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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
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Wednesday, 12 June 24
CHINA ACCOUNTS FOR 16.3% OF AUSTRALIA'S COAL EXPORTS, FOLLOWED BY INDIA 14.4% - BANCHERO COSTA
Global coal trade has really picked up pace in recent months, and is now fully back to pre-Covid levels says Banchero Costa in its latest report.
...
Wednesday, 12 June 24
LNG NEWBUILDING VALUES AT RECORD HIGH: 78 NEWBUILD ORDERS PLACED IN 2024, DOUBLING 2023 - VESON NAUTICAL
The number of LNG newbuilding orders have more than doubled from the same period last year where 34 orders were placed, compared to 78 in the first ...
Monday, 10 June 24
CHINA'S MAY COAL IMPORTS RISE 11% ON LOWER DOMESTIC OUTPUT - REUTERS
China’s imports of coal rose 11% in May from a year earlier, customs data and Reuters records showed on Friday, as lower domestic output this ...
Tuesday, 04 June 24
HOW DO WESTERN SANCTIONS ON RUSSIA IMPACT THE GLOBAL METALS, MINING AND COAL MARKETS - WOOD MACKENZIE
The geopolitical landscape for Russia, as a major supplier of various commodities, has undergone a dramatic transformation since the invasion of Uk ...
Friday, 22 March 24
CASE STUDY: DANGERS OF COAL CARGO - SKULD
Recently, a bulk cargo vessel carrying coal from South Africa to Singapore suffered a fatal accident, resulting in the deaths of three crew members ...
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Showing 21 to 25 news of total 6871 |
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- Leighton Contractors Pty Ltd - Australia
- Sical Logistics Limited - India
- Bank of Tokyo Mitsubishi UFJ Ltd
- Siam City Cement - Thailand
- The State Trading Corporation of India Ltd
- Bulk Trading Sa - Switzerland
- Sakthi Sugars Limited - India
- Pipit Mutiara Jaya. PT, Indonesia
- Global Coal Blending Company Limited - Australia
- OPG Power Generation Pvt Ltd - India
- Rio Tinto Coal - Australia
- Wood Mackenzie - Singapore
- Kapuas Tunggal Persada - Indonesia
- Heidelberg Cement - Germany
- McConnell Dowell - Australia
- Maheswari Brothers Coal Limited - India
- Thiess Contractors Indonesia
- Manunggal Multi Energi - Indonesia
- Semirara Mining and Power Corporation, Philippines
- Videocon Industries ltd - India
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Central Java Power - Indonesia
- Parry Sugars Refinery, India
- Star Paper Mills Limited - India
- Bangladesh Power Developement Board
- Kumho Petrochemical, South Korea
- IEA Clean Coal Centre - UK
- Madhucon Powers Ltd - India
- Parliament of New Zealand
- Asmin Koalindo Tuhup - Indonesia
- Ministry of Finance - Indonesia
- Interocean Group of Companies - India
- Kartika Selabumi Mining - Indonesia
- Neyveli Lignite Corporation Ltd, - India
- GAC Shipping (India) Pvt Ltd
- Bukit Baiduri Energy - Indonesia
- Krishnapatnam Port Company Ltd. - India
- TNB Fuel Sdn Bhd - Malaysia
- Eastern Coal Council - USA
- VISA Power Limited - India
- Mjunction Services Limited - India
- Therma Luzon, Inc, Philippines
- Salva Resources Pvt Ltd - India
- Agrawal Coal Company - India
- Ministry of Mines - Canada
- Meenaskhi Energy Private Limited - India
- Aboitiz Power Corporation - Philippines
- Energy Link Ltd, New Zealand
- Eastern Energy - Thailand
- Malabar Cements Ltd - India
- Latin American Coal - Colombia
- Attock Cement Pakistan Limited
- European Bulk Services B.V. - Netherlands
- Billiton Holdings Pty Ltd - Australia
- CIMB Investment Bank - Malaysia
- Timah Investasi Mineral - Indoneisa
- Makarim & Taira - Indonesia
- Mercuria Energy - Indonesia
- Binh Thuan Hamico - Vietnam
- Planning Commission, India
- Savvy Resources Ltd - HongKong
- Borneo Indobara - Indonesia
- Tata Chemicals Ltd - India
- South Luzon Thermal Energy Corporation
- Merrill Lynch Commodities Europe
- Bharathi Cement Corporation - India
- Coastal Gujarat Power Limited - India
- Wilmar Investment Holdings
- Deloitte Consulting - India
- Sarangani Energy Corporation, Philippines
- Trasteel International SA, Italy
- PetroVietnam Power Coal Import and Supply Company
- IHS Mccloskey Coal Group - USA
- Singapore Mercantile Exchange
- Chettinad Cement Corporation Ltd - India
- Indika Energy - Indonesia
- Kobexindo Tractors - Indoneisa
- Tamil Nadu electricity Board
- Chamber of Mines of South Africa
- Africa Commodities Group - South Africa
- Ceylon Electricity Board - Sri Lanka
- Directorate General of MIneral and Coal - Indonesia
- Indonesian Coal Mining Association
- San Jose City I Power Corp, Philippines
- Global Green Power PLC Corporation, Philippines
- Commonwealth Bank - Australia
- Sinarmas Energy and Mining - Indonesia
- Essar Steel Hazira Ltd - India
- Pendopo Energi Batubara - Indonesia
- Medco Energi Mining Internasional
- Karbindo Abesyapradhi - Indoneisa
- Port Waratah Coal Services - Australia
- Bahari Cakrawala Sebuku - Indonesia
- Kalimantan Lumbung Energi - Indonesia
- Semirara Mining Corp, Philippines
- Uttam Galva Steels Limited - India
- Global Business Power Corporation, Philippines
- Kaltim Prima Coal - Indonesia
- Directorate Of Revenue Intelligence - India
- Maharashtra Electricity Regulatory Commission - India
- Georgia Ports Authority, United States
- Altura Mining Limited, Indonesia
- Kohat Cement Company Ltd. - Pakistan
- Edison Trading Spa - Italy
- Carbofer General Trading SA - India
- New Zealand Coal & Carbon
- Minerals Council of Australia
- SMC Global Power, Philippines
- Economic Council, Georgia
- Australian Coal Association
- Kideco Jaya Agung - Indonesia
- Coalindo Energy - Indonesia
- Vijayanagar Sugar Pvt Ltd - India
- Siam City Cement PLC, Thailand
- Ind-Barath Power Infra Limited - India
- Ministry of Transport, Egypt
- Bhatia International Limited - India
- The University of Queensland
- Electricity Authority, New Zealand
- ICICI Bank Limited - India
- Goldman Sachs - Singapore
- Central Electricity Authority - India
- Dalmia Cement Bharat India
- Bhushan Steel Limited - India
- AsiaOL BioFuels Corp., Philippines
- Bukit Asam (Persero) Tbk - Indonesia
- Aditya Birla Group - India
- Gujarat Electricity Regulatory Commission - India
- Standard Chartered Bank - UAE
- Sindya Power Generating Company Private Ltd
- Bukit Makmur.PT - Indonesia
- Orica Mining Services - Indonesia
- Jindal Steel & Power Ltd - India
- TeaM Sual Corporation - Philippines
- Baramulti Group, Indonesia
- Alfred C Toepfer International GmbH - Germany
- Straits Asia Resources Limited - Singapore
- PowerSource Philippines DevCo
- Sojitz Corporation - Japan
- Cigading International Bulk Terminal - Indonesia
- Mintek Dendrill Indonesia
- Globalindo Alam Lestari - Indonesia
- Coal and Oil Company - UAE
- Electricity Generating Authority of Thailand
- LBH Netherlands Bv - Netherlands
- Vedanta Resources Plc - India
- Sree Jayajothi Cements Limited - India
- The Treasury - Australian Government
- Karaikal Port Pvt Ltd - India
- CNBM International Corporation - China
- Toyota Tsusho Corporation, Japan
- GVK Power & Infra Limited - India
- Riau Bara Harum - Indonesia
- Indian Energy Exchange, India
- Mercator Lines Limited - India
- PTC India Limited - India
- India Bulls Power Limited - India
- International Coal Ventures Pvt Ltd - India
- Miang Besar Coal Terminal - Indonesia
- ASAPP Information Group - India
- Thai Mozambique Logistica
- Vizag Seaport Private Limited - India
- GN Power Mariveles Coal Plant, Philippines
- Metalloyd Limited - United Kingdom
- Oldendorff Carriers - Singapore
- Jaiprakash Power Ventures ltd
- Romanian Commodities Exchange
- Kepco SPC Power Corporation, Philippines
- Xindia Steels Limited - India
- Anglo American - United Kingdom
- Antam Resourcindo - Indonesia
- Energy Development Corp, Philippines
- Independent Power Producers Association of India
- Ambuja Cements Ltd - India
- GMR Energy Limited - India
- Orica Australia Pty. Ltd.
- MS Steel International - UAE
- Petron Corporation, Philippines
- Offshore Bulk Terminal Pte Ltd, Singapore
- Price Waterhouse Coopers - Russia
- Samtan Co., Ltd - South Korea
- PNOC Exploration Corporation - Philippines
- Indogreen Group - Indonesia
- Iligan Light & Power Inc, Philippines
- Australian Commodity Traders Exchange
- SN Aboitiz Power Inc, Philippines
- Posco Energy - South Korea
- Larsen & Toubro Limited - India
- Lanco Infratech Ltd - India
- Bhoruka Overseas - Indonesia
- Indo Tambangraya Megah - Indonesia
- London Commodity Brokers - England
- Power Finance Corporation Ltd., India
- Formosa Plastics Group - Taiwan
- Banpu Public Company Limited - Thailand
- Cement Manufacturers Association - India
- Jorong Barutama Greston.PT - Indonesia
- Renaissance Capital - South Africa
- Petrochimia International Co. Ltd.- Taiwan
- Holcim Trading Pte Ltd - Singapore
- Barasentosa Lestari - Indonesia
- Meralco Power Generation, Philippines
- Marubeni Corporation - India
- SMG Consultants - Indonesia
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- White Energy Company Limited
- Grasim Industreis Ltd - India
- Bayan Resources Tbk. - Indonesia
- Gujarat Sidhee Cement - India
- Gujarat Mineral Development Corp Ltd - India
- Indian Oil Corporation Limited
- Intertek Mineral Services - Indonesia
- Simpson Spence & Young - Indonesia
- Rashtriya Ispat Nigam Limited - India
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