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Monday, 15 December 14
WILL TANKERS BENEFIT FROM REEMERGENCE OF FLOATING STORAGE PLAYS? - NIKOS ROUSSANOGLOU, HELLENIC SHIPPING NEWS
The tanker market has been seeing high freight rates for some time now, riding on the back of low oil prices, which are boosting demand from developing nations, looking to replenish their stockpiles. However, another factor could also emerge, with the return of floating storage plays. According to the latest report from shipbroker Charles R. Weber, “following strong crude price losses during late 2008 and early 2009, the $45 emergence of a steep contango in crude futures markets supported a surge in demand for tankers to service floating storage contracts. By 2010, as the $30 wheels of the global economy improved on a return to strong growth in $15 emerging economies, the contango curve became steep enough to support $0 floating storage sufficiently to consume through much of 1H10 upwards of 10% of the global VLCC fleet. This lead to stronger earnings for the class with knock on effects for smaller tanker counterparts as overall availability levels declined”.
According to the shipbroker, “when crude prices started observing losses early during 2H14, the reemergence $60 of a contangoed futures curve reignited consideration of floating storage, but $45 little has materialized as the S/bbl storage costs consistently forward crude spreads. With the global demand/supply imbalance having extended through $30 2H14, the unwillingness by OPEC (or more specifically: a prominent contingent of OPEC’s membership) to react through supply cuts, recent downward $15 revisions by key oil forecasting agencies to demand projections implies that a wider imbalance will materialize during 2015. In its latest report, the IEA notes $0 the imbalance with a corresponding rise in implied steep building up of global crude inventories of relative earnings strength (if below present peak levels). How the crude $80 market develops thereafter will likely dictate the course that tanker earnings take through the remainder of 2015. $60 For its part, support from floating storage remains off the table due to the $40 prohibitively high cost to procure tonnage for such a purpose”.
C.R. Weber noted that “at present assessments, a 6 month floating storage contract off Singapore would equate to $20 a cost ~$5.84/bbl while the spread between Brent’s front month and July contracts stands at $3.72/bbl Further into 2015, however, continued crude price losses which could be inferred by the |EA’s projected widening of the global demand/supply $40 imbalance could lead to crude supply cuts to support prices. Though such a $30 scenario represents a threat to crude tanker demand, a simultaneous correcting of freight markets and steepening of contango curves could create the requisite $20 economics to support floating storage. This would likely place a floor on prospective freight downside while bridging the market to a subsequent $10 rebalancing of crude markets, thus limiting an impact on crude tanker earnings”, the shipbroker concluded.
Meanwhile, in the crude tanker markets this week, in the VLCC segment “rates firmed this week as charterers worked through much of the remainder of the Middle East market’s December program while owners became more bullish in a late reaction to narrower supply/demand fundamentals. Stronger demand in the Middle East market – where the December program has already yielded the most cargoes since the April program and is poised to conclude with the most since the February market – has coincided with a recent demand acceleration in the West Africa market. As both of these areas draw from Middle East positions, the region’s supply/demand positioning is at its narrowest level since 2008 with just 5 surplus positions through end? December dates. With 118 Middle East December cargoes covered to date and the program expected to conclude with 121, the 8 units which remain on position lists to cover the remaining stems appear set to observe premiums to present assessments. How aggressively charterers progress into the January program during the upcoming week will thus likely dictate the direction that rates will take for early January cargoes. Given shortened working weeks during the final two weeks of the year, charterers could reach forward on dates (as the market already is observing) during the upcoming week to cover requirements ahead of the holidays. Against the tight supply/demand profile, this would imply an extending of the present rate rally. Further forward, as the market moves past the first half of the January program and forward fixing windows normalize, the reappearance of units presently on trades to points in the east on Middle East position lists should see rates start to correct”, C.R. Weber concluded.
Source: Nikos Roussanoglou, Hellenic Shipping News
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Friday, 19 December 14
HOW WILL LOWER BUNKER PRICES AFFECT THE SUBSTANTIAL OVERCAPACITY IN DRY BULK MARKET? - BIMCO
As bunker fuel costs have come down from USD 600 per tonnes to USD 330 per tonnes in the past 6 months, much talk about increased ship speed have s ...
Friday, 19 December 14
U.S WEEKLY COAL PRODUCTION REACHED APPROXIMATELY 19.8 MMST; UP 1.0% WOW
COALspot.com – United States the world's one of the largest coal producers, produced approximately 19.8 million short tons (mmst) of coal ...
Friday, 19 December 14
HANDY: SOFTER TONE; PANAMAX: QUIET WEEK; CAPESIZE; PAINFUL WEEK
Handy
A softer tone for rates and volumes for the Supras, perhaps less apparent in the Pacific the last week before the season holidays and good ...
Thursday, 18 December 14
INDONESIA TO REVISE UP COAL OUTPUT TARGET TO 460 MILLION TONS IN 2015
COALspot.com: Indonesian government has revised up its next year coal output forecast to 460 million tons from its previous forecast of 421 million ...
Wednesday, 17 December 14
CAPES RATES SLIPPED BELOW $5,600/DAY, FELL 84% YOY
COALspot.com: In the very rare occurrence when the BCI stands below the BDI, words to describe market sentiment are probably poor, said Intermodal ...
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- Globalindo Alam Lestari - Indonesia
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- Iligan Light & Power Inc, Philippines
- Gujarat Sidhee Cement - India
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- Sakthi Sugars Limited - India
- Aboitiz Power Corporation - Philippines
- Vedanta Resources Plc - India
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- GN Power Mariveles Coal Plant, Philippines
- Therma Luzon, Inc, Philippines
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- Australian Coal Association
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- Sarangani Energy Corporation, Philippines
- Bhushan Steel Limited - India
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- European Bulk Services B.V. - Netherlands
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- Power Finance Corporation Ltd., India
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- Ministry of Finance - Indonesia
- Indonesian Coal Mining Association
- Electricity Authority, New Zealand
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- PowerSource Philippines DevCo
- Krishnapatnam Port Company Ltd. - India
- Edison Trading Spa - Italy
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- Makarim & Taira - Indonesia
- Wood Mackenzie - Singapore
- Semirara Mining Corp, Philippines
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- Dong Bac Coal Mineral Investment Coporation - Vietnam
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- Directorate General of MIneral and Coal - Indonesia
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- Parliament of New Zealand
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- Neyveli Lignite Corporation Ltd, - India
- Petron Corporation, Philippines
- Lanco Infratech Ltd - India
- Malabar Cements Ltd - India
- Siam City Cement PLC, Thailand
- Ministry of Mines - Canada
- AsiaOL BioFuels Corp., Philippines
- Bangladesh Power Developement Board
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- Miang Besar Coal Terminal - Indonesia
- Leighton Contractors Pty Ltd - Australia
- Banpu Public Company Limited - Thailand
- Maheswari Brothers Coal Limited - India
- Merrill Lynch Commodities Europe
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- Bank of Tokyo Mitsubishi UFJ Ltd
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- Straits Asia Resources Limited - Singapore
- Aditya Birla Group - India
- Independent Power Producers Association of India
- Baramulti Group, Indonesia
- Asmin Koalindo Tuhup - Indonesia
- Cigading International Bulk Terminal - Indonesia
- Singapore Mercantile Exchange
- Anglo American - United Kingdom
- MS Steel International - UAE
- Standard Chartered Bank - UAE
- Commonwealth Bank - Australia
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- India Bulls Power Limited - India
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- London Commodity Brokers - England
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- Renaissance Capital - South Africa
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- Global Business Power Corporation, Philippines
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- Formosa Plastics Group - Taiwan
- Planning Commission, India
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- New Zealand Coal & Carbon
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- The Treasury - Australian Government
- Offshore Bulk Terminal Pte Ltd, Singapore
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- Eastern Coal Council - USA
- PTC India Limited - India
- Simpson Spence & Young - Indonesia
- Maharashtra Electricity Regulatory Commission - India
- Antam Resourcindo - Indonesia
- Madhucon Powers Ltd - India
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- Indian Oil Corporation Limited
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- Larsen & Toubro Limited - India
- Eastern Energy - Thailand
- CIMB Investment Bank - Malaysia
- Global Coal Blending Company Limited - Australia
- White Energy Company Limited
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