We welcome article submissions from experts in the areas of coal, mining,
shipping, etc.
To Submit your article please click here.
|
|
|
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
If you believe an article violates your rights or the rights of others, please contact us.
|
|
Thursday, 17 September 15
MARKET INSIGHT - KONSTANTINOS KONTOMICHIS
Having experienced, as it was much anticipated, a poor 1st half combined with negative forecasts, summer, in sharp contrast, proved to be more hope ...
Wednesday, 16 September 15
SLOWER GROWTH IN WORLD COAL DEMAND AND LOWER INTERNATIONAL COAL PRICES LED A DECLINE IN INDONESIAN COAL PRODUCTION
COALspot.com: Slower growth in world coal demand particularly China and lower international coal prices have led to a decline in Indonesian coal pr ...
Wednesday, 16 September 15
HIGHER TAXES COULD LEAD GREEK SHIP OWNERS OUT OF THE COUNTRY - NIKOS ROUSSANOGLOU, HELLENIC SHIPPING NEWS
A potential taxation overhaul of the shipping industry in Hellas, which could see the loss of particular tax benefits for ship owners, could lead t ...
Tuesday, 15 September 15
WORLD SEABORNE TRADE: ENTERING INTO A ROLE REVERSAL? - CLARKSONS
Over the past decade, world seaborne trade growth has been dominated by dry bulk and container trade. However, developments in the global economy t ...
Tuesday, 15 September 15
Q2'16 RICHARDS BAY COAL SWAPS DIP TO $ 51.10 PER TON
COALspot.com: API4 FOB Richards Bay Coal swap for delivery 4Q' 2015 declined week over week and month over month.
The 4Q swap was down US$ ...
|
|
|
Showing 2811 to 2815 news of total 6871 |
|
 |
|
|
|
|
| |
|
 |
|
|
| |
|
- Maheswari Brothers Coal Limited - India
- Goldman Sachs - Singapore
- PowerSource Philippines DevCo
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Global Coal Blending Company Limited - Australia
- Ambuja Cements Ltd - India
- Ministry of Mines - Canada
- Commonwealth Bank - Australia
- Bhoruka Overseas - Indonesia
- Indian Oil Corporation Limited
- Offshore Bulk Terminal Pte Ltd, Singapore
- TNB Fuel Sdn Bhd - Malaysia
- Samtan Co., Ltd - South Korea
- Petron Corporation, Philippines
- London Commodity Brokers - England
- AsiaOL BioFuels Corp., Philippines
- Iligan Light & Power Inc, Philippines
- The University of Queensland
- Savvy Resources Ltd - HongKong
- Wood Mackenzie - Singapore
- Kapuas Tunggal Persada - Indonesia
- GMR Energy Limited - India
- Price Waterhouse Coopers - Russia
- Semirara Mining Corp, Philippines
- Parliament of New Zealand
- Siam City Cement PLC, Thailand
- Australian Commodity Traders Exchange
- Planning Commission, India
- South Luzon Thermal Energy Corporation
- European Bulk Services B.V. - Netherlands
- Krishnapatnam Port Company Ltd. - India
- Manunggal Multi Energi - Indonesia
- Vijayanagar Sugar Pvt Ltd - India
- Kalimantan Lumbung Energi - Indonesia
- Bahari Cakrawala Sebuku - Indonesia
- Mercuria Energy - Indonesia
- Rio Tinto Coal - Australia
- PetroVietnam Power Coal Import and Supply Company
- Ministry of Finance - Indonesia
- Mjunction Services Limited - India
- Directorate Of Revenue Intelligence - India
- Semirara Mining and Power Corporation, Philippines
- Billiton Holdings Pty Ltd - Australia
- Standard Chartered Bank - UAE
- Edison Trading Spa - Italy
- Chamber of Mines of South Africa
- Romanian Commodities Exchange
- Parry Sugars Refinery, India
- Sindya Power Generating Company Private Ltd
- Bharathi Cement Corporation - India
- Ind-Barath Power Infra Limited - India
- Coastal Gujarat Power Limited - India
- Bulk Trading Sa - Switzerland
- McConnell Dowell - Australia
- PNOC Exploration Corporation - Philippines
- Global Green Power PLC Corporation, Philippines
- Xindia Steels Limited - India
- SMG Consultants - Indonesia
- Indo Tambangraya Megah - Indonesia
- GAC Shipping (India) Pvt Ltd
- MS Steel International - UAE
- Tata Chemicals Ltd - India
- Heidelberg Cement - Germany
- Karbindo Abesyapradhi - Indoneisa
- Aboitiz Power Corporation - Philippines
- Karaikal Port Pvt Ltd - India
- Petrochimia International Co. Ltd.- Taiwan
- Africa Commodities Group - South Africa
- Bhushan Steel Limited - India
- ICICI Bank Limited - India
- Energy Development Corp, Philippines
- Electricity Authority, New Zealand
- Altura Mining Limited, Indonesia
- Cement Manufacturers Association - India
- Jindal Steel & Power Ltd - India
- India Bulls Power Limited - India
- Coalindo Energy - Indonesia
- Port Waratah Coal Services - Australia
- Renaissance Capital - South Africa
- Deloitte Consulting - India
- Singapore Mercantile Exchange
- Gujarat Mineral Development Corp Ltd - India
- Indian Energy Exchange, India
- Miang Besar Coal Terminal - Indonesia
- Straits Asia Resources Limited - Singapore
- Vizag Seaport Private Limited - India
- Meenaskhi Energy Private Limited - India
- Kepco SPC Power Corporation, Philippines
- Sinarmas Energy and Mining - Indonesia
- Power Finance Corporation Ltd., India
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- PTC India Limited - India
- Mercator Lines Limited - India
- Simpson Spence & Young - Indonesia
- Neyveli Lignite Corporation Ltd, - India
- Central Java Power - Indonesia
- The Treasury - Australian Government
- Indogreen Group - Indonesia
- Kideco Jaya Agung - Indonesia
- Banpu Public Company Limited - Thailand
- Bukit Baiduri Energy - Indonesia
- Gujarat Sidhee Cement - India
- Energy Link Ltd, New Zealand
- Orica Australia Pty. Ltd.
- Electricity Generating Authority of Thailand
- Posco Energy - South Korea
- Bukit Makmur.PT - Indonesia
- SMC Global Power, Philippines
- Jaiprakash Power Ventures ltd
- Central Electricity Authority - India
- Dalmia Cement Bharat India
- Oldendorff Carriers - Singapore
- Salva Resources Pvt Ltd - India
- Grasim Industreis Ltd - India
- Uttam Galva Steels Limited - India
- Tamil Nadu electricity Board
- Kartika Selabumi Mining - Indonesia
- The State Trading Corporation of India Ltd
- Indika Energy - Indonesia
- ASAPP Information Group - India
- Bank of Tokyo Mitsubishi UFJ Ltd
- Binh Thuan Hamico - Vietnam
- Gujarat Electricity Regulatory Commission - India
- Globalindo Alam Lestari - Indonesia
- Siam City Cement - Thailand
- Minerals Council of Australia
- SN Aboitiz Power Inc, Philippines
- Sree Jayajothi Cements Limited - India
- Directorate General of MIneral and Coal - Indonesia
- Meralco Power Generation, Philippines
- LBH Netherlands Bv - Netherlands
- CIMB Investment Bank - Malaysia
- Merrill Lynch Commodities Europe
- Pendopo Energi Batubara - Indonesia
- Malabar Cements Ltd - India
- Holcim Trading Pte Ltd - Singapore
- Formosa Plastics Group - Taiwan
- Sical Logistics Limited - India
- Wilmar Investment Holdings
- Asmin Koalindo Tuhup - Indonesia
- Videocon Industries ltd - India
- Economic Council, Georgia
- Indonesian Coal Mining Association
- Riau Bara Harum - Indonesia
- Baramulti Group, Indonesia
- Anglo American - United Kingdom
- VISA Power Limited - India
- Barasentosa Lestari - Indonesia
- Ceylon Electricity Board - Sri Lanka
- Thiess Contractors Indonesia
- Borneo Indobara - Indonesia
- Thai Mozambique Logistica
- Eastern Energy - Thailand
- Kobexindo Tractors - Indoneisa
- Coal and Oil Company - UAE
- Kaltim Prima Coal - Indonesia
- Independent Power Producers Association of India
- Toyota Tsusho Corporation, Japan
- GVK Power & Infra Limited - India
- Makarim & Taira - Indonesia
- Lanco Infratech Ltd - India
- Sarangani Energy Corporation, Philippines
- Marubeni Corporation - India
- Orica Mining Services - Indonesia
- Interocean Group of Companies - India
- Essar Steel Hazira Ltd - India
- San Jose City I Power Corp, Philippines
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Ministry of Transport, Egypt
- Eastern Coal Council - USA
- Antam Resourcindo - Indonesia
- Attock Cement Pakistan Limited
- Agrawal Coal Company - India
- White Energy Company Limited
- GN Power Mariveles Coal Plant, Philippines
- Jorong Barutama Greston.PT - Indonesia
- Timah Investasi Mineral - Indoneisa
- Vedanta Resources Plc - India
- Georgia Ports Authority, United States
- Carbofer General Trading SA - India
- Mintek Dendrill Indonesia
- Cigading International Bulk Terminal - Indonesia
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- New Zealand Coal & Carbon
- Maharashtra Electricity Regulatory Commission - India
- Chettinad Cement Corporation Ltd - India
- International Coal Ventures Pvt Ltd - India
- Global Business Power Corporation, Philippines
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Pipit Mutiara Jaya. PT, Indonesia
- Latin American Coal - Colombia
- Bangladesh Power Developement Board
- Intertek Mineral Services - Indonesia
- IHS Mccloskey Coal Group - USA
- IEA Clean Coal Centre - UK
- Aditya Birla Group - India
- Bhatia International Limited - India
- CNBM International Corporation - China
- Kohat Cement Company Ltd. - Pakistan
- Leighton Contractors Pty Ltd - Australia
- Larsen & Toubro Limited - India
- Therma Luzon, Inc, Philippines
- Madhucon Powers Ltd - India
- Trasteel International SA, Italy
- Medco Energi Mining Internasional
- OPG Power Generation Pvt Ltd - India
- Alfred C Toepfer International GmbH - Germany
- Bukit Asam (Persero) Tbk - Indonesia
- TeaM Sual Corporation - Philippines
- Metalloyd Limited - United Kingdom
- Sojitz Corporation - Japan
- Kumho Petrochemical, South Korea
- Australian Coal Association
- Star Paper Mills Limited - India
- Sakthi Sugars Limited - India
- Rashtriya Ispat Nigam Limited - India
- Bayan Resources Tbk. - Indonesia
|
| |
| |
|
