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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.
Information contained within the website of COALspot.com is intended for informational purposes only and is not intended as professional counsel and should not be used as such.
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Friday, 08 January 16
DRY BULK MARKET'S CRISIS DEEPENS AS RATES ARE DROPPING TO NEW RECORD LOWS BY THE DAY - NIKOS ROUSSANOGLOU, HELLENIC SHIPPING NEWS
Just when you would think that the dry bulk market is reaching its bottom, even as it has long surpassed all-time lows, each day that passes by at ...
Thursday, 07 January 16
FOB NEWCASTLE COAL SWAPS DELIVERY Q1'16 REMAIN FLAT W-O-W; UP M-O-M
COALspot.com: API 5 FOB Newcastle Coal swap for Q1’ 2016 delivery rose another $1.23 per ton (3.35%) this past week compared to the sam ...
Thursday, 07 January 16
SHIPPING WILL REMAIN VOLATILE AND INDISPENSABLE IN 2016 - MOORE STEPHENS
The ultimate definition of an optimist has been characterised as an accordion player with an answerphone. Such extreme optimism might be difficult ...
Wednesday, 06 January 16
NEW COAL PRICE PASS-THROUGH REGULATION BENEFITS CHINA IPPS - FITCH RATINGS
Fitch Ratings says the new Coal Price Pass-through Mechanism announced by the National Development and Reform Commission (NDRC) on 31 December ...
Tuesday, 05 January 16
BIG COAL MINERS PLAN HIGHER PRODUCTION THIS YEAR - THE JAKARTA POST
The country’s major coal miners plan to further boost production in 2016 although analysts estimate that an oversupply in the world’s c ...
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- Standard Chartered Bank - UAE
- Bangladesh Power Developement Board
- Karbindo Abesyapradhi - Indoneisa
- Posco Energy - South Korea
- Indonesian Coal Mining Association
- Asmin Koalindo Tuhup - Indonesia
- Port Waratah Coal Services - Australia
- Anglo American - United Kingdom
- Energy Development Corp, Philippines
- Salva Resources Pvt Ltd - India
- Power Finance Corporation Ltd., India
- Kepco SPC Power Corporation, Philippines
- Timah Investasi Mineral - Indoneisa
- The University of Queensland
- Indo Tambangraya Megah - Indonesia
- CIMB Investment Bank - Malaysia
- Bahari Cakrawala Sebuku - Indonesia
- Deloitte Consulting - India
- Petrochimia International Co. Ltd.- Taiwan
- Gujarat Mineral Development Corp Ltd - India
- Riau Bara Harum - Indonesia
- Alfred C Toepfer International GmbH - Germany
- Bayan Resources Tbk. - Indonesia
- Medco Energi Mining Internasional
- European Bulk Services B.V. - Netherlands
- Mintek Dendrill Indonesia
- Malabar Cements Ltd - India
- The State Trading Corporation of India Ltd
- Orica Mining Services - Indonesia
- Essar Steel Hazira Ltd - India
- Bukit Asam (Persero) Tbk - Indonesia
- Orica Australia Pty. Ltd.
- Xindia Steels Limited - India
- Marubeni Corporation - India
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Mercator Lines Limited - India
- Economic Council, Georgia
- Indogreen Group - Indonesia
- TNB Fuel Sdn Bhd - Malaysia
- Petron Corporation, Philippines
- Latin American Coal - Colombia
- PNOC Exploration Corporation - Philippines
- GVK Power & Infra Limited - India
- Indian Energy Exchange, India
- Sical Logistics Limited - India
- Billiton Holdings Pty Ltd - Australia
- Bukit Baiduri Energy - Indonesia
- Meenaskhi Energy Private Limited - India
- Binh Thuan Hamico - Vietnam
- Kartika Selabumi Mining - Indonesia
- Siam City Cement PLC, Thailand
- Uttam Galva Steels Limited - India
- London Commodity Brokers - England
- PetroVietnam Power Coal Import and Supply Company
- Savvy Resources Ltd - HongKong
- India Bulls Power Limited - India
- Sarangani Energy Corporation, Philippines
- Bukit Makmur.PT - Indonesia
- SMG Consultants - Indonesia
- Kapuas Tunggal Persada - Indonesia
- Directorate Of Revenue Intelligence - India
- Rio Tinto Coal - Australia
- Thai Mozambique Logistica
- Interocean Group of Companies - India
- Miang Besar Coal Terminal - Indonesia
- Chettinad Cement Corporation Ltd - India
- MS Steel International - UAE
- GN Power Mariveles Coal Plant, Philippines
- Dalmia Cement Bharat India
- Coastal Gujarat Power Limited - India
- Sindya Power Generating Company Private Ltd
- Kideco Jaya Agung - Indonesia
- Global Green Power PLC Corporation, Philippines
- Ministry of Finance - Indonesia
- Cement Manufacturers Association - India
- Tamil Nadu electricity Board
- Aditya Birla Group - India
- Siam City Cement - Thailand
- Planning Commission, India
- Sojitz Corporation - Japan
- Kohat Cement Company Ltd. - Pakistan
- Edison Trading Spa - Italy
- Barasentosa Lestari - Indonesia
- Bhatia International Limited - India
- Renaissance Capital - South Africa
- Bhoruka Overseas - Indonesia
- Africa Commodities Group - South Africa
- Electricity Authority, New Zealand
- Sakthi Sugars Limited - India
- Altura Mining Limited, Indonesia
- Formosa Plastics Group - Taiwan
- SMC Global Power, Philippines
- Wilmar Investment Holdings
- Iligan Light & Power Inc, Philippines
- CNBM International Corporation - China
- The Treasury - Australian Government
- SN Aboitiz Power Inc, Philippines
- Global Coal Blending Company Limited - Australia
- Pipit Mutiara Jaya. PT, Indonesia
- Chamber of Mines of South Africa
- Ministry of Transport, Egypt
- PowerSource Philippines DevCo
- Larsen & Toubro Limited - India
- Mercuria Energy - Indonesia
- Offshore Bulk Terminal Pte Ltd, Singapore
- Bharathi Cement Corporation - India
- Oldendorff Carriers - Singapore
- Energy Link Ltd, New Zealand
- Goldman Sachs - Singapore
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Directorate General of MIneral and Coal - Indonesia
- Central Java Power - Indonesia
- Parry Sugars Refinery, India
- Maharashtra Electricity Regulatory Commission - India
- Vedanta Resources Plc - India
- IHS Mccloskey Coal Group - USA
- ASAPP Information Group - India
- Tata Chemicals Ltd - India
- Mjunction Services Limited - India
- Eastern Coal Council - USA
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Makarim & Taira - Indonesia
- Sinarmas Energy and Mining - Indonesia
- Kalimantan Lumbung Energi - Indonesia
- Baramulti Group, Indonesia
- Ind-Barath Power Infra Limited - India
- Carbofer General Trading SA - India
- Manunggal Multi Energi - Indonesia
- Semirara Mining and Power Corporation, Philippines
- Cigading International Bulk Terminal - Indonesia
- Price Waterhouse Coopers - Russia
- Romanian Commodities Exchange
- Coal and Oil Company - UAE
- South Luzon Thermal Energy Corporation
- Coalindo Energy - Indonesia
- Global Business Power Corporation, Philippines
- Bulk Trading Sa - Switzerland
- Aboitiz Power Corporation - Philippines
- Ambuja Cements Ltd - India
- Borneo Indobara - Indonesia
- AsiaOL BioFuels Corp., Philippines
- Commonwealth Bank - Australia
- Jindal Steel & Power Ltd - India
- Ceylon Electricity Board - Sri Lanka
- Ministry of Mines - Canada
- Gujarat Sidhee Cement - India
- Jaiprakash Power Ventures ltd
- Parliament of New Zealand
- Kumho Petrochemical, South Korea
- Sree Jayajothi Cements Limited - India
- White Energy Company Limited
- Central Electricity Authority - India
- Thiess Contractors Indonesia
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- International Coal Ventures Pvt Ltd - India
- Heidelberg Cement - Germany
- Krishnapatnam Port Company Ltd. - India
- IEA Clean Coal Centre - UK
- Toyota Tsusho Corporation, Japan
- Rashtriya Ispat Nigam Limited - India
- Trasteel International SA, Italy
- Leighton Contractors Pty Ltd - Australia
- Minerals Council of Australia
- Semirara Mining Corp, Philippines
- Intertek Mineral Services - Indonesia
- Straits Asia Resources Limited - Singapore
- Kaltim Prima Coal - Indonesia
- Bhushan Steel Limited - India
- Australian Commodity Traders Exchange
- Madhucon Powers Ltd - India
- Metalloyd Limited - United Kingdom
- GMR Energy Limited - India
- Jorong Barutama Greston.PT - Indonesia
- Antam Resourcindo - Indonesia
- Meralco Power Generation, Philippines
- Vizag Seaport Private Limited - India
- Georgia Ports Authority, United States
- ICICI Bank Limited - India
- LBH Netherlands Bv - Netherlands
- Holcim Trading Pte Ltd - Singapore
- Singapore Mercantile Exchange
- Indian Oil Corporation Limited
- Lanco Infratech Ltd - India
- Samtan Co., Ltd - South Korea
- Maheswari Brothers Coal Limited - India
- PTC India Limited - India
- Videocon Industries ltd - India
- Neyveli Lignite Corporation Ltd, - India
- VISA Power Limited - India
- Banpu Public Company Limited - Thailand
- New Zealand Coal & Carbon
- McConnell Dowell - Australia
- San Jose City I Power Corp, Philippines
- Grasim Industreis Ltd - India
- Wood Mackenzie - Singapore
- Indika Energy - Indonesia
- OPG Power Generation Pvt Ltd - India
- Therma Luzon, Inc, Philippines
- Australian Coal Association
- Merrill Lynch Commodities Europe
- Pendopo Energi Batubara - Indonesia
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Star Paper Mills Limited - India
- Electricity Generating Authority of Thailand
- Karaikal Port Pvt Ltd - India
- Globalindo Alam Lestari - Indonesia
- Agrawal Coal Company - India
- Simpson Spence & Young - Indonesia
- Attock Cement Pakistan Limited
- TeaM Sual Corporation - Philippines
- Vijayanagar Sugar Pvt Ltd - India
- Independent Power Producers Association of India
- GAC Shipping (India) Pvt Ltd
- Eastern Energy - Thailand
- Bank of Tokyo Mitsubishi UFJ Ltd
- Gujarat Electricity Regulatory Commission - India
- Kobexindo Tractors - Indoneisa
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