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Tuesday, 03 November 15
EU OIL MAJORS FACE FURTHER EARNINGS DECLINE IN Q415 - FITCH RATINGS
 The sharp drop in major European oil companies' third-quarter profits is likely to be extended in the fourth quarter as refining margins, which had cushioned some of the blow from low oil prices, have fallen steeply, Fitch Ratings says.
According to Fitch, with little prospect of a near-term oil-price recovery and refining margins likely to remain thin, companies' ability to stabilize or even grow profits in 2016 will depend on how quickly cost-cutting measures and cost deflation in the supply chain feed through to the bottom line.
Royal Dutch Shell, Total, BP, Eni and BG all reported 3Q15 results last week. On average, their 3Q15 EBITDA fell by 26% compared with 2Q15, and cash flow from operations by 30%. The main reason was lower oil prices as Brent slid 19% from an average USD63/bbl in 2Q15 to USD51/bbl in 3Q15. The majors' 9M15 EBITDA dropped 39%, and cash from operations fell 38%, as Brent plummeted by 48%, from an average of USD107/bbl in 9M14 to USD56 in 9M15.
4Q15 may be even more painful for integrated companies as refining margins have fallen since the middle of the third quarter, which is likely to drag on profits in their downstream operations. In October, Brent Crack Rotterdam Refinery Margin, as calculated by Thomson Reuters, averaged USD4.0/bbl, compared with USD7.9 in 3Q15 and USD8.1 in 2Q15.
Part of this decline is likely to be a seasonal effect from the end of the main driving season in the northern hemisphere. But we also expect an underlying correction in margins due to overcapacity in European refining and strong competition from Middle Eastern, Russian and US refineries, which generally have access to cheaper feedstock and lower energy costs, says Fitch. BG may be the only exception. We expect its earnings to rise in 4Q15 vs 3Q15 provided oil prices do not fall. This is because BG has no exposure to refining and its production is rising due to operations ramping up in Australia and Brazil.
Apart from oil prices, majors' upstream profits will be increasingly affected by the scale of cost deflation. Oil majors are reducing costs and in some parts of the value chain, the fall has already been substantial. For example, in the offshore drilling industry the cost of hiring a rig has fallen by 30%-40% yoy, according to various sources. According to Total, rates for many other services, including marine logistics and well services, are down up to 20%. Overall, however, industry deflation is still insufficient to materially affect profits, as negotiating new contracts may take some time. We expect the impact to be more pronounced in 2016 as oil majors are now re-negotiating prices with their contractors and are aiming to reduce staff costs and streamline operations.
To balance their cash flows, oil majors are reducing capex and continuing divestments. Majors' ability to keep these commitments without jeopardizing the level and quality of reserves and production will drive their ratings in the next one or two years. For example, BP said its 2015-2017 capex will be USD17bn-19bn a year, compared with the original 2015 guidance of USD24bn-26bn announced a year ago. Total's guidance for 2015 is unchanged at USD23bn-24bn, but the company said capex will go down to USD20bn-21bn in 2016 and USD17bn-19bn a year in 2017-2019. Shell said it will prioritize debt reduction over dividends and capex.
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Tuesday, 01 September 15
FOB RICHARDS BAY COAL SWAPS STILL SLIDING; Q2'16 DELIVERY LOST AROUND 6 PERCENT M-O-M
COALspot.com: API4 FOB Richards Bay Coal swap for delivery 4Q' 2015 gain week over week but declined month over month.
The 4Q swap was dow ...
Monday, 31 August 15
API 5 FOB NEWCASTLE COAL SWAP GAINS WEEK OVER WEEK
COALspot.com: API 5 FOB Newcastle Coal swap for 4Q’ 2015 delivery down $ 1.85 per MT (-4.23%) month over month to US$ 41.87 per mt. The swap ...
Monday, 31 August 15
Q1'16 CFR SOUTH CHINA COAL SWAP ENDS DOWN MORE THAN 4 PERCENT MONTH OVER MONTH
COALspot.com: API 8 CFR South China Coal swap for 4Q’ 2015 delivery declined just US$ 1.91 (3.78%) per MT month over month.
A commodity ...
Sunday, 30 August 15
THE DRY BULK MARKET UNDOUBTEDLY REMAINS WEAK & VOLATILE THIS WEEK
COALspot.com: The BDI slipped further down this week, moving closer to 900 level. This week’s BDI falls 9.15 pct and closed at 903 points. Wh ...
Friday, 28 August 15
DRY BULK SHIP OWNER OPTIMISTIC ABOUT FUTURE PROSPECTS OF THE MARKET: NIKOS ROUSSANOGLOU, HELLENIC SHIPPING NEWS
Dry bulk ship owner Golden Ocean appeared optimistic on the long term prospects of the dry bulk market, mainly thanks to an expected resolution of ...
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- Timah Investasi Mineral - Indoneisa
- Australian Coal Association
- SN Aboitiz Power Inc, Philippines
- VISA Power Limited - India
- Rashtriya Ispat Nigam Limited - India
- Globalindo Alam Lestari - Indonesia
- Parry Sugars Refinery, India
- Sindya Power Generating Company Private Ltd
- Thiess Contractors Indonesia
- Global Business Power Corporation, Philippines
- Semirara Mining Corp, Philippines
- Iligan Light & Power Inc, Philippines
- Metalloyd Limited - United Kingdom
- Malabar Cements Ltd - India
- Bangladesh Power Developement Board
- Singapore Mercantile Exchange
- Kobexindo Tractors - Indoneisa
- Toyota Tsusho Corporation, Japan
- Sical Logistics Limited - India
- SMG Consultants - Indonesia
- GVK Power & Infra Limited - India
- Indo Tambangraya Megah - Indonesia
- IEA Clean Coal Centre - UK
- Gujarat Mineral Development Corp Ltd - India
- Price Waterhouse Coopers - Russia
- Xindia Steels Limited - India
- Rio Tinto Coal - Australia
- Goldman Sachs - Singapore
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Siam City Cement PLC, Thailand
- Merrill Lynch Commodities Europe
- Videocon Industries ltd - India
- Aboitiz Power Corporation - Philippines
- Gujarat Electricity Regulatory Commission - India
- Miang Besar Coal Terminal - Indonesia
- Indogreen Group - Indonesia
- Wood Mackenzie - Singapore
- Central Java Power - Indonesia
- Trasteel International SA, Italy
- Mercuria Energy - Indonesia
- ASAPP Information Group - India
- Bhushan Steel Limited - India
- Jaiprakash Power Ventures ltd
- Indian Oil Corporation Limited
- Edison Trading Spa - Italy
- Barasentosa Lestari - Indonesia
- Kaltim Prima Coal - Indonesia
- Dalmia Cement Bharat India
- Simpson Spence & Young - Indonesia
- Economic Council, Georgia
- Jorong Barutama Greston.PT - Indonesia
- Posco Energy - South Korea
- Chamber of Mines of South Africa
- Vedanta Resources Plc - India
- Banpu Public Company Limited - Thailand
- Sinarmas Energy and Mining - Indonesia
- Heidelberg Cement - Germany
- Kideco Jaya Agung - Indonesia
- Bhatia International Limited - India
- Madhucon Powers Ltd - India
- Manunggal Multi Energi - Indonesia
- Samtan Co., Ltd - South Korea
- MS Steel International - UAE
- Baramulti Group, Indonesia
- Kapuas Tunggal Persada - Indonesia
- Billiton Holdings Pty Ltd - Australia
- Bukit Asam (Persero) Tbk - Indonesia
- Independent Power Producers Association of India
- Makarim & Taira - Indonesia
- Larsen & Toubro Limited - India
- Ministry of Mines - Canada
- Coastal Gujarat Power Limited - India
- Mjunction Services Limited - India
- Offshore Bulk Terminal Pte Ltd, Singapore
- ICICI Bank Limited - India
- Electricity Generating Authority of Thailand
- Ind-Barath Power Infra Limited - India
- Jindal Steel & Power Ltd - India
- Attock Cement Pakistan Limited
- McConnell Dowell - Australia
- AsiaOL BioFuels Corp., Philippines
- Romanian Commodities Exchange
- Bahari Cakrawala Sebuku - Indonesia
- Directorate Of Revenue Intelligence - India
- White Energy Company Limited
- Parliament of New Zealand
- Maharashtra Electricity Regulatory Commission - India
- Bulk Trading Sa - Switzerland
- Uttam Galva Steels Limited - India
- Bhoruka Overseas - Indonesia
- Deloitte Consulting - India
- Savvy Resources Ltd - HongKong
- Binh Thuan Hamico - Vietnam
- Bayan Resources Tbk. - Indonesia
- Gujarat Sidhee Cement - India
- Africa Commodities Group - South Africa
- Krishnapatnam Port Company Ltd. - India
- Tata Chemicals Ltd - India
- Mintek Dendrill Indonesia
- Carbofer General Trading SA - India
- Interocean Group of Companies - India
- Planning Commission, India
- Ambuja Cements Ltd - India
- Minerals Council of Australia
- London Commodity Brokers - England
- Cement Manufacturers Association - India
- Cigading International Bulk Terminal - Indonesia
- Global Green Power PLC Corporation, Philippines
- New Zealand Coal & Carbon
- Vizag Seaport Private Limited - India
- Eastern Energy - Thailand
- TeaM Sual Corporation - Philippines
- Kohat Cement Company Ltd. - Pakistan
- Maheswari Brothers Coal Limited - India
- The University of Queensland
- Electricity Authority, New Zealand
- Petrochimia International Co. Ltd.- Taiwan
- Central Electricity Authority - India
- Medco Energi Mining Internasional
- CNBM International Corporation - China
- Thai Mozambique Logistica
- Kepco SPC Power Corporation, Philippines
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Lanco Infratech Ltd - India
- Power Finance Corporation Ltd., India
- Energy Link Ltd, New Zealand
- GN Power Mariveles Coal Plant, Philippines
- Pendopo Energi Batubara - Indonesia
- Kartika Selabumi Mining - Indonesia
- Kumho Petrochemical, South Korea
- Indonesian Coal Mining Association
- South Luzon Thermal Energy Corporation
- IHS Mccloskey Coal Group - USA
- Alfred C Toepfer International GmbH - Germany
- Ceylon Electricity Board - Sri Lanka
- Global Coal Blending Company Limited - Australia
- Sojitz Corporation - Japan
- International Coal Ventures Pvt Ltd - India
- Riau Bara Harum - Indonesia
- Marubeni Corporation - India
- Kalimantan Lumbung Energi - Indonesia
- Sakthi Sugars Limited - India
- Meenaskhi Energy Private Limited - India
- Tamil Nadu electricity Board
- Coal and Oil Company - UAE
- Bharathi Cement Corporation - India
- GAC Shipping (India) Pvt Ltd
- Renaissance Capital - South Africa
- Grasim Industreis Ltd - India
- Straits Asia Resources Limited - Singapore
- Siam City Cement - Thailand
- The State Trading Corporation of India Ltd
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Ministry of Finance - Indonesia
- San Jose City I Power Corp, Philippines
- GMR Energy Limited - India
- Aditya Birla Group - India
- Georgia Ports Authority, United States
- Indika Energy - Indonesia
- Bank of Tokyo Mitsubishi UFJ Ltd
- Ministry of Transport, Egypt
- PNOC Exploration Corporation - Philippines
- Orica Australia Pty. Ltd.
- CIMB Investment Bank - Malaysia
- Pipit Mutiara Jaya. PT, Indonesia
- Karaikal Port Pvt Ltd - India
- Bukit Makmur.PT - Indonesia
- Eastern Coal Council - USA
- Semirara Mining and Power Corporation, Philippines
- PowerSource Philippines DevCo
- Petron Corporation, Philippines
- Indian Energy Exchange, India
- Essar Steel Hazira Ltd - India
- Directorate General of MIneral and Coal - Indonesia
- Salva Resources Pvt Ltd - India
- Sarangani Energy Corporation, Philippines
- Commonwealth Bank - Australia
- Borneo Indobara - Indonesia
- Antam Resourcindo - Indonesia
- Coalindo Energy - Indonesia
- Altura Mining Limited, Indonesia
- Intertek Mineral Services - Indonesia
- Holcim Trading Pte Ltd - Singapore
- Meralco Power Generation, Philippines
- Bukit Baiduri Energy - Indonesia
- TNB Fuel Sdn Bhd - Malaysia
- Port Waratah Coal Services - Australia
- Leighton Contractors Pty Ltd - Australia
- Energy Development Corp, Philippines
- Wilmar Investment Holdings
- The Treasury - Australian Government
- Australian Commodity Traders Exchange
- Sree Jayajothi Cements Limited - India
- European Bulk Services B.V. - Netherlands
- Orica Mining Services - Indonesia
- Chettinad Cement Corporation Ltd - India
- Neyveli Lignite Corporation Ltd, - India
- Star Paper Mills Limited - India
- OPG Power Generation Pvt Ltd - India
- PTC India Limited - India
- India Bulls Power Limited - India
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Oldendorff Carriers - Singapore
- PetroVietnam Power Coal Import and Supply Company
- Agrawal Coal Company - India
- Standard Chartered Bank - UAE
- Latin American Coal - Colombia
- Mercator Lines Limited - India
- Therma Luzon, Inc, Philippines
- LBH Netherlands Bv - Netherlands
- Asia Pacific Energy Resources Ventures Inc, Philippines
- SMC Global Power, Philippines
- Vijayanagar Sugar Pvt Ltd - India
- Anglo American - United Kingdom
- Karbindo Abesyapradhi - Indoneisa
- Formosa Plastics Group - Taiwan
- Asmin Koalindo Tuhup - Indonesia
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