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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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Friday, 24 April 20
CHINA COAL PRODUCER YANZHOU COAL POSTS 9.6 PCT RISE IN 2019 NET PROFIT - XINHUA
China’s major coal producer Yanzhou Coal Mining Co., Ltd. said Thursday that its net profit saw a 9.6 percent rise in 2019.
Th ...
Tuesday, 21 April 20
INDONESIA ACCOUNTS FOR 19% OF JAPAN'S TOTAL COAL IMPORTS - BANCHERO COSTA
Coal trade in Asia is proving remarkably resilient this year, despite the global economic impact from COVID-19.
We have seen China&r ...
Tuesday, 21 April 20
COVID-19: CHARTERPARTY MATTERS FOR SHIPOWNERS - SKULD
KNOWLEDGE TO ELEVATE
Whilst the plight of cruise ships, stranded off shore with sick passengers and crew, may be dominating media headlines, t ...
Monday, 20 April 20
SUPRAMAX: A 52,000DWT SHIP FIXING AN INDONESIA COAL RUN TO CHINA AT $4400 - BALTIC BRIEFING
Capesize
This week was the strongest period seen for the Capesize market in several months. All routes globally succumbed to improved sentiment ...
Friday, 17 April 20
PANDEMIC TO BRING ASIA'S 2020 GROWTH TO HALT FOR 1ST TIME IN 60 YEARS - IMF: REUTERS
Asia’s economic growth this year will grind to a halt for the first time in 60 years, as the coronavirus crisis takes an “unprecedented ...
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- Ministry of Mines - Canada
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Central Java Power - Indonesia
- Bhoruka Overseas - Indonesia
- Ministry of Transport, Egypt
- Sojitz Corporation - Japan
- Singapore Mercantile Exchange
- Essar Steel Hazira Ltd - India
- Metalloyd Limited - United Kingdom
- Kohat Cement Company Ltd. - Pakistan
- Pendopo Energi Batubara - Indonesia
- Mjunction Services Limited - India
- The Treasury - Australian Government
- GVK Power & Infra Limited - India
- Baramulti Group, Indonesia
- Dalmia Cement Bharat India
- Semirara Mining and Power Corporation, Philippines
- Uttam Galva Steels Limited - India
- Minerals Council of Australia
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Eastern Coal Council - USA
- Neyveli Lignite Corporation Ltd, - India
- Indika Energy - Indonesia
- Kumho Petrochemical, South Korea
- SMC Global Power, Philippines
- Meenaskhi Energy Private Limited - India
- Billiton Holdings Pty Ltd - Australia
- Asmin Koalindo Tuhup - Indonesia
- Intertek Mineral Services - Indonesia
- Ind-Barath Power Infra Limited - India
- Economic Council, Georgia
- Semirara Mining Corp, Philippines
- TNB Fuel Sdn Bhd - Malaysia
- Siam City Cement PLC, Thailand
- Bhatia International Limited - India
- Georgia Ports Authority, United States
- Coal and Oil Company - UAE
- Wood Mackenzie - Singapore
- Latin American Coal - Colombia
- Global Business Power Corporation, Philippines
- Heidelberg Cement - Germany
- Global Coal Blending Company Limited - Australia
- VISA Power Limited - India
- Siam City Cement - Thailand
- PetroVietnam Power Coal Import and Supply Company
- SN Aboitiz Power Inc, Philippines
- Salva Resources Pvt Ltd - India
- Riau Bara Harum - Indonesia
- Cement Manufacturers Association - India
- Attock Cement Pakistan Limited
- The University of Queensland
- ASAPP Information Group - India
- Gujarat Electricity Regulatory Commission - India
- Rashtriya Ispat Nigam Limited - India
- Petron Corporation, Philippines
- European Bulk Services B.V. - Netherlands
- Goldman Sachs - Singapore
- Holcim Trading Pte Ltd - Singapore
- Edison Trading Spa - Italy
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Sindya Power Generating Company Private Ltd
- Timah Investasi Mineral - Indoneisa
- White Energy Company Limited
- Maharashtra Electricity Regulatory Commission - India
- Miang Besar Coal Terminal - Indonesia
- Samtan Co., Ltd - South Korea
- Vedanta Resources Plc - India
- MS Steel International - UAE
- ICICI Bank Limited - India
- Aboitiz Power Corporation - Philippines
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Romanian Commodities Exchange
- GAC Shipping (India) Pvt Ltd
- OPG Power Generation Pvt Ltd - India
- Binh Thuan Hamico - Vietnam
- Bayan Resources Tbk. - Indonesia
- Coastal Gujarat Power Limited - India
- Karaikal Port Pvt Ltd - India
- Australian Coal Association
- Aditya Birla Group - India
- Orica Australia Pty. Ltd.
- Antam Resourcindo - Indonesia
- AsiaOL BioFuels Corp., Philippines
- Carbofer General Trading SA - India
- South Luzon Thermal Energy Corporation
- Kobexindo Tractors - Indoneisa
- Savvy Resources Ltd - HongKong
- Medco Energi Mining Internasional
- Jindal Steel & Power Ltd - India
- Alfred C Toepfer International GmbH - Germany
- IEA Clean Coal Centre - UK
- Straits Asia Resources Limited - Singapore
- Lanco Infratech Ltd - India
- Planning Commission, India
- Mercator Lines Limited - India
- Merrill Lynch Commodities Europe
- Price Waterhouse Coopers - Russia
- Kalimantan Lumbung Energi - Indonesia
- Sree Jayajothi Cements Limited - India
- Videocon Industries ltd - India
- Deloitte Consulting - India
- Bulk Trading Sa - Switzerland
- Thiess Contractors Indonesia
- Chettinad Cement Corporation Ltd - India
- Oldendorff Carriers - Singapore
- Port Waratah Coal Services - Australia
- Anglo American - United Kingdom
- Indonesian Coal Mining Association
- SMG Consultants - Indonesia
- New Zealand Coal & Carbon
- Indian Energy Exchange, India
- Sical Logistics Limited - India
- Electricity Generating Authority of Thailand
- Eastern Energy - Thailand
- Rio Tinto Coal - Australia
- Energy Link Ltd, New Zealand
- Grasim Industreis Ltd - India
- Central Electricity Authority - India
- Star Paper Mills Limited - India
- Kideco Jaya Agung - Indonesia
- Jaiprakash Power Ventures ltd
- Power Finance Corporation Ltd., India
- London Commodity Brokers - England
- Chamber of Mines of South Africa
- Maheswari Brothers Coal Limited - India
- Offshore Bulk Terminal Pte Ltd, Singapore
- Petrochimia International Co. Ltd.- Taiwan
- Bharathi Cement Corporation - India
- Manunggal Multi Energi - Indonesia
- Tamil Nadu electricity Board
- IHS Mccloskey Coal Group - USA
- Ceylon Electricity Board - Sri Lanka
- McConnell Dowell - Australia
- Meralco Power Generation, Philippines
- Formosa Plastics Group - Taiwan
- TeaM Sual Corporation - Philippines
- Indo Tambangraya Megah - Indonesia
- Bhushan Steel Limited - India
- Indogreen Group - Indonesia
- Sarangani Energy Corporation, Philippines
- Bukit Baiduri Energy - Indonesia
- LBH Netherlands Bv - Netherlands
- Iligan Light & Power Inc, Philippines
- GMR Energy Limited - India
- Madhucon Powers Ltd - India
- Thai Mozambique Logistica
- Malabar Cements Ltd - India
- Borneo Indobara - Indonesia
- Makarim & Taira - Indonesia
- Pipit Mutiara Jaya. PT, Indonesia
- Kapuas Tunggal Persada - Indonesia
- The State Trading Corporation of India Ltd
- Bangladesh Power Developement Board
- Coalindo Energy - Indonesia
- Gujarat Mineral Development Corp Ltd - India
- Electricity Authority, New Zealand
- Sakthi Sugars Limited - India
- Bahari Cakrawala Sebuku - Indonesia
- Interocean Group of Companies - India
- Standard Chartered Bank - UAE
- CIMB Investment Bank - Malaysia
- Mintek Dendrill Indonesia
- Posco Energy - South Korea
- Directorate Of Revenue Intelligence - India
- PTC India Limited - India
- CNBM International Corporation - China
- Commonwealth Bank - Australia
- Trasteel International SA, Italy
- Jorong Barutama Greston.PT - Indonesia
- Agrawal Coal Company - India
- Energy Development Corp, Philippines
- Global Green Power PLC Corporation, Philippines
- Larsen & Toubro Limited - India
- Marubeni Corporation - India
- Toyota Tsusho Corporation, Japan
- Simpson Spence & Young - Indonesia
- India Bulls Power Limited - India
- Vijayanagar Sugar Pvt Ltd - India
- Parry Sugars Refinery, India
- Banpu Public Company Limited - Thailand
- Vizag Seaport Private Limited - India
- Karbindo Abesyapradhi - Indoneisa
- GN Power Mariveles Coal Plant, Philippines
- Ministry of Finance - Indonesia
- San Jose City I Power Corp, Philippines
- Cigading International Bulk Terminal - Indonesia
- PowerSource Philippines DevCo
- International Coal Ventures Pvt Ltd - India
- Xindia Steels Limited - India
- Parliament of New Zealand
- Bank of Tokyo Mitsubishi UFJ Ltd
- Globalindo Alam Lestari - Indonesia
- Gujarat Sidhee Cement - India
- Altura Mining Limited, Indonesia
- Australian Commodity Traders Exchange
- Ambuja Cements Ltd - India
- Independent Power Producers Association of India
- Leighton Contractors Pty Ltd - Australia
- Bukit Makmur.PT - Indonesia
- Renaissance Capital - South Africa
- Krishnapatnam Port Company Ltd. - India
- Bukit Asam (Persero) Tbk - Indonesia
- Tata Chemicals Ltd - India
- Sinarmas Energy and Mining - Indonesia
- Therma Luzon, Inc, Philippines
- Mercuria Energy - Indonesia
- Directorate General of MIneral and Coal - Indonesia
- Kepco SPC Power Corporation, Philippines
- Barasentosa Lestari - Indonesia
- Wilmar Investment Holdings
- Kartika Selabumi Mining - Indonesia
- Africa Commodities Group - South Africa
- PNOC Exploration Corporation - Philippines
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Orica Mining Services - Indonesia
- Indian Oil Corporation Limited
- Kaltim Prima Coal - Indonesia
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