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Wednesday, 10 June 20
OPEC+ CUTS EXTENSION TO ACCELERATE MARKET REBALANCING - FITCH RATINGS
 Fitch Ratings-London-08 June 2020: The OPEC+ agreement to extend by one month record oil production cuts should accelerate market rebalancing, Fitch Ratings says. This is further supported by a commitment to improve compliance from those countries that were unable to reach full conformity with the cuts.
The OPEC+ countries have made radical production cuts in the stress scenario, but it may be more difficult to reach a consensus when the worst of the crisis is over. And it is unclear whether the recovery in oil prices to date is sustainable. Furthermore, demand and production in non-OPEC+ countries, notably the US, will continue to have a significant impact on the supply-demand balance and prices. We believe that a normalisation of oil inventory built up in 1H20 will take at least several months.
Crude oil prices rose significantly in May and continued to improve in early June, because the surplus has been reduced materially. A price differential between the physical and financial markets has disappeared, pointing to crude oil market tightening. We believe that a stress case scenario with prices falling significantly below USD30/bbl is now less likely. The market is likely to experience a production deficit in 2H20 due to gradually improving demand and reduced supply.
The OPEC+ cuts were the major contributor to market rebalancing. We estimate that the OPEC+ countries reduced production by around 7.5mmbpd in May compared to March. The cumulative OPEC+ cuts should exceed 9mmbpd in June as Saudi Arabia, Kuwait and UAE have committed to cut an additional 1.1mmbpd, while Iraq and Nigeria, which underperformed in May, have promised to improve compliance in June. A resumption of production in Libya, which is not subject to the OPEC+ deal, may increase supply but should be more than offset by additional cuts elsewhere.
Furthermore, production fell in the US as a result both of shut-ins and reduced drilling activity by almost 2mmbpd at end-May compared to March, while Canada cut around 1mmbpd. The number of active drilling rigs in the US declined by 64% compared to the beginning of the year. Production in North America may continue to shrink for a while, but the pace is likely to decelerate due to increased prices. We believe that at USD30/bbl, many producers should be able to stabilise production, while at USD40/bbl or above some would be tempted to increase output, which could limit price recovery.
Estimates suggest crude oil demand increased in May compared to April, and we believe it will improve further from June due to the gradual lifting of lockdown restrictions. Implied oil products consumption in the US improved from a 28% drop in April yoy to a 20% drop in May, driven mainly by increased gasoline consumption (a yoy decline of 25% in May compared to a 44% decline in April), while the consumption of jet fuel remained flat. We believe consumption patterns are similar in Europe, while demand in China bottomed out in February.
Demand recovery is now key in achieving balance in the oil market. It could be undermined in the event of a second coronavirus wave and the re-introduction of lockdowns, although it is not our base case. While consumption of gasoline and diesel could recover by the year-end, jet fuel may lag behind as international travel restrictions may remain in place and demand for business travel may be structurally impaired.
Our ratings are informed by companies’ projected performance at end-2021, rather than in 2020, provided their liquidity is adequate, as we rate “through the cycle”. While we may recalibrate our near-term oil price assumptions to the pace of market rebalancing, our ratings already assume that the market will recover gradually; therefore the most recent improvements will not prompt portfolio-wide rating actions.
Source: Fitch Ratings
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Wednesday, 01 July 20
COLOMBIA'S COAL EXPORT VOLUMES HAVE STEADILY DECLINED IN RECENT YEARS - BANCHERO COSTA
Colombia is the world’s fifth largest seaborne exporter of coal, coming after Australia, Indonesia, Russia and the USA.
Export ...
Wednesday, 01 July 20
MARKET INSIGHT - INTERMODAL
It was beginning of 2020 – close to 6 months from now – when we first experienced the huge impact of the COVID 19 outbreak on Ship Repa ...
Monday, 29 June 20
INDONESIAN COAL AT THE MERCY OF THE DRAGON AND TIGER - GHEE PEH | IEEFA
Coal sector analysts have been busy in recent months mapping the negative impact of low coal prices from the COVID-19 pandemic on Indonesian coal c ...
Monday, 29 June 20
FALLING DEMAND IN CHINA AND INDIA SIGNAL TOUGH TIMES AHEAD FOR INDONESIAN EXPORTS - GHEE PEH | EEFA
Assessing the Impact on Indonesian Coal Companies
The bad news for Indonesia’s coal companies is that they are likely to have ...
Monday, 29 June 20
INDIA COAL IMPORT OUTLOOK: WEAK DEMAND, IMPORT SUBSTITUTION, EXPECT 20% YOY DECLINE - GHEE PEH | IEEFA
For India, the coal demand indicators have clearly turned negative.
According to Argus Media, since the government declared a ...
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- Vizag Seaport Private Limited - India
- Bhoruka Overseas - Indonesia
- Goldman Sachs - Singapore
- Billiton Holdings Pty Ltd - Australia
- Trasteel International SA, Italy
- Jaiprakash Power Ventures ltd
- Kumho Petrochemical, South Korea
- Heidelberg Cement - Germany
- Electricity Generating Authority of Thailand
- Bukit Asam (Persero) Tbk - Indonesia
- Bukit Baiduri Energy - Indonesia
- Singapore Mercantile Exchange
- Tamil Nadu electricity Board
- Meenaskhi Energy Private Limited - India
- Central Java Power - Indonesia
- The State Trading Corporation of India Ltd
- Ministry of Finance - Indonesia
- The University of Queensland
- Global Business Power Corporation, Philippines
- India Bulls Power Limited - India
- Barasentosa Lestari - Indonesia
- Bhushan Steel Limited - India
- Price Waterhouse Coopers - Russia
- Indian Oil Corporation Limited
- Globalindo Alam Lestari - Indonesia
- London Commodity Brokers - England
- Gujarat Mineral Development Corp Ltd - India
- Toyota Tsusho Corporation, Japan
- Lanco Infratech Ltd - India
- Bulk Trading Sa - Switzerland
- Miang Besar Coal Terminal - Indonesia
- Indo Tambangraya Megah - Indonesia
- Kaltim Prima Coal - Indonesia
- Uttam Galva Steels Limited - India
- Makarim & Taira - Indonesia
- Coalindo Energy - Indonesia
- Mjunction Services Limited - India
- Tata Chemicals Ltd - India
- Gujarat Sidhee Cement - India
- Sakthi Sugars Limited - India
- Power Finance Corporation Ltd., India
- Georgia Ports Authority, United States
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Thiess Contractors Indonesia
- Ambuja Cements Ltd - India
- Mintek Dendrill Indonesia
- Bank of Tokyo Mitsubishi UFJ Ltd
- Altura Mining Limited, Indonesia
- Alfred C Toepfer International GmbH - Germany
- Orica Australia Pty. Ltd.
- Central Electricity Authority - India
- Gujarat Electricity Regulatory Commission - India
- Savvy Resources Ltd - HongKong
- Essar Steel Hazira Ltd - India
- Bhatia International Limited - India
- Petrochimia International Co. Ltd.- Taiwan
- GN Power Mariveles Coal Plant, Philippines
- Star Paper Mills Limited - India
- Medco Energi Mining Internasional
- AsiaOL BioFuels Corp., Philippines
- Krishnapatnam Port Company Ltd. - India
- Bangladesh Power Developement Board
- International Coal Ventures Pvt Ltd - India
- Bukit Makmur.PT - Indonesia
- Meralco Power Generation, Philippines
- Therma Luzon, Inc, Philippines
- Kohat Cement Company Ltd. - Pakistan
- Posco Energy - South Korea
- Cement Manufacturers Association - India
- ASAPP Information Group - India
- Economic Council, Georgia
- LBH Netherlands Bv - Netherlands
- GAC Shipping (India) Pvt Ltd
- Kalimantan Lumbung Energi - Indonesia
- Asmin Koalindo Tuhup - Indonesia
- IEA Clean Coal Centre - UK
- GMR Energy Limited - India
- Banpu Public Company Limited - Thailand
- CIMB Investment Bank - Malaysia
- Sinarmas Energy and Mining - Indonesia
- Semirara Mining and Power Corporation, Philippines
- Indian Energy Exchange, India
- Binh Thuan Hamico - Vietnam
- Manunggal Multi Energi - Indonesia
- Wood Mackenzie - Singapore
- Ceylon Electricity Board - Sri Lanka
- TeaM Sual Corporation - Philippines
- Australian Coal Association
- European Bulk Services B.V. - Netherlands
- CNBM International Corporation - China
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Leighton Contractors Pty Ltd - Australia
- Deloitte Consulting - India
- White Energy Company Limited
- Kideco Jaya Agung - Indonesia
- Sree Jayajothi Cements Limited - India
- PNOC Exploration Corporation - Philippines
- San Jose City I Power Corp, Philippines
- Interocean Group of Companies - India
- Baramulti Group, Indonesia
- Sojitz Corporation - Japan
- Ministry of Mines - Canada
- Global Coal Blending Company Limited - Australia
- Aboitiz Power Corporation - Philippines
- Iligan Light & Power Inc, Philippines
- Holcim Trading Pte Ltd - Singapore
- PetroVietnam Power Coal Import and Supply Company
- Planning Commission, India
- Offshore Bulk Terminal Pte Ltd, Singapore
- Sical Logistics Limited - India
- Vijayanagar Sugar Pvt Ltd - India
- Ind-Barath Power Infra Limited - India
- Siam City Cement PLC, Thailand
- Energy Development Corp, Philippines
- Standard Chartered Bank - UAE
- Siam City Cement - Thailand
- Jindal Steel & Power Ltd - India
- Bayan Resources Tbk. - Indonesia
- SMC Global Power, Philippines
- Xindia Steels Limited - India
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Sarangani Energy Corporation, Philippines
- Minerals Council of Australia
- Directorate Of Revenue Intelligence - India
- Attock Cement Pakistan Limited
- Marubeni Corporation - India
- Eastern Energy - Thailand
- Riau Bara Harum - Indonesia
- McConnell Dowell - Australia
- SMG Consultants - Indonesia
- PowerSource Philippines DevCo
- The Treasury - Australian Government
- Cigading International Bulk Terminal - Indonesia
- Thai Mozambique Logistica
- Renaissance Capital - South Africa
- Aditya Birla Group - India
- Carbofer General Trading SA - India
- Merrill Lynch Commodities Europe
- Commonwealth Bank - Australia
- Karaikal Port Pvt Ltd - India
- Semirara Mining Corp, Philippines
- Pipit Mutiara Jaya. PT, Indonesia
- Vedanta Resources Plc - India
- Eastern Coal Council - USA
- Agrawal Coal Company - India
- New Zealand Coal & Carbon
- Mercuria Energy - Indonesia
- Indogreen Group - Indonesia
- Maheswari Brothers Coal Limited - India
- GVK Power & Infra Limited - India
- Coastal Gujarat Power Limited - India
- Africa Commodities Group - South Africa
- Australian Commodity Traders Exchange
- Salva Resources Pvt Ltd - India
- Petron Corporation, Philippines
- Jorong Barutama Greston.PT - Indonesia
- OPG Power Generation Pvt Ltd - India
- Karbindo Abesyapradhi - Indoneisa
- Kepco SPC Power Corporation, Philippines
- Larsen & Toubro Limited - India
- Chamber of Mines of South Africa
- Videocon Industries ltd - India
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Neyveli Lignite Corporation Ltd, - India
- Madhucon Powers Ltd - India
- Energy Link Ltd, New Zealand
- Global Green Power PLC Corporation, Philippines
- IHS Mccloskey Coal Group - USA
- Directorate General of MIneral and Coal - Indonesia
- Coal and Oil Company - UAE
- Simpson Spence & Young - Indonesia
- Borneo Indobara - Indonesia
- Parliament of New Zealand
- Edison Trading Spa - Italy
- Antam Resourcindo - Indonesia
- Sindya Power Generating Company Private Ltd
- Oldendorff Carriers - Singapore
- Rashtriya Ispat Nigam Limited - India
- Bharathi Cement Corporation - India
- Samtan Co., Ltd - South Korea
- Pendopo Energi Batubara - Indonesia
- Kapuas Tunggal Persada - Indonesia
- Grasim Industreis Ltd - India
- Dalmia Cement Bharat India
- Chettinad Cement Corporation Ltd - India
- Kartika Selabumi Mining - Indonesia
- MS Steel International - UAE
- Anglo American - United Kingdom
- VISA Power Limited - India
- Malabar Cements Ltd - India
- Intertek Mineral Services - Indonesia
- Metalloyd Limited - United Kingdom
- Independent Power Producers Association of India
- Port Waratah Coal Services - Australia
- Maharashtra Electricity Regulatory Commission - India
- Bahari Cakrawala Sebuku - Indonesia
- Orica Mining Services - Indonesia
- Parry Sugars Refinery, India
- Wilmar Investment Holdings
- Mercator Lines Limited - India
- SN Aboitiz Power Inc, Philippines
- Indonesian Coal Mining Association
- Straits Asia Resources Limited - Singapore
- Electricity Authority, New Zealand
- Timah Investasi Mineral - Indoneisa
- Indika Energy - Indonesia
- Formosa Plastics Group - Taiwan
- Ministry of Transport, Egypt
- Romanian Commodities Exchange
- Latin American Coal - Colombia
- TNB Fuel Sdn Bhd - Malaysia
- Kobexindo Tractors - Indoneisa
- PTC India Limited - India
- Rio Tinto Coal - Australia
- South Luzon Thermal Energy Corporation
- ICICI Bank Limited - India
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