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.
|
|
Thursday, 30 January 20
CAPE: WITH CHINESE NEW YEAR TAKING PLACE, THE RATES ARE REACHING FURTHER DISAPPOINTING LEVELS - FEARNLEYS
Cape
With Chinese New Year taking place, the rates are reaching further disappointing levels. Present TC average is below USD 4,500, off 24% fr ...
Wednesday, 29 January 20
INDONESIA REMAINS AT THE TOP SPOT IN 2019 AS THE LARGEST SUPPLIER OF COAL TO INDIA WITH 91.3 MLN TONNES - BANCHERO COSTA
Despite repeated promises from India’s government to reduce the country’s coal imports and increase domestic self-reliance, volumes jus ...
Wednesday, 29 January 20
MARKET INSIGHT - INTERMODAL
Last week Libya’s oil production operations were disrupted as it was reported that local Libyan tribes interrupted output at the the El Feel ...
Tuesday, 28 January 20
INDONESIA - UNCERTAINTY OVER AVAILABILITY OF LSFO - THE STANDARD CLUB
The club has received reports that low sulphur fuel is not currently readily available in all Indonesian ports and that there are local shortages.
...
Sunday, 26 January 20
SUPRAMAX: THE ASIAN BASIN SAW A 56,000DWT SHIP FIXING DELIVERY SAMARINDA TRIP TO WEST COAST INDIA AT $4,750 - BALTIC BRIEFING
Capesize
The market endured heavy losses throughout the past week, with the Capesize 5TC dropping from $8,352 to $4,772. In the lead up to Chin ...
|
|
|
Showing 1166 to 1170 news of total 6871 |
|
 |
|
|
|
|
| |
|
 |
|
|
| |
|
- Manunggal Multi Energi - Indonesia
- Wilmar Investment Holdings
- Sakthi Sugars Limited - India
- Billiton Holdings Pty Ltd - Australia
- Power Finance Corporation Ltd., India
- Heidelberg Cement - Germany
- Ind-Barath Power Infra Limited - India
- Vizag Seaport Private Limited - India
- Indian Energy Exchange, India
- Coastal Gujarat Power Limited - India
- Binh Thuan Hamico - Vietnam
- SMG Consultants - Indonesia
- Cement Manufacturers Association - India
- Rashtriya Ispat Nigam Limited - India
- The Treasury - Australian Government
- Goldman Sachs - Singapore
- Australian Commodity Traders Exchange
- Semirara Mining and Power Corporation, Philippines
- Sarangani Energy Corporation, Philippines
- Maheswari Brothers Coal Limited - India
- Thiess Contractors Indonesia
- Ambuja Cements Ltd - India
- Bukit Asam (Persero) Tbk - Indonesia
- Electricity Authority, New Zealand
- ICICI Bank Limited - India
- Grasim Industreis Ltd - India
- Commonwealth Bank - Australia
- Bukit Makmur.PT - Indonesia
- GAC Shipping (India) Pvt Ltd
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Karaikal Port Pvt Ltd - India
- Directorate Of Revenue Intelligence - India
- Pipit Mutiara Jaya. PT, Indonesia
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Karbindo Abesyapradhi - Indoneisa
- Bhatia International Limited - India
- Essar Steel Hazira Ltd - India
- Central Java Power - Indonesia
- Marubeni Corporation - India
- Agrawal Coal Company - India
- Vedanta Resources Plc - India
- Eastern Energy - Thailand
- Trasteel International SA, Italy
- Simpson Spence & Young - Indonesia
- Thai Mozambique Logistica
- Coalindo Energy - Indonesia
- Electricity Generating Authority of Thailand
- Asmin Koalindo Tuhup - Indonesia
- Jorong Barutama Greston.PT - Indonesia
- Videocon Industries ltd - India
- SMC Global Power, Philippines
- Malabar Cements Ltd - India
- Toyota Tsusho Corporation, Japan
- Rio Tinto Coal - Australia
- Global Green Power PLC Corporation, Philippines
- Borneo Indobara - Indonesia
- Bhushan Steel Limited - India
- Africa Commodities Group - South Africa
- Global Business Power Corporation, Philippines
- The University of Queensland
- Indian Oil Corporation Limited
- London Commodity Brokers - England
- Orica Australia Pty. Ltd.
- GN Power Mariveles Coal Plant, Philippines
- Energy Development Corp, Philippines
- Offshore Bulk Terminal Pte Ltd, Singapore
- Straits Asia Resources Limited - Singapore
- Carbofer General Trading SA - India
- Ceylon Electricity Board - Sri Lanka
- Therma Luzon, Inc, Philippines
- Mercator Lines Limited - India
- Parliament of New Zealand
- Maharashtra Electricity Regulatory Commission - India
- Gujarat Mineral Development Corp Ltd - India
- McConnell Dowell - Australia
- PetroVietnam Power Coal Import and Supply Company
- Larsen & Toubro Limited - India
- Meenaskhi Energy Private Limited - India
- Kartika Selabumi Mining - Indonesia
- Krishnapatnam Port Company Ltd. - India
- Sojitz Corporation - Japan
- Interocean Group of Companies - India
- Antam Resourcindo - Indonesia
- Medco Energi Mining Internasional
- Salva Resources Pvt Ltd - India
- Alfred C Toepfer International GmbH - Germany
- Australian Coal Association
- Kohat Cement Company Ltd. - Pakistan
- Samtan Co., Ltd - South Korea
- IEA Clean Coal Centre - UK
- Xindia Steels Limited - India
- Central Electricity Authority - India
- IHS Mccloskey Coal Group - USA
- Bayan Resources Tbk. - Indonesia
- PTC India Limited - India
- Banpu Public Company Limited - Thailand
- Kepco SPC Power Corporation, Philippines
- Indogreen Group - Indonesia
- Siam City Cement - Thailand
- Kumho Petrochemical, South Korea
- Lanco Infratech Ltd - India
- Gujarat Electricity Regulatory Commission - India
- Iligan Light & Power Inc, Philippines
- Formosa Plastics Group - Taiwan
- GVK Power & Infra Limited - India
- GMR Energy Limited - India
- Georgia Ports Authority, United States
- Eastern Coal Council - USA
- Tamil Nadu electricity Board
- Bahari Cakrawala Sebuku - Indonesia
- Kobexindo Tractors - Indoneisa
- Mjunction Services Limited - India
- New Zealand Coal & Carbon
- Mercuria Energy - Indonesia
- Sindya Power Generating Company Private Ltd
- LBH Netherlands Bv - Netherlands
- The State Trading Corporation of India Ltd
- Attock Cement Pakistan Limited
- ASAPP Information Group - India
- South Luzon Thermal Energy Corporation
- PNOC Exploration Corporation - Philippines
- CIMB Investment Bank - Malaysia
- TeaM Sual Corporation - Philippines
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Gujarat Sidhee Cement - India
- Leighton Contractors Pty Ltd - Australia
- Renaissance Capital - South Africa
- Singapore Mercantile Exchange
- Bukit Baiduri Energy - Indonesia
- Edison Trading Spa - Italy
- Ministry of Mines - Canada
- Riau Bara Harum - Indonesia
- Timah Investasi Mineral - Indoneisa
- Pendopo Energi Batubara - Indonesia
- Bharathi Cement Corporation - India
- Indonesian Coal Mining Association
- Oldendorff Carriers - Singapore
- Savvy Resources Ltd - HongKong
- Kideco Jaya Agung - Indonesia
- Indo Tambangraya Megah - Indonesia
- OPG Power Generation Pvt Ltd - India
- Star Paper Mills Limited - India
- Sinarmas Energy and Mining - Indonesia
- Aboitiz Power Corporation - Philippines
- Meralco Power Generation, Philippines
- Deloitte Consulting - India
- Neyveli Lignite Corporation Ltd, - India
- Merrill Lynch Commodities Europe
- European Bulk Services B.V. - Netherlands
- Bangladesh Power Developement Board
- Latin American Coal - Colombia
- Economic Council, Georgia
- Kaltim Prima Coal - Indonesia
- India Bulls Power Limited - India
- Sical Logistics Limited - India
- Jaiprakash Power Ventures ltd
- Vijayanagar Sugar Pvt Ltd - India
- Petrochimia International Co. Ltd.- Taiwan
- Intertek Mineral Services - Indonesia
- Posco Energy - South Korea
- VISA Power Limited - India
- Barasentosa Lestari - Indonesia
- Global Coal Blending Company Limited - Australia
- Planning Commission, India
- Baramulti Group, Indonesia
- Aditya Birla Group - India
- Miang Besar Coal Terminal - Indonesia
- Sree Jayajothi Cements Limited - India
- Directorate General of MIneral and Coal - Indonesia
- Cigading International Bulk Terminal - Indonesia
- Chettinad Cement Corporation Ltd - India
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Energy Link Ltd, New Zealand
- Petron Corporation, Philippines
- MS Steel International - UAE
- Bulk Trading Sa - Switzerland
- PowerSource Philippines DevCo
- Altura Mining Limited, Indonesia
- Price Waterhouse Coopers - Russia
- Ministry of Transport, Egypt
- Kapuas Tunggal Persada - Indonesia
- Semirara Mining Corp, Philippines
- Indika Energy - Indonesia
- Romanian Commodities Exchange
- AsiaOL BioFuels Corp., Philippines
- San Jose City I Power Corp, Philippines
- Parry Sugars Refinery, India
- White Energy Company Limited
- Holcim Trading Pte Ltd - Singapore
- International Coal Ventures Pvt Ltd - India
- Makarim & Taira - Indonesia
- Coal and Oil Company - UAE
- CNBM International Corporation - China
- Bank of Tokyo Mitsubishi UFJ Ltd
- Independent Power Producers Association of India
- Kalimantan Lumbung Energi - Indonesia
- Metalloyd Limited - United Kingdom
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Port Waratah Coal Services - Australia
- Dalmia Cement Bharat India
- Globalindo Alam Lestari - Indonesia
- Uttam Galva Steels Limited - India
- Tata Chemicals Ltd - India
- Madhucon Powers Ltd - India
- Jindal Steel & Power Ltd - India
- Chamber of Mines of South Africa
- Siam City Cement PLC, Thailand
- TNB Fuel Sdn Bhd - Malaysia
- Orica Mining Services - Indonesia
- Anglo American - United Kingdom
- SN Aboitiz Power Inc, Philippines
- Bhoruka Overseas - Indonesia
- Standard Chartered Bank - UAE
- Mintek Dendrill Indonesia
- Ministry of Finance - Indonesia
- Wood Mackenzie - Singapore
- Minerals Council of Australia
|
| |
| |
|
