We welcome article submissions from experts in the areas of coal, mining,
shipping, etc.
To Submit your article please click here.
|
|
|
Wednesday, 12 February 20
REFINING SET FOR A CHALLENGING 2020 - WOOD MACKENZIE
 Downstream isn’t the glamorous end of the oil business. And in Big Oil, it’s typically dwarfed by upstream. Yet having been forced to restructure and focus on costs early this century, downstream’s cash flow has underpinned a third of the Majors’ shareholder returns over the last five years.
But a laser-like focus on costs and efficiency can only take you so far. If the external environment turns against you, downstream is as vulnerable as any part of the business. The Majors’ downstream results for Q4 2019 were among the poorest since 2015. Petrochemicals is part of that story, with earnings suffering from over-investment.
Now we’re also seeing refining margins come under increasing pressure, slipping to five-year lows in the last few weeks of 2019 and the first of 2020. Alan Gelder, VP Refining, identifies two main factors.
Firstly, new regulation on marine fuels was expected to boost refining margins this year – but that hasn’t played out as expected yet. The International Maritime Organization (IMO) regulations require all vessels to reduce the level of sulphur in their engine emissions from 3.5% to 0.5% or less from 1 January.
Essentially, IMO should trigger a shift out of low-value product (High Sulphur Fuel Oil, or HSFO) into higher value Very Low Sulphur Fuel Oil (VLSFO). Refinery capacity to make VLSFO is limited, so marine gasoil, which is closely linked to the price of diesel, would top up any shortfall. This shift to high-value products was expected to drive up refining margins in 2020.
It’s only half happened. The price of VLSFO surged in Q4 and HSFO duly collapsed. The surprise was that there’s been much more VLSFO available than expected. Traders had taken advantage of low-price feedstock in late summer 2019 and built up volumes of VLSFO in storage. When the demand came in, they were ready and cashed in, big time. A single tanker loaded with 2 million barrels of VLSFO could make over US$10/bbl on the spread and pull in US$20 million-plus in cash profit.
Producers with the right crude have also fared well. Santos revealed that it had sold a single cargo of heavy sweet crude, ideal feedstock for VLSFO, at an unheard-of US$30/bbl premium to Brent. Nice work if you can get it.
What didn’t really materialise was higher demand for marine gasoil – it’s just not been needed in the volumes anticipated. Weaker marine demand for gasoil has been compounded by soft demand from heating – a much bigger market – because of warm winter weather in the northern hemisphere and lacklustre economic growth. That’s led to a glut of gasoil in inventory which is depressing refining margins.
Second, global oil demand growth forecasts are falling back sharply – potentially a more fundamental problem. The biggest factor is the coronavirus, so we have reduced our demand forecasts in China by almost 0.6 million b/d for Q1 2020. We now expect China demand to fall year-on-year by 125,000 b/d for the quarter, the worst rate since 2009. Global demand will fall by 250,000 b/d, also the worst in over a decade.
So what’s next for refining?
The VLSFO surplus should be a short-term phenomenon. There’s not enough refining capacity to supply all bunker demand with VLSFO. That gap will have to be met by additional gasoil once the surplus VLSFO in inventory is soaked up, by H2 2020 at the latest.
The prospects for oil demand are more worrying and harder to call. At this stage, we have restricted our adjustments to Q1 and left the rest of the year largely unchanged. If the virus can be contained successfully in the coming weeks, demand could bounce back strongly – much as was the case with SARS in 2003.
Refining margins so far in Q1 suggest it will take a while before refining profitability recovers. Meantime, refiners will do what they must to keep costs down and maximise cash flows, including cutting refinery runs to limit the build-up in inventory. It’s about toughing it out, waiting and hoping for demand – China in particular – to perk up again.
Source: Wood Mackenzie
If you believe an article violates your rights or the rights of others, please contact us.
|
|
Friday, 05 January 24
BANGLADESH’S 2023 COAL-FIRED POWER OUTPUT TRIPLED, EASING SHORTAGES - REUTERS
Bangladesh nearly tripled its coal-fired power output in 2023, a Reuters analysis of government data showed, helping it tide over the worst power s ...
Tuesday, 02 January 24
COAL TRADE CONTINUES TO HEAD EAST - BALTIC EXCHANGE
The global coal trade, once concentrated in the Pacific and Atlantic basins, is undergoing a significant transformation, as highlighted in the Inte ...
Tuesday, 02 January 24
COAL CARGOES: AVOIDING EXPLOSION AND SELF-HEATING - GARD
KNOWLEDGE TO ELEVATE
Despite its contribution to greenhouse gas emissions, global coal consumption climbed to an all-time high in 2022 and is ...
Tuesday, 02 January 24
SINOPEC FORECASTS CHINA’S COAL CONSUMPTION TO PEAK AROUND 2025 - REUTERS
China Petrochemical Corp, or Sinopec, expects coal consumption to peak around 2025 at 4.37 billion metric tons, the state energy group said in an o ...
Thursday, 07 December 23
CHINA TO SET UP COAL PRODUCTION RESERVE TO STABILISE PRICES - REUTERS
China will establish a back-up coal production system by 2027 to stabilise prices and secure coal supply, the state planner said on Wednesday, even ...
|
|
|
Showing 61 to 65 news of total 6871 |
|
 |
|
|
|
|
| |
|
 |
|
|
| |
|
- Leighton Contractors Pty Ltd - Australia
- Borneo Indobara - Indonesia
- Maharashtra Electricity Regulatory Commission - India
- Tata Chemicals Ltd - India
- Energy Link Ltd, New Zealand
- Grasim Industreis Ltd - India
- Energy Development Corp, Philippines
- Australian Coal Association
- Global Green Power PLC Corporation, Philippines
- Essar Steel Hazira Ltd - India
- San Jose City I Power Corp, Philippines
- Bayan Resources Tbk. - Indonesia
- Trasteel International SA, Italy
- Samtan Co., Ltd - South Korea
- Edison Trading Spa - Italy
- Sojitz Corporation - Japan
- AsiaOL BioFuels Corp., Philippines
- Vizag Seaport Private Limited - India
- Mercator Lines Limited - India
- Billiton Holdings Pty Ltd - Australia
- Attock Cement Pakistan Limited
- Ministry of Finance - Indonesia
- Petrochimia International Co. Ltd.- Taiwan
- Interocean Group of Companies - India
- Indogreen Group - Indonesia
- Altura Mining Limited, Indonesia
- Merrill Lynch Commodities Europe
- International Coal Ventures Pvt Ltd - India
- SMC Global Power, Philippines
- Holcim Trading Pte Ltd - Singapore
- Bangladesh Power Developement Board
- Xindia Steels Limited - India
- Directorate Of Revenue Intelligence - India
- Jindal Steel & Power Ltd - India
- LBH Netherlands Bv - Netherlands
- Directorate General of MIneral and Coal - Indonesia
- Timah Investasi Mineral - Indoneisa
- Carbofer General Trading SA - India
- Sical Logistics Limited - India
- Krishnapatnam Port Company Ltd. - India
- PetroVietnam Power Coal Import and Supply Company
- GVK Power & Infra Limited - India
- Chettinad Cement Corporation Ltd - India
- Rio Tinto Coal - Australia
- Parliament of New Zealand
- ICICI Bank Limited - India
- Binh Thuan Hamico - Vietnam
- Bhoruka Overseas - Indonesia
- Port Waratah Coal Services - Australia
- Cigading International Bulk Terminal - Indonesia
- Bhushan Steel Limited - India
- SMG Consultants - Indonesia
- Malabar Cements Ltd - India
- Mercuria Energy - Indonesia
- Goldman Sachs - Singapore
- Wood Mackenzie - Singapore
- Marubeni Corporation - India
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Electricity Authority, New Zealand
- Jorong Barutama Greston.PT - Indonesia
- Gujarat Mineral Development Corp Ltd - India
- Siam City Cement PLC, Thailand
- Central Java Power - Indonesia
- Georgia Ports Authority, United States
- Global Business Power Corporation, Philippines
- Commonwealth Bank - Australia
- Ambuja Cements Ltd - India
- Petron Corporation, Philippines
- Aboitiz Power Corporation - Philippines
- Singapore Mercantile Exchange
- Uttam Galva Steels Limited - India
- Bhatia International Limited - India
- Romanian Commodities Exchange
- Rashtriya Ispat Nigam Limited - India
- Antam Resourcindo - Indonesia
- Baramulti Group, Indonesia
- Iligan Light & Power Inc, Philippines
- Kalimantan Lumbung Energi - Indonesia
- Oldendorff Carriers - Singapore
- Thai Mozambique Logistica
- Bulk Trading Sa - Switzerland
- Kapuas Tunggal Persada - Indonesia
- CNBM International Corporation - China
- Minerals Council of Australia
- IHS Mccloskey Coal Group - USA
- PowerSource Philippines DevCo
- Bank of Tokyo Mitsubishi UFJ Ltd
- Renaissance Capital - South Africa
- Kideco Jaya Agung - Indonesia
- Therma Luzon, Inc, Philippines
- Gujarat Sidhee Cement - India
- Ministry of Transport, Egypt
- Cement Manufacturers Association - India
- Pendopo Energi Batubara - Indonesia
- Vijayanagar Sugar Pvt Ltd - India
- Aditya Birla Group - India
- Africa Commodities Group - South Africa
- Meenaskhi Energy Private Limited - India
- Alfred C Toepfer International GmbH - Germany
- Semirara Mining Corp, Philippines
- Price Waterhouse Coopers - Russia
- The University of Queensland
- Electricity Generating Authority of Thailand
- Bahari Cakrawala Sebuku - Indonesia
- Meralco Power Generation, Philippines
- Karbindo Abesyapradhi - Indoneisa
- Asmin Koalindo Tuhup - Indonesia
- McConnell Dowell - Australia
- Kaltim Prima Coal - Indonesia
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Economic Council, Georgia
- Metalloyd Limited - United Kingdom
- Kohat Cement Company Ltd. - Pakistan
- Global Coal Blending Company Limited - Australia
- The State Trading Corporation of India Ltd
- Karaikal Port Pvt Ltd - India
- Sinarmas Energy and Mining - Indonesia
- Intertek Mineral Services - Indonesia
- Sakthi Sugars Limited - India
- Heidelberg Cement - Germany
- PTC India Limited - India
- Parry Sugars Refinery, India
- Barasentosa Lestari - Indonesia
- London Commodity Brokers - England
- Vedanta Resources Plc - India
- Wilmar Investment Holdings
- Latin American Coal - Colombia
- TNB Fuel Sdn Bhd - Malaysia
- Larsen & Toubro Limited - India
- Mintek Dendrill Indonesia
- Semirara Mining and Power Corporation, Philippines
- Indian Energy Exchange, India
- Standard Chartered Bank - UAE
- Orica Australia Pty. Ltd.
- Eastern Coal Council - USA
- White Energy Company Limited
- Banpu Public Company Limited - Thailand
- Indian Oil Corporation Limited
- PNOC Exploration Corporation - Philippines
- Coalindo Energy - Indonesia
- Ind-Barath Power Infra Limited - India
- Kumho Petrochemical, South Korea
- Globalindo Alam Lestari - Indonesia
- Sindya Power Generating Company Private Ltd
- CIMB Investment Bank - Malaysia
- TeaM Sual Corporation - Philippines
- Dalmia Cement Bharat India
- Offshore Bulk Terminal Pte Ltd, Singapore
- Coal and Oil Company - UAE
- Savvy Resources Ltd - HongKong
- Pipit Mutiara Jaya. PT, Indonesia
- GMR Energy Limited - India
- Power Finance Corporation Ltd., India
- Madhucon Powers Ltd - India
- Mjunction Services Limited - India
- Ministry of Mines - Canada
- Ceylon Electricity Board - Sri Lanka
- Independent Power Producers Association of India
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Maheswari Brothers Coal Limited - India
- Siam City Cement - Thailand
- Indonesian Coal Mining Association
- IEA Clean Coal Centre - UK
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Medco Energi Mining Internasional
- Miang Besar Coal Terminal - Indonesia
- Neyveli Lignite Corporation Ltd, - India
- Star Paper Mills Limited - India
- OPG Power Generation Pvt Ltd - India
- Indo Tambangraya Megah - Indonesia
- VISA Power Limited - India
- Simpson Spence & Young - Indonesia
- Thiess Contractors Indonesia
- Anglo American - United Kingdom
- Toyota Tsusho Corporation, Japan
- SN Aboitiz Power Inc, Philippines
- MS Steel International - UAE
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- The Treasury - Australian Government
- Formosa Plastics Group - Taiwan
- Bukit Asam (Persero) Tbk - Indonesia
- Deloitte Consulting - India
- Kobexindo Tractors - Indoneisa
- Bharathi Cement Corporation - India
- Kepco SPC Power Corporation, Philippines
- South Luzon Thermal Energy Corporation
- Planning Commission, India
- Tamil Nadu electricity Board
- New Zealand Coal & Carbon
- Kartika Selabumi Mining - Indonesia
- GAC Shipping (India) Pvt Ltd
- GN Power Mariveles Coal Plant, Philippines
- Makarim & Taira - Indonesia
- Orica Mining Services - Indonesia
- Manunggal Multi Energi - Indonesia
- Chamber of Mines of South Africa
- Posco Energy - South Korea
- Videocon Industries ltd - India
- Indika Energy - Indonesia
- Riau Bara Harum - Indonesia
- India Bulls Power Limited - India
- Sarangani Energy Corporation, Philippines
- Lanco Infratech Ltd - India
- Bukit Makmur.PT - Indonesia
- European Bulk Services B.V. - Netherlands
- Agrawal Coal Company - India
- Coastal Gujarat Power Limited - India
- Australian Commodity Traders Exchange
- Central Electricity Authority - India
- Salva Resources Pvt Ltd - India
- ASAPP Information Group - India
- Sree Jayajothi Cements Limited - India
- Bukit Baiduri Energy - Indonesia
- Eastern Energy - Thailand
- Jaiprakash Power Ventures ltd
- Straits Asia Resources Limited - Singapore
- Gujarat Electricity Regulatory Commission - India
|
| |
| |
|
