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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, 25 August 15
INDONESIA MINERS' NPLS TO RISE FURTHER, BANK RISKS BUILD - FITCH
The NPLs of Indonesian mine and mine services companies are likely to rise further in the short term, says Fitch Ratings, after reaching multi-year ...
Tuesday, 25 August 15
MINER'S EARNINGS DROP ON FALLING COAL PRICES; Q2'16 FOB RICHARDS BAY COAL SWAP CLOSED AT $ 52.23 A TON
COALspot.com: API4 FOB Richards Bay Coal swap for delivery 4Q' 2015 declined month over month and week over week.
The 4Q swap was down US$ ...
Monday, 24 August 15
FOB NEWCASTLE COAL SWAPS HIT FRESH LOW, DIPPING BELOW $42 A TON
COALspot.com: API 5 FOB Newcastle Coal swap for 4Q’ 2015 delivery down $ 2.20 per MT (-5.01%) month over month to US$ 41.70 per mt. The swap ...
Monday, 24 August 15
Q1'16 CFR SOUTH CHINA COAL SWAP CLOSED AT $ 48.65 PMT
COALspot.com: API 8 CFR South China Coal swap for 4Q’ 2015 delivery declined just US$ 1.89 (3.74%) per MT month over month.
A commodity ...
Monday, 24 August 15
IS CHINA'S STEEL EXPORTS ENOUGH TO SUPPORT THE FREIGHT MARKET? - BIMCO
No, it’s not enough, you will need lower Chinese iron ore production too in order to keep growing imports of iron ore into China that will su ...
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- San Jose City I Power Corp, Philippines
- European Bulk Services B.V. - Netherlands
- The University of Queensland
- Semirara Mining and Power Corporation, Philippines
- White Energy Company Limited
- Global Business Power Corporation, Philippines
- Indonesian Coal Mining Association
- Africa Commodities Group - South Africa
- Bank of Tokyo Mitsubishi UFJ Ltd
- Energy Development Corp, Philippines
- Bhushan Steel Limited - India
- Oldendorff Carriers - Singapore
- Indian Energy Exchange, India
- Krishnapatnam Port Company Ltd. - India
- Australian Commodity Traders Exchange
- Indo Tambangraya Megah - Indonesia
- Jorong Barutama Greston.PT - Indonesia
- Videocon Industries ltd - India
- Mintek Dendrill Indonesia
- Interocean Group of Companies - India
- London Commodity Brokers - England
- Merrill Lynch Commodities Europe
- Bayan Resources Tbk. - Indonesia
- Meenaskhi Energy Private Limited - India
- Jaiprakash Power Ventures ltd
- Power Finance Corporation Ltd., India
- Parliament of New Zealand
- Sical Logistics Limited - India
- Wilmar Investment Holdings
- GN Power Mariveles Coal Plant, Philippines
- Metalloyd Limited - United Kingdom
- Anglo American - United Kingdom
- Kideco Jaya Agung - Indonesia
- Kaltim Prima Coal - Indonesia
- Makarim & Taira - Indonesia
- Bhoruka Overseas - Indonesia
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Global Coal Blending Company Limited - Australia
- Iligan Light & Power Inc, Philippines
- Xindia Steels Limited - India
- Vijayanagar Sugar Pvt Ltd - India
- Parry Sugars Refinery, India
- Chamber of Mines of South Africa
- SMC Global Power, Philippines
- ICICI Bank Limited - India
- Sindya Power Generating Company Private Ltd
- IHS Mccloskey Coal Group - USA
- Simpson Spence & Young - Indonesia
- Banpu Public Company Limited - Thailand
- Ambuja Cements Ltd - India
- Petrochimia International Co. Ltd.- Taiwan
- Deloitte Consulting - India
- Kobexindo Tractors - Indoneisa
- Bukit Makmur.PT - Indonesia
- Eastern Energy - Thailand
- Kohat Cement Company Ltd. - Pakistan
- TNB Fuel Sdn Bhd - Malaysia
- Ministry of Finance - Indonesia
- Mercuria Energy - Indonesia
- Globalindo Alam Lestari - Indonesia
- Sarangani Energy Corporation, Philippines
- Agrawal Coal Company - India
- New Zealand Coal & Carbon
- Vedanta Resources Plc - India
- Bharathi Cement Corporation - India
- Kartika Selabumi Mining - Indonesia
- Attock Cement Pakistan Limited
- Ind-Barath Power Infra Limited - India
- Billiton Holdings Pty Ltd - Australia
- PetroVietnam Power Coal Import and Supply Company
- Cigading International Bulk Terminal - Indonesia
- Gujarat Electricity Regulatory Commission - India
- TeaM Sual Corporation - Philippines
- Latin American Coal - Colombia
- Timah Investasi Mineral - Indoneisa
- Grasim Industreis Ltd - India
- Sakthi Sugars Limited - India
- Mercator Lines Limited - India
- Tamil Nadu electricity Board
- Siam City Cement PLC, Thailand
- Leighton Contractors Pty Ltd - Australia
- Economic Council, Georgia
- Karbindo Abesyapradhi - Indoneisa
- ASAPP Information Group - India
- Alfred C Toepfer International GmbH - Germany
- Standard Chartered Bank - UAE
- AsiaOL BioFuels Corp., Philippines
- Formosa Plastics Group - Taiwan
- Meralco Power Generation, Philippines
- Goldman Sachs - Singapore
- International Coal Ventures Pvt Ltd - India
- Manunggal Multi Energi - Indonesia
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Edison Trading Spa - Italy
- Ministry of Mines - Canada
- Sojitz Corporation - Japan
- Dalmia Cement Bharat India
- Asmin Koalindo Tuhup - Indonesia
- Maharashtra Electricity Regulatory Commission - India
- Jindal Steel & Power Ltd - India
- Port Waratah Coal Services - Australia
- Pendopo Energi Batubara - Indonesia
- Commonwealth Bank - Australia
- Siam City Cement - Thailand
- Price Waterhouse Coopers - Russia
- Semirara Mining Corp, Philippines
- Bahari Cakrawala Sebuku - Indonesia
- IEA Clean Coal Centre - UK
- Offshore Bulk Terminal Pte Ltd, Singapore
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Ceylon Electricity Board - Sri Lanka
- Singapore Mercantile Exchange
- Electricity Generating Authority of Thailand
- Savvy Resources Ltd - HongKong
- GVK Power & Infra Limited - India
- Directorate General of MIneral and Coal - Indonesia
- Gujarat Mineral Development Corp Ltd - India
- GAC Shipping (India) Pvt Ltd
- Medco Energi Mining Internasional
- Sinarmas Energy and Mining - Indonesia
- Mjunction Services Limited - India
- Carbofer General Trading SA - India
- Orica Australia Pty. Ltd.
- Barasentosa Lestari - Indonesia
- OPG Power Generation Pvt Ltd - India
- Directorate Of Revenue Intelligence - India
- Georgia Ports Authority, United States
- Sree Jayajothi Cements Limited - India
- The State Trading Corporation of India Ltd
- Kumho Petrochemical, South Korea
- Indogreen Group - Indonesia
- Heidelberg Cement - Germany
- Gujarat Sidhee Cement - India
- VISA Power Limited - India
- MS Steel International - UAE
- The Treasury - Australian Government
- Bhatia International Limited - India
- PNOC Exploration Corporation - Philippines
- GMR Energy Limited - India
- SMG Consultants - Indonesia
- Wood Mackenzie - Singapore
- Therma Luzon, Inc, Philippines
- CIMB Investment Bank - Malaysia
- Lanco Infratech Ltd - India
- Aboitiz Power Corporation - Philippines
- Vizag Seaport Private Limited - India
- Antam Resourcindo - Indonesia
- Bukit Asam (Persero) Tbk - Indonesia
- Star Paper Mills Limited - India
- Thai Mozambique Logistica
- Cement Manufacturers Association - India
- Baramulti Group, Indonesia
- Indian Oil Corporation Limited
- McConnell Dowell - Australia
- Aditya Birla Group - India
- South Luzon Thermal Energy Corporation
- Indika Energy - Indonesia
- Renaissance Capital - South Africa
- Kapuas Tunggal Persada - Indonesia
- Marubeni Corporation - India
- Maheswari Brothers Coal Limited - India
- Borneo Indobara - Indonesia
- Bangladesh Power Developement Board
- Australian Coal Association
- Romanian Commodities Exchange
- Ministry of Transport, Egypt
- Kalimantan Lumbung Energi - Indonesia
- PowerSource Philippines DevCo
- Samtan Co., Ltd - South Korea
- Coastal Gujarat Power Limited - India
- Kepco SPC Power Corporation, Philippines
- Altura Mining Limited, Indonesia
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Rashtriya Ispat Nigam Limited - India
- Rio Tinto Coal - Australia
- Petron Corporation, Philippines
- Electricity Authority, New Zealand
- Bukit Baiduri Energy - Indonesia
- Central Electricity Authority - India
- Central Java Power - Indonesia
- Riau Bara Harum - Indonesia
- Bulk Trading Sa - Switzerland
- Larsen & Toubro Limited - India
- Uttam Galva Steels Limited - India
- Thiess Contractors Indonesia
- Miang Besar Coal Terminal - Indonesia
- Malabar Cements Ltd - India
- Minerals Council of Australia
- Neyveli Lignite Corporation Ltd, - India
- Tata Chemicals Ltd - India
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Pipit Mutiara Jaya. PT, Indonesia
- Essar Steel Hazira Ltd - India
- CNBM International Corporation - China
- Energy Link Ltd, New Zealand
- Holcim Trading Pte Ltd - Singapore
- Independent Power Producers Association of India
- Global Green Power PLC Corporation, Philippines
- Karaikal Port Pvt Ltd - India
- India Bulls Power Limited - India
- Posco Energy - South Korea
- Binh Thuan Hamico - Vietnam
- SN Aboitiz Power Inc, Philippines
- Coal and Oil Company - UAE
- Eastern Coal Council - USA
- Intertek Mineral Services - Indonesia
- LBH Netherlands Bv - Netherlands
- Madhucon Powers Ltd - India
- Chettinad Cement Corporation Ltd - India
- Planning Commission, India
- Orica Mining Services - Indonesia
- Straits Asia Resources Limited - Singapore
- PTC India Limited - India
- Toyota Tsusho Corporation, Japan
- Salva Resources Pvt Ltd - India
- Coalindo Energy - Indonesia
- Trasteel International SA, Italy
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