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Wednesday, 26 August 15
MARKET INSIGHT - STRATOS TINIAKOS
 It’s always interesting to comment on the market when big economies around the world are facing troubling times. Following the collapse of the Chinese stock market, the devaluation of the country’s currency a few days ago gave even to those who were optimistic in regards to global growth, more reasons to believe that the state of the economy of the world’s 2nd biggest oil consumer is not as strong as originally thought and possibly reflective of other developed economies as well. The sharp fall of oil prices is also partly indicative of these fundamentals.
Almost ten years ago oil was trading at USD46pbl when demand from China started pushing prices up, to a point that these reached almost USD160 pbl just before world economies went into recession. The oil supply glut is now pushing prices further down; with the less optimistic analysts believing that we could even see the 25 mark sooner rather than later.
The fall in prices that we are now witnessing was first predicted back in the middle of 2013, as easing of the Iranian sanctions was being discussed, Libya was about to start production again in a post-Gaddafi era and increased US production through fracking was taking place.
Many believe that the current collapse in prices is engineered by Saudi Arabia in an effort to knock out the US production as it is estimated that the cost of production of a fracking rig, including the financing cost, is about 70usd per barrel. So with oil prices in the region of 25-30usd it is very difficult for refineries in the US to compete and this is also evident in the fact that the number of fracking rigs dropped from 1608 in October 2014 to 747 in April 2015. So where do we stand now?
The first half of the year was brilliant for the tanker owners and nobody expected rates to remain as firm during the summer season as well, when seasonality always traditionally takes its toll on rates. The low oil prices environment supported dry cargo owners to achieve sustainable margins and tanker owners to gain more out of a very good market. The recent negative reversal though has been puzzling everyone. Despite the fact that a number of tanker owners believe that market will reverse course and start firming once again, it seems unlikely that year highs could be reached any time soon amidst the shock waves China keeps sending in the markets around the world.
Saying that, in the next couple of months many refineries are going into their scheduled semi-annual maintenance and about 70 million tons of crude will have to be stored, either on ships or in shore tanks. As demand cannot match supply and global growth is very likely to further decelerate, the tanker market is expected to remain somewhere around current levels, with lower oil prices supporting owners through smaller operating costs, helping them to achieve sustainable margins. The need for storage is at the same time expected to increase demand for dwt for 1-2 months period charters.
OPEC is the only entity that can save prices from further collapsing but there are currently no signs that the organization is heading towards this direction anytime soon, despite the fact that the consensus to start supporting prices is growing within its members. The next meeting scheduled in December is probably too far in the future to prevent a further significant drop even if it called for this much needed production cut. In the meantime, if world economies are set for further headwinds in the future, even cheaper oil doesn’t sound too bad.
By Stratos Tiniakos
Tanker Chartering Broker
Compiled by:
Intermodal Research & Valuations
Analysts:
Ms. Eva Tzima
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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Thursday, 03 March 16
BDI FURTHER STRENGTHENING; THE INCREASE IN RATES WAS NOT SUBSTANTIAL
COALspot.com: The BDI closed off on a positive note for a second week in a row, further strengthening the belief that the market might be bottoming ...
Thursday, 03 March 16
RIO TINTO COMPLETES SALE OF INTEREST IN BENGALLA JOINT VENTURE FOR US$616.7 MILLION
COALspot.com: Rio Tinto has completed the sale of its 40 per cent interest in the Bengalla coal Joint Venture in Australia to New Hope Corporation ...
Wednesday, 02 March 16
RE-EVALUATION OF MINING LICENSES CLEAN AND CLEAR STATUS IN INDONESIA
COALspot.com: In connection with the transfer of mining authority from Regents/Mayors to Governors1 and from Regents/Mayors and Governors to t ...
Wednesday, 02 March 16
OIL MY GOD.....!!!!
OIL my GOD….!!!!
The oil price “crash” that started in 2014 was caused by a glut of practically unwanted oil. Producers had be ...
Tuesday, 01 March 16
CS 42 (4200 GAR) COAL INDEX CLOSED AT US$ 27.11 A TON ON 26 FEBRUARY
COALspot.com: Average 5000 GAR coal index of Indonesian origin decline 0.31 percent week over week to averaging $38.77 per ton on this past Friday, ...
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- New Zealand Coal & Carbon
- Simpson Spence & Young - Indonesia
- Sarangani Energy Corporation, Philippines
- International Coal Ventures Pvt Ltd - India
- TeaM Sual Corporation - Philippines
- Carbofer General Trading SA - India
- VISA Power Limited - India
- Ministry of Mines - Canada
- Australian Commodity Traders Exchange
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Vijayanagar Sugar Pvt Ltd - India
- Australian Coal Association
- Mjunction Services Limited - India
- Globalindo Alam Lestari - Indonesia
- Jaiprakash Power Ventures ltd
- Formosa Plastics Group - Taiwan
- Kartika Selabumi Mining - Indonesia
- Metalloyd Limited - United Kingdom
- PowerSource Philippines DevCo
- South Luzon Thermal Energy Corporation
- Economic Council, Georgia
- Agrawal Coal Company - India
- Wilmar Investment Holdings
- Toyota Tsusho Corporation, Japan
- Siam City Cement - Thailand
- Makarim & Taira - Indonesia
- Lanco Infratech Ltd - India
- Sindya Power Generating Company Private Ltd
- Maharashtra Electricity Regulatory Commission - India
- Wood Mackenzie - Singapore
- CNBM International Corporation - China
- Dalmia Cement Bharat India
- The State Trading Corporation of India Ltd
- Ceylon Electricity Board - Sri Lanka
- Jindal Steel & Power Ltd - India
- Attock Cement Pakistan Limited
- Orica Australia Pty. Ltd.
- Bhushan Steel Limited - India
- Planning Commission, India
- Meenaskhi Energy Private Limited - India
- Riau Bara Harum - Indonesia
- Singapore Mercantile Exchange
- Indian Energy Exchange, India
- Aboitiz Power Corporation - Philippines
- Romanian Commodities Exchange
- GMR Energy Limited - India
- Eastern Coal Council - USA
- Coal and Oil Company - UAE
- Essar Steel Hazira Ltd - India
- Chamber of Mines of South Africa
- Commonwealth Bank - Australia
- Kepco SPC Power Corporation, Philippines
- Grasim Industreis Ltd - India
- GN Power Mariveles Coal Plant, Philippines
- SN Aboitiz Power Inc, Philippines
- The Treasury - Australian Government
- Bhatia International Limited - India
- Bukit Baiduri Energy - Indonesia
- Anglo American - United Kingdom
- IHS Mccloskey Coal Group - USA
- Holcim Trading Pte Ltd - Singapore
- Global Green Power PLC Corporation, Philippines
- Meralco Power Generation, Philippines
- Thai Mozambique Logistica
- GVK Power & Infra Limited - India
- Banpu Public Company Limited - Thailand
- Merrill Lynch Commodities Europe
- PTC India Limited - India
- Cigading International Bulk Terminal - Indonesia
- Billiton Holdings Pty Ltd - Australia
- OPG Power Generation Pvt Ltd - India
- Deloitte Consulting - India
- Directorate Of Revenue Intelligence - India
- Pipit Mutiara Jaya. PT, Indonesia
- Straits Asia Resources Limited - Singapore
- AsiaOL BioFuels Corp., Philippines
- Kaltim Prima Coal - Indonesia
- Power Finance Corporation Ltd., India
- Siam City Cement PLC, Thailand
- Central Java Power - Indonesia
- Karaikal Port Pvt Ltd - India
- Kalimantan Lumbung Energi - Indonesia
- Ministry of Finance - Indonesia
- Africa Commodities Group - South Africa
- Port Waratah Coal Services - Australia
- Indian Oil Corporation Limited
- ICICI Bank Limited - India
- Energy Development Corp, Philippines
- Alfred C Toepfer International GmbH - Germany
- Petron Corporation, Philippines
- Semirara Mining Corp, Philippines
- Star Paper Mills Limited - India
- Altura Mining Limited, Indonesia
- PNOC Exploration Corporation - Philippines
- European Bulk Services B.V. - Netherlands
- Therma Luzon, Inc, Philippines
- Eastern Energy - Thailand
- Pendopo Energi Batubara - Indonesia
- Goldman Sachs - Singapore
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- London Commodity Brokers - England
- McConnell Dowell - Australia
- Georgia Ports Authority, United States
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Iligan Light & Power Inc, Philippines
- IEA Clean Coal Centre - UK
- Ambuja Cements Ltd - India
- Baramulti Group, Indonesia
- SMC Global Power, Philippines
- Barasentosa Lestari - Indonesia
- TNB Fuel Sdn Bhd - Malaysia
- White Energy Company Limited
- The University of Queensland
- Bharathi Cement Corporation - India
- Madhucon Powers Ltd - India
- Oldendorff Carriers - Singapore
- Binh Thuan Hamico - Vietnam
- Kohat Cement Company Ltd. - Pakistan
- Videocon Industries ltd - India
- Indika Energy - Indonesia
- Ind-Barath Power Infra Limited - India
- Vedanta Resources Plc - India
- Kumho Petrochemical, South Korea
- Trasteel International SA, Italy
- Antam Resourcindo - Indonesia
- Electricity Authority, New Zealand
- Indogreen Group - Indonesia
- Electricity Generating Authority of Thailand
- Bayan Resources Tbk. - Indonesia
- Global Coal Blending Company Limited - Australia
- Mercuria Energy - Indonesia
- Edison Trading Spa - Italy
- Posco Energy - South Korea
- Gujarat Sidhee Cement - India
- Vizag Seaport Private Limited - India
- Salva Resources Pvt Ltd - India
- Global Business Power Corporation, Philippines
- Aditya Birla Group - India
- LBH Netherlands Bv - Netherlands
- Medco Energi Mining Internasional
- PetroVietnam Power Coal Import and Supply Company
- CIMB Investment Bank - Malaysia
- Borneo Indobara - Indonesia
- Kideco Jaya Agung - Indonesia
- Leighton Contractors Pty Ltd - Australia
- Ministry of Transport, Egypt
- Chettinad Cement Corporation Ltd - India
- Maheswari Brothers Coal Limited - India
- Directorate General of MIneral and Coal - Indonesia
- Energy Link Ltd, New Zealand
- Sical Logistics Limited - India
- Bahari Cakrawala Sebuku - Indonesia
- Kapuas Tunggal Persada - Indonesia
- Tamil Nadu electricity Board
- Indonesian Coal Mining Association
- Minerals Council of Australia
- Price Waterhouse Coopers - Russia
- Heidelberg Cement - Germany
- Sree Jayajothi Cements Limited - India
- GAC Shipping (India) Pvt Ltd
- Mintek Dendrill Indonesia
- Orica Mining Services - Indonesia
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Intertek Mineral Services - Indonesia
- Sinarmas Energy and Mining - Indonesia
- Uttam Galva Steels Limited - India
- Krishnapatnam Port Company Ltd. - India
- Coastal Gujarat Power Limited - India
- Sojitz Corporation - Japan
- Bulk Trading Sa - Switzerland
- Renaissance Capital - South Africa
- Jorong Barutama Greston.PT - Indonesia
- Interocean Group of Companies - India
- Malabar Cements Ltd - India
- Latin American Coal - Colombia
- San Jose City I Power Corp, Philippines
- Bhoruka Overseas - Indonesia
- Offshore Bulk Terminal Pte Ltd, Singapore
- Rio Tinto Coal - Australia
- Larsen & Toubro Limited - India
- Timah Investasi Mineral - Indoneisa
- Tata Chemicals Ltd - India
- MS Steel International - UAE
- Xindia Steels Limited - India
- Miang Besar Coal Terminal - Indonesia
- Sakthi Sugars Limited - India
- Karbindo Abesyapradhi - Indoneisa
- Semirara Mining and Power Corporation, Philippines
- Samtan Co., Ltd - South Korea
- Independent Power Producers Association of India
- Parliament of New Zealand
- Bukit Makmur.PT - Indonesia
- India Bulls Power Limited - India
- Manunggal Multi Energi - Indonesia
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Gujarat Mineral Development Corp Ltd - India
- Thiess Contractors Indonesia
- Neyveli Lignite Corporation Ltd, - India
- Bukit Asam (Persero) Tbk - Indonesia
- Coalindo Energy - Indonesia
- Gujarat Electricity Regulatory Commission - India
- Mercator Lines Limited - India
- Central Electricity Authority - India
- Cement Manufacturers Association - India
- Bangladesh Power Developement Board
- Parry Sugars Refinery, India
- Standard Chartered Bank - UAE
- Savvy Resources Ltd - HongKong
- SMG Consultants - Indonesia
- Rashtriya Ispat Nigam Limited - India
- Marubeni Corporation - India
- Petrochimia International Co. Ltd.- Taiwan
- Kobexindo Tractors - Indoneisa
- ASAPP Information Group - India
- Asmin Koalindo Tuhup - Indonesia
- Bank of Tokyo Mitsubishi UFJ Ltd
- Indo Tambangraya Megah - Indonesia
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