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.
|
|
Monday, 24 June 24
PHILIPPINES COAL SUPPLY ENOUGH UNTIL 2030 - PHILSTAR GLOBAL
The country’s existing coal-fired power plants are sufficient to ensure enough base load capacity in the next six years, Energy Secretary Rap ...
Friday, 14 June 24
NEXTDECADE, SAUDI ARAMCO SIGN 20-YEAR LNG SUPPLY DEAL - REUTERS
U.S. liquefied natural gas (LNG) provider NextDecade has signed a non-binding agreement with Saudi Aramco 2222.SE to supply 1.2 million tonnes per ...
Friday, 14 June 24
NEWBUILDING PRICES CLIMB 3% TO HIGHEST LEVEL IN 16 YEARS - NIELS RASMUSSEN
“Since the start of the year, newbuilding prices have risen 3% to their highest level since 2008. Compared to their most recent low in late 2 ...
Friday, 14 June 24
INDIA TARGETS HIGHER DOMESTIC COAL PRODUCTION, REDUCED IMPORTS: GOVT - REUTERS
India wants to reduce coal imports and increase domestic production, federal coal minister G. Kishan Reddy said on Thursday.
The cou ...
Thursday, 13 June 24
US LNG TO ASIA FOR POWER GENERATION EXPECTED TO CUT EMISSIONS VERSUS COAL - RYSTAD ENERGY
The value-chain emissions of liquified natural gas (LNG) are lower on average than for coal-fired power generation, even when the fuel is shipp ...
|
|
|
Showing 16 to 20 news of total 6871 |
|
 |
|
|
|
|
| |
|
 |
|
|
| |
|
- Cement Manufacturers Association - India
- Africa Commodities Group - South Africa
- Salva Resources Pvt Ltd - India
- Tata Chemicals Ltd - India
- Sindya Power Generating Company Private Ltd
- Ministry of Mines - Canada
- Bukit Asam (Persero) Tbk - Indonesia
- Simpson Spence & Young - Indonesia
- VISA Power Limited - India
- Madhucon Powers Ltd - India
- Pendopo Energi Batubara - Indonesia
- SN Aboitiz Power Inc, Philippines
- New Zealand Coal & Carbon
- Oldendorff Carriers - Singapore
- Singapore Mercantile Exchange
- Ministry of Finance - Indonesia
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- GAC Shipping (India) Pvt Ltd
- Neyveli Lignite Corporation Ltd, - India
- Karbindo Abesyapradhi - Indoneisa
- Iligan Light & Power Inc, Philippines
- Bulk Trading Sa - Switzerland
- Deloitte Consulting - India
- Barasentosa Lestari - Indonesia
- Central Java Power - Indonesia
- Parliament of New Zealand
- GVK Power & Infra Limited - India
- Central Electricity Authority - India
- Tamil Nadu electricity Board
- Binh Thuan Hamico - Vietnam
- SMG Consultants - Indonesia
- Electricity Generating Authority of Thailand
- Meralco Power Generation, Philippines
- Indian Oil Corporation Limited
- Bayan Resources Tbk. - Indonesia
- ICICI Bank Limited - India
- Mjunction Services Limited - India
- London Commodity Brokers - England
- Siam City Cement - Thailand
- Wood Mackenzie - Singapore
- Kalimantan Lumbung Energi - Indonesia
- Bangladesh Power Developement Board
- Xindia Steels Limited - India
- Port Waratah Coal Services - Australia
- Bukit Makmur.PT - Indonesia
- OPG Power Generation Pvt Ltd - India
- PowerSource Philippines DevCo
- Goldman Sachs - Singapore
- AsiaOL BioFuels Corp., Philippines
- Global Green Power PLC Corporation, Philippines
- Thiess Contractors Indonesia
- Standard Chartered Bank - UAE
- PetroVietnam Power Coal Import and Supply Company
- Straits Asia Resources Limited - Singapore
- Bukit Baiduri Energy - Indonesia
- Kideco Jaya Agung - Indonesia
- Bank of Tokyo Mitsubishi UFJ Ltd
- Energy Link Ltd, New Zealand
- Pipit Mutiara Jaya. PT, Indonesia
- Altura Mining Limited, Indonesia
- The University of Queensland
- Kobexindo Tractors - Indoneisa
- Bharathi Cement Corporation - India
- Uttam Galva Steels Limited - India
- Krishnapatnam Port Company Ltd. - India
- Coal and Oil Company - UAE
- LBH Netherlands Bv - Netherlands
- Kohat Cement Company Ltd. - Pakistan
- Heidelberg Cement - Germany
- IHS Mccloskey Coal Group - USA
- International Coal Ventures Pvt Ltd - India
- Coalindo Energy - Indonesia
- Holcim Trading Pte Ltd - Singapore
- Edison Trading Spa - Italy
- Latin American Coal - Colombia
- Ceylon Electricity Board - Sri Lanka
- Medco Energi Mining Internasional
- Commonwealth Bank - Australia
- Parry Sugars Refinery, India
- Larsen & Toubro Limited - India
- Rashtriya Ispat Nigam Limited - India
- Mintek Dendrill Indonesia
- Intertek Mineral Services - Indonesia
- Georgia Ports Authority, United States
- Agrawal Coal Company - India
- Attock Cement Pakistan Limited
- Bahari Cakrawala Sebuku - Indonesia
- Mercator Lines Limited - India
- Leighton Contractors Pty Ltd - Australia
- Indian Energy Exchange, India
- Bhushan Steel Limited - India
- Indogreen Group - Indonesia
- Merrill Lynch Commodities Europe
- Timah Investasi Mineral - Indoneisa
- Banpu Public Company Limited - Thailand
- Miang Besar Coal Terminal - Indonesia
- Indo Tambangraya Megah - Indonesia
- Vedanta Resources Plc - India
- Grasim Industreis Ltd - India
- MS Steel International - UAE
- Wilmar Investment Holdings
- Jaiprakash Power Ventures ltd
- Videocon Industries ltd - India
- Bhatia International Limited - India
- Maharashtra Electricity Regulatory Commission - India
- European Bulk Services B.V. - Netherlands
- Thai Mozambique Logistica
- Australian Commodity Traders Exchange
- Sojitz Corporation - Japan
- Lanco Infratech Ltd - India
- Alfred C Toepfer International GmbH - Germany
- The State Trading Corporation of India Ltd
- San Jose City I Power Corp, Philippines
- Aditya Birla Group - India
- Toyota Tsusho Corporation, Japan
- Kepco SPC Power Corporation, Philippines
- Orica Mining Services - Indonesia
- Karaikal Port Pvt Ltd - India
- Formosa Plastics Group - Taiwan
- Bhoruka Overseas - Indonesia
- Star Paper Mills Limited - India
- Interocean Group of Companies - India
- Sinarmas Energy and Mining - Indonesia
- Coastal Gujarat Power Limited - India
- Offshore Bulk Terminal Pte Ltd, Singapore
- Power Finance Corporation Ltd., India
- Makarim & Taira - Indonesia
- Minerals Council of Australia
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Sakthi Sugars Limited - India
- CIMB Investment Bank - Malaysia
- Borneo Indobara - Indonesia
- Kumho Petrochemical, South Korea
- Manunggal Multi Energi - Indonesia
- South Luzon Thermal Energy Corporation
- The Treasury - Australian Government
- PNOC Exploration Corporation - Philippines
- TNB Fuel Sdn Bhd - Malaysia
- Kaltim Prima Coal - Indonesia
- SMC Global Power, Philippines
- Chamber of Mines of South Africa
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Jindal Steel & Power Ltd - India
- Sical Logistics Limited - India
- Economic Council, Georgia
- Kartika Selabumi Mining - Indonesia
- Orica Australia Pty. Ltd.
- White Energy Company Limited
- Anglo American - United Kingdom
- Malabar Cements Ltd - India
- Directorate Of Revenue Intelligence - India
- Vizag Seaport Private Limited - India
- Carbofer General Trading SA - India
- GMR Energy Limited - India
- Global Coal Blending Company Limited - Australia
- Billiton Holdings Pty Ltd - Australia
- Globalindo Alam Lestari - Indonesia
- Rio Tinto Coal - Australia
- Sarangani Energy Corporation, Philippines
- PTC India Limited - India
- Dalmia Cement Bharat India
- Therma Luzon, Inc, Philippines
- Chettinad Cement Corporation Ltd - India
- Petron Corporation, Philippines
- Petrochimia International Co. Ltd.- Taiwan
- Maheswari Brothers Coal Limited - India
- Directorate General of MIneral and Coal - Indonesia
- McConnell Dowell - Australia
- IEA Clean Coal Centre - UK
- Marubeni Corporation - India
- Samtan Co., Ltd - South Korea
- Antam Resourcindo - Indonesia
- TeaM Sual Corporation - Philippines
- Asmin Koalindo Tuhup - Indonesia
- Global Business Power Corporation, Philippines
- Electricity Authority, New Zealand
- Eastern Coal Council - USA
- Semirara Mining Corp, Philippines
- Siam City Cement PLC, Thailand
- Price Waterhouse Coopers - Russia
- GN Power Mariveles Coal Plant, Philippines
- Gujarat Mineral Development Corp Ltd - India
- Gujarat Sidhee Cement - India
- Independent Power Producers Association of India
- Indika Energy - Indonesia
- Jorong Barutama Greston.PT - Indonesia
- Australian Coal Association
- Semirara Mining and Power Corporation, Philippines
- Meenaskhi Energy Private Limited - India
- Indonesian Coal Mining Association
- Riau Bara Harum - Indonesia
- Sree Jayajothi Cements Limited - India
- Baramulti Group, Indonesia
- ASAPP Information Group - India
- Kapuas Tunggal Persada - Indonesia
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Renaissance Capital - South Africa
- Aboitiz Power Corporation - Philippines
- Mercuria Energy - Indonesia
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Planning Commission, India
- Ambuja Cements Ltd - India
- Gujarat Electricity Regulatory Commission - India
- Energy Development Corp, Philippines
- Metalloyd Limited - United Kingdom
- Romanian Commodities Exchange
- CNBM International Corporation - China
- Ministry of Transport, Egypt
- India Bulls Power Limited - India
- Savvy Resources Ltd - HongKong
- Vijayanagar Sugar Pvt Ltd - India
- Posco Energy - South Korea
- Eastern Energy - Thailand
- Cigading International Bulk Terminal - Indonesia
- Ind-Barath Power Infra Limited - India
- Essar Steel Hazira Ltd - India
- Trasteel International SA, Italy
|
| |
| |
|
