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Thursday, 12 December 13
GREAT EXPECTATIONS SANCTIONED - EVA TZIMA
 News that sanctions on Iranian oil exports could be lifted sometime in the following months have shaken the markets recently. One of the world’s top oil suppliers historically and once OPEC’ s 2nd largest producer, Iran, has seen its exports squished since 2012, when both the U.S. and the European Union imposed additional sanctions against the country’s oil exports.
The sanctions that were imposed on the basis that Iran’s nuclear programme included enrichment of uranium, which if surpasses certain levels of purity can be used to develop nuclear weapons, affected extensively Iran’s economy. Following U.S.’s Comprehensive Iran Sanctions, Accountability, and Divestment Act (CIS ADA), a law passed in the summer of 2010 by the Congress, the E.U. also placed significant restrictions on foreign trade, financial services, energy sectors and technologies related to Iran. Additionally, the provision of insurance by firms incorporated in any E.U. member country, to Iranian-owned companies, was banned. With oil and gas production accounting for almost half of the local government’s income, the country’s current account surplus for 2012 has dropped more than 50% compared to 2011, while at the same time Iranian assets and funds were blocked due to the international sanctions.
With over 5% of the global sea borne exports coming from Iran up until 2012 and with domestic reserves placing the country at number four on the world’s largest oil reserves list, the knee jerk reaction was that lifting of these sanctions was great news for the tanker sector. Right when freight rates for the crude oil carriers have started catching a significant break, such development would come as the cherry on the top of a strengthening market and a possible recovery within 2014. As the noise has started to settle down though, it has become more evident that the outcome of all this is still very uncertain both for the timeframe during which sanctions will be lifted, as well as for the sort and scale of impact this could have on the fate of crude carriers.
The effects of Iran becoming a no-trade zone have been in tensely felt in the shipping industry, as the total restrictions for oil and gas exports have hurt seaborne trade in the region and elsewhere. On the one hand, European Union member states accounted for around 20% of Iran’s oil exports prior to the 2012 sanctions, while at the same time indirect restrictions were placed even for big importing countries of Iranian oil who didn’t impose sanctions themselves. In fact, as the U.S. targeted the country’s revenue from oil exports, it committed to cut off from the U.S. banking system any international financial institution that engaged into oil related transactions with Iran’ s central bank. That led the top importers of Iranian oil, like China, India, Japan and S. Korea, to reduce the number of Iranian crude in to their countries. This weighed further down on seaborne traded volumes and on top of that, any ship insurance cover from the sanction imposing countries was also rendered impossible; So, remove the sanctions and you get a healthier market back. Financial institutions are allowed to back up Iran related transactions, P&I clubs will start insuring cargoes and ships involved in the trade, Iranian funds t hat have been frozen all these years will be unblocked permitting for a significant liquidity boost in the oil market and crude exports both in the Med and Asia region will reach pre-2012 volumes again or even surpass them especially since Far East appetite for oil has been firing up again recently; Picture perfect for sure but don’t pop up the champagne just yet…
The reality is that the recent deal reached in Geneva will for now only allow “limited, targeted and reversible relief” from the existing sanctions. From Iran’s side, one of the main commitments involves halting enrichment of uranium over 5%. In return, world powers will put an end to specific sanctions involving the trade of petrochemicals, gold and the automotive sector, while they will also allow for $4.2bn of oil related funds to be transferred back to the country. This means that there is currently no commitment for oil related sanctions to be lifted in the near future and this is certainly a massive political hot potato for any world leader who decides to touch it, and one that cannot be easily reversed if a no sanctions path is carved. Businesses involved in sectors previously or currently affected by the sanctions will not jump to do business with Iran either. I would think that they will choose to wait for now and get involved only after a long period of time ha s passed, avoiding any back and forth on the sanction policy, as they wouldn’t want to risk seeing themselves or their funds being tainted in the process.
But irrespective of the developments surrounding the sanctions, as far as the trade of oil is concerned, the fact is that it has been the demand side of the trade driving the volumes rather than the supply. While the supply of crude coming from Iran has hit employment of tankers, in reality, the sector hasn’t suffered that long due to scarcity of cargoes but rather because of continuous subdued demand for the commodity, on the back of slowing down economies and increase in the price of oil itself. Nonetheless, the most worrying aspect in my opinion is the great expectations removal of sanctions can create in the market. The false sense of a possible demand spike that might o r might not happen, can lead to over optimistic expectations by owners and boost ordering in segments like that of VLs, the order book of which has been relatively healthy up until recently, leading to another vicious cycle of tonnage oversupply. Hopefully not.
Compiled by:
Intermodal Research & Valuations | research@intermodal.gr
Analysts:
Mr. George Lazaridis | g.lazaridis@intermodal.gr
Ms. Eva Tzima | e.tzima@intermodal.gr
Disclaimer and legal disclosure: For any further queries please do not hesitate to contact our Research & Valuations Department. The information contained in this report has been obtained from various sources, as reported in the market. Intermodal Shipbrokers Co. believes such information to be factual and reliable without making guarantees regarding its accuracy or completeness. Whilst every care has been taken in the production of the above review, no liability can be accepted for any loss or damage incurred in any way whatsoever by any person who may seek to rely on the information and views contained in this material. This report is being produced for the internal use of the intended recipients only and no re-producing is allowed, without the prior written authorization of Intermodal Shipbrokers Co.
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Tuesday, 22 October 13
KOWEPO INVITED BIDS FOR MULTI GRADE COAL
COALspot.com - Korea Western Power Co., Ltd. (KOWEPO), a Korean electricity generator intends to procure 240,000 tons of multi grade coal for its Ta ...
Monday, 21 October 13
SOUTH CHINA COAL SWAP FOR 2014 DELIVERIES SHOW A POSITIVE TREND
COALspot.com : API 8 CFR South China Coal swaps for average Q4 2013 delivery fell 0.02 percept M-M on Friday 18 October 2013. The CFR South China Co ...
Sunday, 20 October 13
Q3'14 SUB-BIT INDO COAL SWAP CLOSED AT $ 61.80 PMT W/E 18 OCT' 13
COALspot.com – Sub-Bit Indonesia coal swap (FOB ) for average Q4 2013 delivery fell 0.93 percept month on month on Friday 18 October 201 ...
Saturday, 19 October 13
NICKEL ORE SHIPMENTS KEEP SUPRAMAX CHARTER RATES STEADY - CAPT. REDDY
COALspot.com : The futures freight market continued to go down which was reflected in the physical markets as well.
The BDI continued to be soft ...
Friday, 18 October 13
WOOD MACKENZIE FORECASTS CHINA WILL OUTWEIGH THE REST OF THE WORLD FOR BASE METALS DEMAND BY 2017
China set to account for 52% of 117mt base metals market by 2017
China is on track to exceed rest of the World demand by 2017, becoming the singl ...
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- Central Java Power - Indonesia
- Bhushan Steel Limited - India
- Antam Resourcindo - Indonesia
- Kapuas Tunggal Persada - Indonesia
- PNOC Exploration Corporation - Philippines
- Pendopo Energi Batubara - Indonesia
- VISA Power Limited - India
- Eastern Coal Council - USA
- ICICI Bank Limited - India
- LBH Netherlands Bv - Netherlands
- San Jose City I Power Corp, Philippines
- The University of Queensland
- Straits Asia Resources Limited - Singapore
- Savvy Resources Ltd - HongKong
- SMG Consultants - Indonesia
- Rashtriya Ispat Nigam Limited - India
- Bhoruka Overseas - Indonesia
- Kartika Selabumi Mining - Indonesia
- Xindia Steels Limited - India
- IEA Clean Coal Centre - UK
- Asmin Koalindo Tuhup - Indonesia
- Australian Coal Association
- Sinarmas Energy and Mining - Indonesia
- Interocean Group of Companies - India
- CNBM International Corporation - China
- Marubeni Corporation - India
- Electricity Generating Authority of Thailand
- Wood Mackenzie - Singapore
- Petron Corporation, Philippines
- Mercator Lines Limited - India
- Port Waratah Coal Services - Australia
- Meralco Power Generation, Philippines
- Jaiprakash Power Ventures ltd
- Australian Commodity Traders Exchange
- Gujarat Electricity Regulatory Commission - India
- Indonesian Coal Mining Association
- Banpu Public Company Limited - Thailand
- Ceylon Electricity Board - Sri Lanka
- Posco Energy - South Korea
- Eastern Energy - Thailand
- The Treasury - Australian Government
- Coalindo Energy - Indonesia
- Indogreen Group - Indonesia
- Oldendorff Carriers - Singapore
- Miang Besar Coal Terminal - Indonesia
- Bharathi Cement Corporation - India
- Rio Tinto Coal - Australia
- Global Green Power PLC Corporation, Philippines
- Indika Energy - Indonesia
- TeaM Sual Corporation - Philippines
- Ministry of Transport, Egypt
- TNB Fuel Sdn Bhd - Malaysia
- Maharashtra Electricity Regulatory Commission - India
- Riau Bara Harum - Indonesia
- Jindal Steel & Power Ltd - India
- International Coal Ventures Pvt Ltd - India
- Holcim Trading Pte Ltd - Singapore
- Larsen & Toubro Limited - India
- Jorong Barutama Greston.PT - Indonesia
- Therma Luzon, Inc, Philippines
- Parry Sugars Refinery, India
- Billiton Holdings Pty Ltd - Australia
- Ind-Barath Power Infra Limited - India
- MS Steel International - UAE
- Sarangani Energy Corporation, Philippines
- Energy Link Ltd, New Zealand
- Maheswari Brothers Coal Limited - India
- Parliament of New Zealand
- Baramulti Group, Indonesia
- White Energy Company Limited
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Leighton Contractors Pty Ltd - Australia
- Salva Resources Pvt Ltd - India
- Independent Power Producers Association of India
- Sojitz Corporation - Japan
- Grasim Industreis Ltd - India
- ASAPP Information Group - India
- Videocon Industries ltd - India
- Globalindo Alam Lestari - Indonesia
- Borneo Indobara - Indonesia
- Bukit Baiduri Energy - Indonesia
- South Luzon Thermal Energy Corporation
- Aditya Birla Group - India
- Alfred C Toepfer International GmbH - Germany
- Planning Commission, India
- Kohat Cement Company Ltd. - Pakistan
- India Bulls Power Limited - India
- Heidelberg Cement - Germany
- Sakthi Sugars Limited - India
- Tata Chemicals Ltd - India
- Minerals Council of Australia
- GN Power Mariveles Coal Plant, Philippines
- Ministry of Mines - Canada
- Chettinad Cement Corporation Ltd - India
- Binh Thuan Hamico - Vietnam
- Bangladesh Power Developement Board
- Manunggal Multi Energi - Indonesia
- GAC Shipping (India) Pvt Ltd
- Bukit Asam (Persero) Tbk - Indonesia
- Thai Mozambique Logistica
- Cement Manufacturers Association - India
- Deloitte Consulting - India
- Vijayanagar Sugar Pvt Ltd - India
- Makarim & Taira - Indonesia
- Altura Mining Limited, Indonesia
- Karaikal Port Pvt Ltd - India
- Gujarat Sidhee Cement - India
- Kumho Petrochemical, South Korea
- McConnell Dowell - Australia
- Karbindo Abesyapradhi - Indoneisa
- Orica Mining Services - Indonesia
- Anglo American - United Kingdom
- Kaltim Prima Coal - Indonesia
- PowerSource Philippines DevCo
- Indo Tambangraya Megah - Indonesia
- Krishnapatnam Port Company Ltd. - India
- Metalloyd Limited - United Kingdom
- Wilmar Investment Holdings
- GVK Power & Infra Limited - India
- Siam City Cement - Thailand
- Indian Energy Exchange, India
- Sree Jayajothi Cements Limited - India
- Madhucon Powers Ltd - India
- Semirara Mining and Power Corporation, Philippines
- PTC India Limited - India
- Pipit Mutiara Jaya. PT, Indonesia
- Timah Investasi Mineral - Indoneisa
- Essar Steel Hazira Ltd - India
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Price Waterhouse Coopers - Russia
- Uttam Galva Steels Limited - India
- Africa Commodities Group - South Africa
- Malabar Cements Ltd - India
- Bulk Trading Sa - Switzerland
- Medco Energi Mining Internasional
- Standard Chartered Bank - UAE
- Trasteel International SA, Italy
- London Commodity Brokers - England
- Goldman Sachs - Singapore
- PetroVietnam Power Coal Import and Supply Company
- Cigading International Bulk Terminal - Indonesia
- Vedanta Resources Plc - India
- European Bulk Services B.V. - Netherlands
- Barasentosa Lestari - Indonesia
- Directorate Of Revenue Intelligence - India
- Attock Cement Pakistan Limited
- Power Finance Corporation Ltd., India
- Iligan Light & Power Inc, Philippines
- New Zealand Coal & Carbon
- SN Aboitiz Power Inc, Philippines
- Renaissance Capital - South Africa
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Electricity Authority, New Zealand
- Orica Australia Pty. Ltd.
- Siam City Cement PLC, Thailand
- Kobexindo Tractors - Indoneisa
- Commonwealth Bank - Australia
- IHS Mccloskey Coal Group - USA
- Bahari Cakrawala Sebuku - Indonesia
- Georgia Ports Authority, United States
- Agrawal Coal Company - India
- Aboitiz Power Corporation - Philippines
- Merrill Lynch Commodities Europe
- CIMB Investment Bank - Malaysia
- Bhatia International Limited - India
- Directorate General of MIneral and Coal - Indonesia
- AsiaOL BioFuels Corp., Philippines
- Petrochimia International Co. Ltd.- Taiwan
- Carbofer General Trading SA - India
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Neyveli Lignite Corporation Ltd, - India
- Lanco Infratech Ltd - India
- Global Coal Blending Company Limited - Australia
- Singapore Mercantile Exchange
- Kepco SPC Power Corporation, Philippines
- Mercuria Energy - Indonesia
- Bayan Resources Tbk. - Indonesia
- Central Electricity Authority - India
- Toyota Tsusho Corporation, Japan
- Samtan Co., Ltd - South Korea
- Mintek Dendrill Indonesia
- Dalmia Cement Bharat India
- Indian Oil Corporation Limited
- Intertek Mineral Services - Indonesia
- Bukit Makmur.PT - Indonesia
- Meenaskhi Energy Private Limited - India
- Kalimantan Lumbung Energi - Indonesia
- OPG Power Generation Pvt Ltd - India
- Kideco Jaya Agung - Indonesia
- Thiess Contractors Indonesia
- SMC Global Power, Philippines
- Energy Development Corp, Philippines
- Ambuja Cements Ltd - India
- Chamber of Mines of South Africa
- GMR Energy Limited - India
- Bank of Tokyo Mitsubishi UFJ Ltd
- Sindya Power Generating Company Private Ltd
- Coal and Oil Company - UAE
- Romanian Commodities Exchange
- Ministry of Finance - Indonesia
- Latin American Coal - Colombia
- Economic Council, Georgia
- Gujarat Mineral Development Corp Ltd - India
- Formosa Plastics Group - Taiwan
- Sical Logistics Limited - India
- The State Trading Corporation of India Ltd
- Edison Trading Spa - Italy
- Mjunction Services Limited - India
- Tamil Nadu electricity Board
- Simpson Spence & Young - Indonesia
- Vizag Seaport Private Limited - India
- Star Paper Mills Limited - India
- Semirara Mining Corp, Philippines
- Coastal Gujarat Power Limited - India
- Offshore Bulk Terminal Pte Ltd, Singapore
- Global Business Power Corporation, Philippines
- Asia Pacific Energy Resources Ventures Inc, Philippines
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