVID-19 RESPONSE MEASURES IN PLACE
Port of Newcastle, like many organisations, is taking a precautionary approach to help manage COVID-19 risks in the community. Our focus is on ensu ...
Thursday, 26 March 20
CHINA'S BENCHMARK POWER COAL PRICE DROPS SLIGHTLY - XINHUA
China’s benchmark power coal price dropped slightly during the past week.
The Bohai-Rim Steam-Coal Price Index (BSPI), a gauge ...
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- Offshore Bulk Terminal Pte Ltd, Singapore
- Indika Energy - Indonesia
- Sojitz Corporation - Japan
- PTC India Limited - India
- Kapuas Tunggal Persada - Indonesia
- Makarim & Taira - Indonesia
- Mercator Lines Limited - India
- Siam City Cement - Thailand
- VISA Power Limited - India
- Goldman Sachs - Singapore
- Sical Logistics Limited - India
- Rashtriya Ispat Nigam Limited - India
- Bukit Asam (Persero) Tbk - Indonesia
- Aboitiz Power Corporation - Philippines
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Electricity Generating Authority of Thailand
- TNB Fuel Sdn Bhd - Malaysia
- Bharathi Cement Corporation - India
- Toyota Tsusho Corporation, Japan
- The University of Queensland
- Binh Thuan Hamico - Vietnam
- Thiess Contractors Indonesia
- Tata Chemicals Ltd - India
- GAC Shipping (India) Pvt Ltd
- Petron Corporation, Philippines
- London Commodity Brokers - England
- Simpson Spence & Young - Indonesia
- Leighton Contractors Pty Ltd - Australia
- OPG Power Generation Pvt Ltd - India
- Indogreen Group - Indonesia
- Parry Sugars Refinery, India
- Georgia Ports Authority, United States
- Agrawal Coal Company - India
- Borneo Indobara - Indonesia
- PowerSource Philippines DevCo
- Kartika Selabumi Mining - Indonesia
- Singapore Mercantile Exchange
- Interocean Group of Companies - India
- GMR Energy Limited - India
- Wood Mackenzie - Singapore
- Metalloyd Limited - United Kingdom
- Anglo American - United Kingdom
- Sinarmas Energy and Mining - Indonesia
- Neyveli Lignite Corporation Ltd, - India
- Xindia Steels Limited - India
- The State Trading Corporation of India Ltd
- AsiaOL BioFuels Corp., Philippines
- Madhucon Powers Ltd - India
- Riau Bara Harum - Indonesia
- Formosa Plastics Group - Taiwan
- India Bulls Power Limited - India
- Tamil Nadu electricity Board
- Semirara Mining and Power Corporation, Philippines
- MS Steel International - UAE
- PNOC Exploration Corporation - Philippines
- Dalmia Cement Bharat India
- Star Paper Mills Limited - India
- Energy Development Corp, Philippines
- European Bulk Services B.V. - Netherlands
- Aditya Birla Group - India
- Straits Asia Resources Limited - Singapore
- Salva Resources Pvt Ltd - India
- Commonwealth Bank - Australia
- CIMB Investment Bank - Malaysia
- Gujarat Electricity Regulatory Commission - India
- Mjunction Services Limited - India
- Medco Energi Mining Internasional
- White Energy Company Limited
- Bangladesh Power Developement Board
- Gujarat Mineral Development Corp Ltd - India
- Thai Mozambique Logistica
- Kideco Jaya Agung - Indonesia
- Directorate General of MIneral and Coal - Indonesia
- Ceylon Electricity Board - Sri Lanka
- Mercuria Energy - Indonesia
- Global Business Power Corporation, Philippines
- Karbindo Abesyapradhi - Indoneisa
- Vizag Seaport Private Limited - India
- Marubeni Corporation - India
- Chamber of Mines of South Africa
- ASAPP Information Group - India
- Independent Power Producers Association of India
- Larsen & Toubro Limited - India
- Orica Australia Pty. Ltd.
- Economic Council, Georgia
- Meralco Power Generation, Philippines
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Deloitte Consulting - India
- Renaissance Capital - South Africa
- New Zealand Coal & Carbon
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Sakthi Sugars Limited - India
- Kumho Petrochemical, South Korea
- Indonesian Coal Mining Association
- Coastal Gujarat Power Limited - India
- Samtan Co., Ltd - South Korea
- Bukit Makmur.PT - Indonesia
- Edison Trading Spa - Italy
- Jorong Barutama Greston.PT - Indonesia
- IEA Clean Coal Centre - UK
- Global Coal Blending Company Limited - Australia
- Miang Besar Coal Terminal - Indonesia
- Alfred C Toepfer International GmbH - Germany
- The Treasury - Australian Government
- Ministry of Finance - Indonesia
- Pendopo Energi Batubara - Indonesia
- Merrill Lynch Commodities Europe
- Karaikal Port Pvt Ltd - India
- SMG Consultants - Indonesia
- Coal and Oil Company - UAE
- Bank of Tokyo Mitsubishi UFJ Ltd
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Ministry of Transport, Egypt
- Cigading International Bulk Terminal - Indonesia
- Bhushan Steel Limited - India
- Iligan Light & Power Inc, Philippines
- Krishnapatnam Port Company Ltd. - India
- Mintek Dendrill Indonesia
- Global Green Power PLC Corporation, Philippines
- Holcim Trading Pte Ltd - Singapore
- Kaltim Prima Coal - Indonesia
- Central Electricity Authority - India
- Bhoruka Overseas - Indonesia
- Vijayanagar Sugar Pvt Ltd - India
- Bukit Baiduri Energy - Indonesia
- Barasentosa Lestari - Indonesia
- International Coal Ventures Pvt Ltd - India
- GN Power Mariveles Coal Plant, Philippines
- Asmin Koalindo Tuhup - Indonesia
- Directorate Of Revenue Intelligence - India
- Africa Commodities Group - South Africa
- Globalindo Alam Lestari - Indonesia
- Savvy Resources Ltd - HongKong
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Petrochimia International Co. Ltd.- Taiwan
- Posco Energy - South Korea
- Ind-Barath Power Infra Limited - India
- Carbofer General Trading SA - India
- Videocon Industries ltd - India
- Planning Commission, India
- Latin American Coal - Colombia
- TeaM Sual Corporation - Philippines
- Sarangani Energy Corporation, Philippines
- Kohat Cement Company Ltd. - Pakistan
- Standard Chartered Bank - UAE
- Bulk Trading Sa - Switzerland
- Cement Manufacturers Association - India
- ICICI Bank Limited - India
- Energy Link Ltd, New Zealand
- SN Aboitiz Power Inc, Philippines
- Trasteel International SA, Italy
- Pipit Mutiara Jaya. PT, Indonesia
- Vedanta Resources Plc - India
- Antam Resourcindo - Indonesia
- Maharashtra Electricity Regulatory Commission - India
- Bahari Cakrawala Sebuku - Indonesia
- Semirara Mining Corp, Philippines
- Sindya Power Generating Company Private Ltd
- Maheswari Brothers Coal Limited - India
- Price Waterhouse Coopers - Russia
- Eastern Energy - Thailand
- SMC Global Power, Philippines
- Bhatia International Limited - India
- Oldendorff Carriers - Singapore
- Therma Luzon, Inc, Philippines
- Romanian Commodities Exchange
- Indo Tambangraya Megah - Indonesia
- Eastern Coal Council - USA
- Chettinad Cement Corporation Ltd - India
- Gujarat Sidhee Cement - India
- Minerals Council of Australia
- Meenaskhi Energy Private Limited - India
- Power Finance Corporation Ltd., India
- PetroVietnam Power Coal Import and Supply Company
- Electricity Authority, New Zealand
- Heidelberg Cement - Germany
- Kobexindo Tractors - Indoneisa
- Jaiprakash Power Ventures ltd
- Baramulti Group, Indonesia
- Coalindo Energy - Indonesia
- LBH Netherlands Bv - Netherlands
- Altura Mining Limited, Indonesia
- Wilmar Investment Holdings
- Sree Jayajothi Cements Limited - India
- San Jose City I Power Corp, Philippines
- Timah Investasi Mineral - Indoneisa
- Australian Coal Association
- Grasim Industreis Ltd - India
- Billiton Holdings Pty Ltd - Australia
- Kepco SPC Power Corporation, Philippines
- Indian Energy Exchange, India
- Port Waratah Coal Services - Australia
- Australian Commodity Traders Exchange
- Kalimantan Lumbung Energi - Indonesia
- Intertek Mineral Services - Indonesia
- Attock Cement Pakistan Limited
- Malabar Cements Ltd - India
- Siam City Cement PLC, Thailand
- GVK Power & Infra Limited - India
- CNBM International Corporation - China
- Banpu Public Company Limited - Thailand
- Essar Steel Hazira Ltd - India
- Central Java Power - Indonesia
- Uttam Galva Steels Limited - India
- Indian Oil Corporation Limited
- IHS Mccloskey Coal Group - USA
- Manunggal Multi Energi - Indonesia
- Orica Mining Services - Indonesia
- Parliament of New Zealand
- Ambuja Cements Ltd - India
- South Luzon Thermal Energy Corporation
- Bayan Resources Tbk. - Indonesia
- Lanco Infratech Ltd - India
- Ministry of Mines - Canada
- Rio Tinto Coal - Australia
- Jindal Steel & Power Ltd - India
- McConnell Dowell - Australia
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