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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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Wednesday, 25 November 15
INDIA'S POWER GENERATORS FACE LOW, FALLING UTILISATION RATE - FITCH
COAlspot.com: Fitch Ratings says in a new report that the utilisation rate of India's thermal power generation capacity continued to decline in ...
Wednesday, 25 November 15
BIG CHINESE COPPER PROCESSORS DEFEND MARGINS THROUGH R&D, SAYS FITCH
Large Chinese copper processors are focusing on higher value-added products and investing in R&D to enhance their technical know-how to maintai ...
Wednesday, 25 November 15
BIMCO LAUNCHES ANTI-CORRUPTION CLAUSE FOR SHIPPING CONTRACTS WORLDWIDE
COALspot.com: BIMCO, is the world’s largest international shipping association, with 2,200 members in around 130 countries, has now launched ...
Wednesday, 25 November 15
TANKER MARKET INSIGHT - GEORGE VASTARDIS
We have already noticed obvious signs of activity mainly West of Suez, which are currently driving the clean MR market to higher levels. Over the p ...
Tuesday, 24 November 15
COAL SUPPLY PRESSURE PUTS INDONESIAN HBA IN FREE FALL
The coal industry is slowly recognizing that, the current coal price level is not a decrease in price, but a change in pricing to corresp ...
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- McConnell Dowell - Australia
- Mintek Dendrill Indonesia
- CIMB Investment Bank - Malaysia
- GAC Shipping (India) Pvt Ltd
- Toyota Tsusho Corporation, Japan
- Semirara Mining and Power Corporation, Philippines
- Miang Besar Coal Terminal - Indonesia
- Asmin Koalindo Tuhup - Indonesia
- Petrochimia International Co. Ltd.- Taiwan
- Bulk Trading Sa - Switzerland
- VISA Power Limited - India
- Australian Commodity Traders Exchange
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- Minerals Council of Australia
- Neyveli Lignite Corporation Ltd, - India
- Eastern Coal Council - USA
- Kepco SPC Power Corporation, Philippines
- Chettinad Cement Corporation Ltd - India
- South Luzon Thermal Energy Corporation
- Jorong Barutama Greston.PT - Indonesia
- Australian Coal Association
- Kalimantan Lumbung Energi - Indonesia
- San Jose City I Power Corp, Philippines
- Bhatia International Limited - India
- Gujarat Sidhee Cement - India
- OPG Power Generation Pvt Ltd - India
- Leighton Contractors Pty Ltd - Australia
- Simpson Spence & Young - Indonesia
- Siam City Cement - Thailand
- Vizag Seaport Private Limited - India
- Global Green Power PLC Corporation, Philippines
- Wilmar Investment Holdings
- Ministry of Finance - Indonesia
- Vedanta Resources Plc - India
- Power Finance Corporation Ltd., India
- Bayan Resources Tbk. - Indonesia
- Samtan Co., Ltd - South Korea
- SMG Consultants - Indonesia
- Directorate General of MIneral and Coal - Indonesia
- Georgia Ports Authority, United States
- Alfred C Toepfer International GmbH - Germany
- Rashtriya Ispat Nigam Limited - India
- Bukit Asam (Persero) Tbk - Indonesia
- Bhoruka Overseas - Indonesia
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- PowerSource Philippines DevCo
- GN Power Mariveles Coal Plant, Philippines
- Aboitiz Power Corporation - Philippines
- Electricity Generating Authority of Thailand
- Jindal Steel & Power Ltd - India
- White Energy Company Limited
- Parry Sugars Refinery, India
- Meenaskhi Energy Private Limited - India
- Larsen & Toubro Limited - India
- Ceylon Electricity Board - Sri Lanka
- Vijayanagar Sugar Pvt Ltd - India
- Kartika Selabumi Mining - Indonesia
- Medco Energi Mining Internasional
- Planning Commission, India
- PNOC Exploration Corporation - Philippines
- Sree Jayajothi Cements Limited - India
- CNBM International Corporation - China
- Africa Commodities Group - South Africa
- Manunggal Multi Energi - Indonesia
- Parliament of New Zealand
- Posco Energy - South Korea
- Kobexindo Tractors - Indoneisa
- Kumho Petrochemical, South Korea
- European Bulk Services B.V. - Netherlands
- SN Aboitiz Power Inc, Philippines
- Baramulti Group, Indonesia
- Wood Mackenzie - Singapore
- Thiess Contractors Indonesia
- Anglo American - United Kingdom
- Gujarat Mineral Development Corp Ltd - India
- Eastern Energy - Thailand
- Formosa Plastics Group - Taiwan
- The University of Queensland
- Ind-Barath Power Infra Limited - India
- Economic Council, Georgia
- Maharashtra Electricity Regulatory Commission - India
- Mercuria Energy - Indonesia
- Metalloyd Limited - United Kingdom
- Karaikal Port Pvt Ltd - India
- Indo Tambangraya Megah - Indonesia
- Borneo Indobara - Indonesia
- Price Waterhouse Coopers - Russia
- Iligan Light & Power Inc, Philippines
- Merrill Lynch Commodities Europe
- Petron Corporation, Philippines
- Ministry of Mines - Canada
- Savvy Resources Ltd - HongKong
- Makarim & Taira - Indonesia
- TeaM Sual Corporation - Philippines
- Sindya Power Generating Company Private Ltd
- International Coal Ventures Pvt Ltd - India
- Thai Mozambique Logistica
- Carbofer General Trading SA - India
- Bharathi Cement Corporation - India
- Antam Resourcindo - Indonesia
- Global Business Power Corporation, Philippines
- Orica Mining Services - Indonesia
- Sojitz Corporation - Japan
- Trasteel International SA, Italy
- Global Coal Blending Company Limited - Australia
- The Treasury - Australian Government
- Madhucon Powers Ltd - India
- Barasentosa Lestari - Indonesia
- Indian Oil Corporation Limited
- Sical Logistics Limited - India
- Altura Mining Limited, Indonesia
- Timah Investasi Mineral - Indoneisa
- Electricity Authority, New Zealand
- Indian Energy Exchange, India
- Aditya Birla Group - India
- Malabar Cements Ltd - India
- PTC India Limited - India
- Bukit Makmur.PT - Indonesia
- Salva Resources Pvt Ltd - India
- Tata Chemicals Ltd - India
- Directorate Of Revenue Intelligence - India
- India Bulls Power Limited - India
- SMC Global Power, Philippines
- Essar Steel Hazira Ltd - India
- Bangladesh Power Developement Board
- LBH Netherlands Bv - Netherlands
- Edison Trading Spa - Italy
- TNB Fuel Sdn Bhd - Malaysia
- Xindia Steels Limited - India
- Ambuja Cements Ltd - India
- Straits Asia Resources Limited - Singapore
- Billiton Holdings Pty Ltd - Australia
- Independent Power Producers Association of India
- Holcim Trading Pte Ltd - Singapore
- Pendopo Energi Batubara - Indonesia
- Kideco Jaya Agung - Indonesia
- MS Steel International - UAE
- Indonesian Coal Mining Association
- Ministry of Transport, Egypt
- Offshore Bulk Terminal Pte Ltd, Singapore
- New Zealand Coal & Carbon
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Latin American Coal - Colombia
- Binh Thuan Hamico - Vietnam
- Coalindo Energy - Indonesia
- Jaiprakash Power Ventures ltd
- Riau Bara Harum - Indonesia
- Goldman Sachs - Singapore
- Interocean Group of Companies - India
- Karbindo Abesyapradhi - Indoneisa
- Energy Development Corp, Philippines
- Intertek Mineral Services - Indonesia
- GVK Power & Infra Limited - India
- Marubeni Corporation - India
- Chamber of Mines of South Africa
- Videocon Industries ltd - India
- Uttam Galva Steels Limited - India
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Sakthi Sugars Limited - India
- Semirara Mining Corp, Philippines
- Coastal Gujarat Power Limited - India
- The State Trading Corporation of India Ltd
- Indika Energy - Indonesia
- Dalmia Cement Bharat India
- IHS Mccloskey Coal Group - USA
- Kohat Cement Company Ltd. - Pakistan
- Cement Manufacturers Association - India
- Sinarmas Energy and Mining - Indonesia
- Bhushan Steel Limited - India
- Tamil Nadu electricity Board
- Central Java Power - Indonesia
- Banpu Public Company Limited - Thailand
- Kapuas Tunggal Persada - Indonesia
- Pipit Mutiara Jaya. PT, Indonesia
- Globalindo Alam Lestari - Indonesia
- Bahari Cakrawala Sebuku - Indonesia
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Bank of Tokyo Mitsubishi UFJ Ltd
- Meralco Power Generation, Philippines
- Romanian Commodities Exchange
- Kaltim Prima Coal - Indonesia
- Orica Australia Pty. Ltd.
- AsiaOL BioFuels Corp., Philippines
- Renaissance Capital - South Africa
- Attock Cement Pakistan Limited
- Siam City Cement PLC, Thailand
- Star Paper Mills Limited - India
- Central Electricity Authority - India
- Energy Link Ltd, New Zealand
- Mercator Lines Limited - India
- Standard Chartered Bank - UAE
- Port Waratah Coal Services - Australia
- Therma Luzon, Inc, Philippines
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Mjunction Services Limited - India
- Grasim Industreis Ltd - India
- Krishnapatnam Port Company Ltd. - India
- Indogreen Group - Indonesia
- IEA Clean Coal Centre - UK
- Maheswari Brothers Coal Limited - India
- Agrawal Coal Company - India
- Commonwealth Bank - Australia
- Coal and Oil Company - UAE
- Singapore Mercantile Exchange
- Lanco Infratech Ltd - India
- Bukit Baiduri Energy - Indonesia
- Rio Tinto Coal - Australia
- Heidelberg Cement - Germany
- London Commodity Brokers - England
- ICICI Bank Limited - India
- Oldendorff Carriers - Singapore
- Sarangani Energy Corporation, Philippines
- GMR Energy Limited - India
- ASAPP Information Group - India
- PetroVietnam Power Coal Import and Supply Company
- Deloitte Consulting - India
- Gujarat Electricity Regulatory Commission - India
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