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Sunday, 11 October 15
TANKER SHIPPING: MORE OPTIMISM IN SIGHT FOR TANKERS IN THE WINTER SEASON - BIMCO
 Demand:
2015 has been the year of the tanker. The fundamental improvements with slow supply-side growth for some years coupled with low oil prices from mid-2014 created strength on both sides. Freight rates started to take off in October 2014 for all types and sizes. The combination of an early start to the fourth-quarter seasonal strength heading into winter and the fact that the oil prices continued to slide became a catalyst.
Throughout 2015, the global refinery throughput has been on a rise. The normal seasonal lower throughput in the first half of the year with widespread maintenance did not occur. Owing to rising and already elevated refinery margins from East to West, refineries simply wanted all the crude oil they could get. This development still provides strong demand and solid freight rates for the tanker industry. In India, we saw a record of 4.74 million barrels per day (mb/d) of crude throughput in June, marking a truly global trend, whereas Middle Eastern refineries also hit a record throughput because of increased runs in Saudi Arabia.
October is traditionally another month of lower throughput as refineries get ready for the winter season when crude runs normally peak. Moreover, the American “Labor Day” on 7 September marks the end of the US driving season which started on Memorial Day, 25 May. This means that the recent 10mb/d production of gasoline will come down.
Some of that weakness may already have caused freight rates to come down sharply, in combination with the global financial uncertainties originating from China. Very large crude Carriers (VLCCs), Suezmax and Aframax have seen freight rates cut in two since mid-June, while Handysize has been the one to drop the most among oil product tankers.
In a rush of excitement, it’s easily forgotten that such high refinery crude runs can only go on for so long, if end consumption supports it. End consumption has supported it some of the way but not all the way. Swollen stocks of crude oil and oil products are now seen everywhere. Preliminary OECD total industry stock change in second-quarter was 1.1mb/d. All stocks but gasoline increased, US crude oil stocks too. In comparison global oil demand dropped by 0.1mb/d over the same period of time and is expected to see an increase of 1.6mb/d to be consumed for the full year over 2014.
Supply:
Contrary to what happens too often, the strong freight markets for oil product tankers have not resulted in a knee-jerk run to the shipyard to order a massive amount of new ships. This stands in opposition to the crude oil tanker orders seen in 2015, as if the lid has come off finally after several years of resisting the temptation.
By end-August 2015, 56 product tankers with a total capacity of 4.8 million DWT, predominantly LR2 (20) and LR1 (21), have been ordered and will be delivered in 2016-17. They are aiming to get a share of the market for longer-haul trades out of Middle East refineries, predominantly into the Western markets. This ordering trend has been on for two years now.
Among the crude oil tanker segments, we have already seen more orders for both Aframax and VLCCs than we did in the whole of 2014. Aframax in particular has been popular with investors this year; after six years with one order a month on average, 2015 has seen 29 new contracts in the first eight months. For the VLCCs, the orders with delivery in particular 2017 (21) and in 2018 (14) have been favoured by investors. In 2015, 50 new VLCC contracts in total have been signed.
One of the launchers which has lifted the freight rates into orbit is two years of very slow fleet growth. Today the fleet holds 648 VLCCs, whereas 628 VLCCs were active by mid-2013. That’s a growth of just 3% in 26 months. Looking forward into the future inflow of crude oil tankers, we can see the delivery pace is picking up and the demolition potential is vanishing with just 14 VLCCs being more than 20 years old and another 16 getting inside the window of the fourth special survey in 2016.
On order for a scheduled delivery during the next 16 months are 71 VLCCs. This means a double-paced inflow as it has taken 34 months for the latest 71 VLCCs to be put into active service.
The change in supply-side conditions will slowly tighten the freight market, and as we look into 2016, the tide could turn fundamentally as a fleet growth of 4.4% is likely to outstrip demand growth. As the coming two years are now “full” in terms of remaining in control of supply-side growth, any additional crude oil tanker orders should be placed for 2018 delivery.
BIMCO forecasts the present and next year supply growth for oil product tankers to be at 5.4% and 5.7% respectively, meaning two “full” years too for that segment.
Outlook:
Looking forward, the winter markets are expected to soften, as the eventual lower refinery crude oil throughput when no more stocks can be filled and margins begin to crumble as demand slips. Until then BIMCO expects earnings for both crude oil and oil product tankers to remain strong. Our expectations are primarily supported by low fleet growth for crude oil tankers and long-haul trades for oil product tankers.
High volatility in freight rates can be expected in the coming half year half a year, when it may also be prudent to look at the time charter market, where one- and three-year time charter rates are both at their highest level since 2009. At USD 48,000 per day and USD 43,500 per day, time charters will make positive returns after all costs inclusive of capital cost and depreciations are deducted.
In the longer run, an eventual repeal of the US crude oil export ban will likely have some impact on the tanker trading lanes. The US congress is set to vote on the issues during this autumn. For the supporters the case is clear: US refineries are saturated with light sweet crude which is produced abundantly. For those in favour of keeping the crude oil export ban still in place there is “national interest”, which currently seems to hold the upper hand. Currently, the only crude oil exports today go to Canada (0.5mb/d).
Moreover, the eventual lifting of international sanctions on Iran is likely to see a steady increase in crude oil, both sweet and sour, into the market over the coming one to three years, depending on much-needed investments to boost production and time to regain market shares. BIMCO expects the re-entry of Iranian crude oil into the market will change trade patterns as other suppliers will be squeezed on their market share. The key will be West African produced sweet crude now going to Europe and East Asia. The latter is the vital one and a stronghold behind the current upturn. The overall impact on the tanker earnings from these changes holds the potential to become both negative and positive.
Source: BIMCO | Hellenic Shipping News
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Thursday, 29 October 15
Q2' 16 FOB INDONESIA COAL SWAP CLOSED US$ 37.40 PER TON; DECLINED 5.56 PER CENT M-M
COALspot.com: Indonesian coal swap for delivery Q4 2015 declined month on month and week over week.
The Q4 swap declined $ 2.13 (-5.34%) per t ...
Wednesday, 28 October 15
Q2'16 FOB RICHARDS BAY COAL SWAP SEES FURTHER DECLINES
COALspot.com: API4 FOB Richards Bay Coal swap for delivery Q4' 2015 gained week over week and declined month over month.
The Q4 swap was d ...
Wednesday, 28 October 15
BDI INCREASE TOOK PLACE SOLELY ON THE BACK OF CAPESIZE PERFORMANCE, BUT........ - INTERMODAL
COALspot.com: The Dry Bulk market closed off the week noting a small improvement which nonetheless failed to lift sentiment, not only because ...
Tuesday, 27 October 15
Q1'16 API 5 FOB NEWCASTLE COAL SWAP DECLINE 6 PER CENT M-M
COALspot.com: API 5 FOB Newcastle Coal swap for Q4’ 2015 delivery decreased $2 per ton (4.66%) month over month to US$ 40.93 per ton. The swa ...
Monday, 26 October 15
PORT OF NEWCASTLE SHIPPED 10.5 PER CENT LESS COAL IN SEPTEMBER, COMPARED TO AUGUST LOADING
COALspot.com: The Port of Newcastle, Australia’s major trading ports and the world’s largest coal export port, has shipped $1.161 billi ...
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Showing 2746 to 2750 news of total 6871 |
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- Antam Resourcindo - Indonesia
- Bulk Trading Sa - Switzerland
- Mercator Lines Limited - India
- Bukit Baiduri Energy - Indonesia
- Samtan Co., Ltd - South Korea
- International Coal Ventures Pvt Ltd - India
- Kepco SPC Power Corporation, Philippines
- Ambuja Cements Ltd - India
- Global Coal Blending Company Limited - Australia
- Krishnapatnam Port Company Ltd. - India
- Baramulti Group, Indonesia
- Siam City Cement PLC, Thailand
- Standard Chartered Bank - UAE
- Petron Corporation, Philippines
- Madhucon Powers Ltd - India
- AsiaOL BioFuels Corp., Philippines
- Petrochimia International Co. Ltd.- Taiwan
- LBH Netherlands Bv - Netherlands
- Bahari Cakrawala Sebuku - Indonesia
- Uttam Galva Steels Limited - India
- Edison Trading Spa - Italy
- Ministry of Transport, Egypt
- Dalmia Cement Bharat India
- Directorate General of MIneral and Coal - Indonesia
- India Bulls Power Limited - India
- Rashtriya Ispat Nigam Limited - India
- Africa Commodities Group - South Africa
- Meenaskhi Energy Private Limited - India
- Planning Commission, India
- Electricity Generating Authority of Thailand
- Trasteel International SA, Italy
- Wood Mackenzie - Singapore
- Coastal Gujarat Power Limited - India
- Thiess Contractors Indonesia
- Toyota Tsusho Corporation, Japan
- Bharathi Cement Corporation - India
- Georgia Ports Authority, United States
- Eastern Energy - Thailand
- Offshore Bulk Terminal Pte Ltd, Singapore
- Mercuria Energy - Indonesia
- Larsen & Toubro Limited - India
- Sojitz Corporation - Japan
- Indian Energy Exchange, India
- Globalindo Alam Lestari - Indonesia
- Minerals Council of Australia
- Videocon Industries ltd - India
- Banpu Public Company Limited - Thailand
- Wilmar Investment Holdings
- Orica Mining Services - Indonesia
- Alfred C Toepfer International GmbH - Germany
- The Treasury - Australian Government
- Bank of Tokyo Mitsubishi UFJ Ltd
- SMC Global Power, Philippines
- Thai Mozambique Logistica
- Miang Besar Coal Terminal - Indonesia
- Kaltim Prima Coal - Indonesia
- Bhatia International Limited - India
- Siam City Cement - Thailand
- MS Steel International - UAE
- Oldendorff Carriers - Singapore
- Indo Tambangraya Megah - Indonesia
- Kohat Cement Company Ltd. - Pakistan
- South Luzon Thermal Energy Corporation
- Meralco Power Generation, Philippines
- Parliament of New Zealand
- IEA Clean Coal Centre - UK
- Jaiprakash Power Ventures ltd
- Bukit Asam (Persero) Tbk - Indonesia
- Energy Link Ltd, New Zealand
- Independent Power Producers Association of India
- CNBM International Corporation - China
- Ministry of Finance - Indonesia
- Pipit Mutiara Jaya. PT, Indonesia
- Holcim Trading Pte Ltd - Singapore
- Directorate Of Revenue Intelligence - India
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Therma Luzon, Inc, Philippines
- Kideco Jaya Agung - Indonesia
- San Jose City I Power Corp, Philippines
- Anglo American - United Kingdom
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Jorong Barutama Greston.PT - Indonesia
- McConnell Dowell - Australia
- Indian Oil Corporation Limited
- Indogreen Group - Indonesia
- PNOC Exploration Corporation - Philippines
- Timah Investasi Mineral - Indoneisa
- Gujarat Mineral Development Corp Ltd - India
- ASAPP Information Group - India
- Parry Sugars Refinery, India
- Grasim Industreis Ltd - India
- Vizag Seaport Private Limited - India
- Maheswari Brothers Coal Limited - India
- Kartika Selabumi Mining - Indonesia
- Billiton Holdings Pty Ltd - Australia
- Vedanta Resources Plc - India
- Energy Development Corp, Philippines
- Romanian Commodities Exchange
- Jindal Steel & Power Ltd - India
- Marubeni Corporation - India
- ICICI Bank Limited - India
- Posco Energy - South Korea
- Maharashtra Electricity Regulatory Commission - India
- Xindia Steels Limited - India
- Intertek Mineral Services - Indonesia
- Semirara Mining Corp, Philippines
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Formosa Plastics Group - Taiwan
- Orica Australia Pty. Ltd.
- Electricity Authority, New Zealand
- Power Finance Corporation Ltd., India
- Essar Steel Hazira Ltd - India
- Kapuas Tunggal Persada - Indonesia
- Binh Thuan Hamico - Vietnam
- Manunggal Multi Energi - Indonesia
- Renaissance Capital - South Africa
- Indika Energy - Indonesia
- Aditya Birla Group - India
- Kumho Petrochemical, South Korea
- Port Waratah Coal Services - Australia
- Commonwealth Bank - Australia
- Indonesian Coal Mining Association
- Central Electricity Authority - India
- Global Business Power Corporation, Philippines
- Mjunction Services Limited - India
- Coalindo Energy - Indonesia
- Sinarmas Energy and Mining - Indonesia
- VISA Power Limited - India
- PetroVietnam Power Coal Import and Supply Company
- Makarim & Taira - Indonesia
- SMG Consultants - Indonesia
- GVK Power & Infra Limited - India
- Tamil Nadu electricity Board
- Bhushan Steel Limited - India
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- IHS Mccloskey Coal Group - USA
- GN Power Mariveles Coal Plant, Philippines
- Simpson Spence & Young - Indonesia
- PTC India Limited - India
- New Zealand Coal & Carbon
- Mintek Dendrill Indonesia
- GMR Energy Limited - India
- OPG Power Generation Pvt Ltd - India
- Price Waterhouse Coopers - Russia
- Metalloyd Limited - United Kingdom
- Heidelberg Cement - Germany
- Australian Coal Association
- Salva Resources Pvt Ltd - India
- TNB Fuel Sdn Bhd - Malaysia
- Pendopo Energi Batubara - Indonesia
- Malabar Cements Ltd - India
- CIMB Investment Bank - Malaysia
- Ceylon Electricity Board - Sri Lanka
- Chettinad Cement Corporation Ltd - India
- Australian Commodity Traders Exchange
- Bukit Makmur.PT - Indonesia
- Ministry of Mines - Canada
- Straits Asia Resources Limited - Singapore
- Aboitiz Power Corporation - Philippines
- Sree Jayajothi Cements Limited - India
- Deloitte Consulting - India
- Cigading International Bulk Terminal - Indonesia
- Sarangani Energy Corporation, Philippines
- Star Paper Mills Limited - India
- European Bulk Services B.V. - Netherlands
- The State Trading Corporation of India Ltd
- Tata Chemicals Ltd - India
- Chamber of Mines of South Africa
- Interocean Group of Companies - India
- Central Java Power - Indonesia
- Ind-Barath Power Infra Limited - India
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Cement Manufacturers Association - India
- Karbindo Abesyapradhi - Indoneisa
- Economic Council, Georgia
- Leighton Contractors Pty Ltd - Australia
- Borneo Indobara - Indonesia
- Bayan Resources Tbk. - Indonesia
- Coal and Oil Company - UAE
- Semirara Mining and Power Corporation, Philippines
- Agrawal Coal Company - India
- Attock Cement Pakistan Limited
- PowerSource Philippines DevCo
- Bangladesh Power Developement Board
- Asmin Koalindo Tuhup - Indonesia
- Karaikal Port Pvt Ltd - India
- Latin American Coal - Colombia
- Sakthi Sugars Limited - India
- Rio Tinto Coal - Australia
- The University of Queensland
- Vijayanagar Sugar Pvt Ltd - India
- Bhoruka Overseas - Indonesia
- Iligan Light & Power Inc, Philippines
- Barasentosa Lestari - Indonesia
- Sindya Power Generating Company Private Ltd
- Neyveli Lignite Corporation Ltd, - India
- Gujarat Electricity Regulatory Commission - India
- Sical Logistics Limited - India
- Riau Bara Harum - Indonesia
- Altura Mining Limited, Indonesia
- White Energy Company Limited
- Gujarat Sidhee Cement - India
- SN Aboitiz Power Inc, Philippines
- Medco Energi Mining Internasional
- Singapore Mercantile Exchange
- Global Green Power PLC Corporation, Philippines
- Eastern Coal Council - USA
- Kobexindo Tractors - Indoneisa
- London Commodity Brokers - England
- TeaM Sual Corporation - Philippines
- Kalimantan Lumbung Energi - Indonesia
- Savvy Resources Ltd - HongKong
- GAC Shipping (India) Pvt Ltd
- Lanco Infratech Ltd - India
- Carbofer General Trading SA - India
- Merrill Lynch Commodities Europe
- Goldman Sachs - Singapore
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