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Friday, 20 March 20
VOLATILITY TO INCREASE IN TANKER MARKET FOLLOWING OIL PRICE WAR - DREWRY
Crude oil prices plunged by more than a third in the past week after OPEC+ failed to agree on production cut as demand softened in the aftermath of coronavirus (COVID-19). In its recent report, the IEA estimates global oil demand at 99.9 mbpd in 2020, which is around 90,000 bpd lower than in 2019 and a sharp downgrade from the agency’s forecast in February, which predicted global oil demand will grow 825,000 bpd in 2020.
The market expected OPEC+ to cut supply as the COVID-19 epidemic has spread from China to Europe, the Americas and Middle East. However, the negotiations failed due to strong resistance from Russia, which is of the view that the policy of capping production by OPEC+ producers to support the oil price is facilitating the development of US shale oil, with Russia losing its market share to increasing exports from the US.
After the failure of production cut talks in Vienna, Saudi Arabia started a price war by slashing the official selling prices for crude for key buyers in the international market and hinted at raising crude oil production to full capacity of 12.3 mbpd from April 2020. The ‘shock and awe’ tactics of Saudi Arabia could be a move to impose maximum pain in the quickest possible way to Russia and other producers, in an effort to renegotiate the proposed production cut and then quickly reverse the production surge and thereafter implement the production cut if a deal is reached.
However, the recent move by Saudi Arabia could lead to:
a) Renegotiation on a production cut between OPEC and Russia
b) Prolonged price war between OPEC, Russia and US producers
If there are fresh negotiations to implement a production cut by OPEC+ producers to accommodate the effect of declining oil demand, crude oil prices are expected to normalise.
But if there is a prolonged price war between Saudi Arabia, Russia and US shale oil producers, lower crude oil prices will lead to some improvement in global oil demand and refinery runs. At the same time, onshore stocking activity will also increase, especially in countries such as China as they build their Strategic Petroleum Reserve. A global supply glut is also likely to lead to an increase in floating storage especially among oil producers.
At the same time, sustained weakness in oil prices will eventually hurt US shale oil producers because of their relatively higher cost of production. In such circumstances, the market share of Middle Eastern crude will increase at the expense of US crude.
Meanwhile, tanker rates surged due to a sudden increase in VLCC chartering from Bahri, Saudi Arabia’s national shipping arm. Bahri fixed at least 18 VLCCs since the Kingdom aims to pump more crude into the market as its price war with Russia escalates. The VLCC earnings on Middle East–China (TD3C) route skyrocketed to $166,000pd on 11 March from $30,300pd on 06 March.
If Saudi Arabia manages to strike a deal with Russia to cut production in the short term, tanker rates will plummet to the pre-price war levels because of the ongoing weakness in crude oil trade on account of the spread of COVID-19 globally. On the other hand, if there is a prolonged price war, tonnage demand will rise initially with the increase in oil demand and stocking activity, which in turn will keep freight rates above pre-price war levels.
However, once sustained weakness in oil prices starts hurting US crude production, Middle Eastern crude will start displacing US crude in Asia. This in turn will squeeze tonne-mile demand for tankers as the distance between the US to Asia is almost double the distance between the Middle East to Asia. Thus we estimate that every barrel per day of annual decline in US exports to Asia at the expense of the Middle East will lead to about a 2.5% decline in overall tonne-mile demand for tankers. Freight rates in such a situation will plunge below the pre-price war levels.
Source: Drewry
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Thursday, 04 June 20
CHINA'S BENCHMARK POWER COAL PRICE EDGES UP - XINHUA
China’s benchmark power coal price rose slightly during the past week.
The Bohai-Rim Steam-Coal Price Index (BSPI), a gauge of ...
Thursday, 04 June 20
DON'T FORGET THE REAL PURPOSE OF RISK ASSESSMENTS - GARD
KNOWLEDGE TO ELEVATE
When doing a risk assessment, we often overcomplicate it and forget its real purpose.
Rather than ensuring that crew ...
Wednesday, 03 June 20
MARKET INSIGHT - INTERMODAL
Once again shipping is about to venture into uncharted waters and before the challenges of the past decade are forgotten, shipowners will have to o ...
Tuesday, 02 June 20
KOSPO LOOKING FOR 80000 MT OF 4200 NCV COAL FOR JULY
COALspot.com: Korea Southern Power Co., Ltd. (KOSPO) has issued an International tender for 80,000 Metric Tons (MT) 4200 NCV coal for 12 - 21, July ...
Tuesday, 02 June 20
INDONESIAN COAL MINER BUMI RESOURCES Q1 OUTPUT UP 5% - REUTERS
Indonesia’s largest coal miner Bumi Resources posted a 5% increase in first-quarter output at 20.8 million tonnes, the company said in a stat ...
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- San Jose City I Power Corp, Philippines
- Lanco Infratech Ltd - India
- Therma Luzon, Inc, Philippines
- Australian Commodity Traders Exchange
- South Luzon Thermal Energy Corporation
- Bhushan Steel Limited - India
- Salva Resources Pvt Ltd - India
- Trasteel International SA, Italy
- Kaltim Prima Coal - Indonesia
- Bulk Trading Sa - Switzerland
- Holcim Trading Pte Ltd - Singapore
- CIMB Investment Bank - Malaysia
- Indo Tambangraya Megah - Indonesia
- Chamber of Mines of South Africa
- GVK Power & Infra Limited - India
- New Zealand Coal & Carbon
- Electricity Authority, New Zealand
- Borneo Indobara - Indonesia
- Sakthi Sugars Limited - India
- Maheswari Brothers Coal Limited - India
- Ceylon Electricity Board - Sri Lanka
- Mjunction Services Limited - India
- Antam Resourcindo - Indonesia
- Neyveli Lignite Corporation Ltd, - India
- Simpson Spence & Young - Indonesia
- Indian Oil Corporation Limited
- Eastern Coal Council - USA
- Central Java Power - Indonesia
- Energy Development Corp, Philippines
- Ind-Barath Power Infra Limited - India
- Deloitte Consulting - India
- Sical Logistics Limited - India
- Pendopo Energi Batubara - Indonesia
- Sarangani Energy Corporation, Philippines
- Asmin Koalindo Tuhup - Indonesia
- Krishnapatnam Port Company Ltd. - India
- SMG Consultants - Indonesia
- Toyota Tsusho Corporation, Japan
- Straits Asia Resources Limited - Singapore
- Thiess Contractors Indonesia
- Billiton Holdings Pty Ltd - Australia
- Xindia Steels Limited - India
- Essar Steel Hazira Ltd - India
- Ambuja Cements Ltd - India
- Orica Mining Services - Indonesia
- Bhatia International Limited - India
- Semirara Mining Corp, Philippines
- White Energy Company Limited
- SN Aboitiz Power Inc, Philippines
- Parry Sugars Refinery, India
- PTC India Limited - India
- Australian Coal Association
- Central Electricity Authority - India
- Thai Mozambique Logistica
- Kalimantan Lumbung Energi - Indonesia
- Vijayanagar Sugar Pvt Ltd - India
- Kideco Jaya Agung - Indonesia
- GMR Energy Limited - India
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- MS Steel International - UAE
- Carbofer General Trading SA - India
- Edison Trading Spa - Italy
- Dalmia Cement Bharat India
- Africa Commodities Group - South Africa
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- TNB Fuel Sdn Bhd - Malaysia
- Bahari Cakrawala Sebuku - Indonesia
- AsiaOL BioFuels Corp., Philippines
- Kapuas Tunggal Persada - Indonesia
- Posco Energy - South Korea
- Indogreen Group - Indonesia
- Formosa Plastics Group - Taiwan
- Mercuria Energy - Indonesia
- Electricity Generating Authority of Thailand
- Mintek Dendrill Indonesia
- ICICI Bank Limited - India
- Asia Pacific Energy Resources Ventures Inc, Philippines
- GAC Shipping (India) Pvt Ltd
- Samtan Co., Ltd - South Korea
- Cigading International Bulk Terminal - Indonesia
- Goldman Sachs - Singapore
- OPG Power Generation Pvt Ltd - India
- Indian Energy Exchange, India
- Malabar Cements Ltd - India
- Baramulti Group, Indonesia
- Tamil Nadu electricity Board
- LBH Netherlands Bv - Netherlands
- Meralco Power Generation, Philippines
- Coalindo Energy - Indonesia
- Aboitiz Power Corporation - Philippines
- Intertek Mineral Services - Indonesia
- Kobexindo Tractors - Indoneisa
- Jindal Steel & Power Ltd - India
- Kartika Selabumi Mining - Indonesia
- Georgia Ports Authority, United States
- Alfred C Toepfer International GmbH - Germany
- Standard Chartered Bank - UAE
- Larsen & Toubro Limited - India
- Cement Manufacturers Association - India
- Maharashtra Electricity Regulatory Commission - India
- Economic Council, Georgia
- Altura Mining Limited, Indonesia
- Madhucon Powers Ltd - India
- Medco Energi Mining Internasional
- Karaikal Port Pvt Ltd - India
- Meenaskhi Energy Private Limited - India
- Banpu Public Company Limited - Thailand
- Star Paper Mills Limited - India
- Siam City Cement - Thailand
- Eastern Energy - Thailand
- Heidelberg Cement - Germany
- Manunggal Multi Energi - Indonesia
- Offshore Bulk Terminal Pte Ltd, Singapore
- Videocon Industries ltd - India
- The University of Queensland
- Bukit Makmur.PT - Indonesia
- Aditya Birla Group - India
- Grasim Industreis Ltd - India
- SMC Global Power, Philippines
- Sindya Power Generating Company Private Ltd
- Interocean Group of Companies - India
- Binh Thuan Hamico - Vietnam
- Bukit Asam (Persero) Tbk - Indonesia
- International Coal Ventures Pvt Ltd - India
- Ministry of Transport, Egypt
- Latin American Coal - Colombia
- Marubeni Corporation - India
- Gujarat Electricity Regulatory Commission - India
- Timah Investasi Mineral - Indoneisa
- ASAPP Information Group - India
- Leighton Contractors Pty Ltd - Australia
- Karbindo Abesyapradhi - Indoneisa
- Chettinad Cement Corporation Ltd - India
- Directorate General of MIneral and Coal - Indonesia
- Vedanta Resources Plc - India
- Semirara Mining and Power Corporation, Philippines
- Sojitz Corporation - Japan
- Anglo American - United Kingdom
- IHS Mccloskey Coal Group - USA
- CNBM International Corporation - China
- Price Waterhouse Coopers - Russia
- Globalindo Alam Lestari - Indonesia
- Global Business Power Corporation, Philippines
- Singapore Mercantile Exchange
- Ministry of Mines - Canada
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- European Bulk Services B.V. - Netherlands
- Gujarat Mineral Development Corp Ltd - India
- Coal and Oil Company - UAE
- Oldendorff Carriers - Singapore
- Barasentosa Lestari - Indonesia
- Gujarat Sidhee Cement - India
- Independent Power Producers Association of India
- Indika Energy - Indonesia
- Siam City Cement PLC, Thailand
- Tata Chemicals Ltd - India
- Sinarmas Energy and Mining - Indonesia
- Riau Bara Harum - Indonesia
- London Commodity Brokers - England
- Ministry of Finance - Indonesia
- Planning Commission, India
- Jaiprakash Power Ventures ltd
- Jorong Barutama Greston.PT - Indonesia
- Global Coal Blending Company Limited - Australia
- Bhoruka Overseas - Indonesia
- PNOC Exploration Corporation - Philippines
- Romanian Commodities Exchange
- Merrill Lynch Commodities Europe
- Rio Tinto Coal - Australia
- Wood Mackenzie - Singapore
- Miang Besar Coal Terminal - Indonesia
- McConnell Dowell - Australia
- Kohat Cement Company Ltd. - Pakistan
- The State Trading Corporation of India Ltd
- Bharathi Cement Corporation - India
- PetroVietnam Power Coal Import and Supply Company
- Agrawal Coal Company - India
- Coastal Gujarat Power Limited - India
- India Bulls Power Limited - India
- Minerals Council of Australia
- PowerSource Philippines DevCo
- Uttam Galva Steels Limited - India
- Bangladesh Power Developement Board
- Power Finance Corporation Ltd., India
- Wilmar Investment Holdings
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Petron Corporation, Philippines
- Bayan Resources Tbk. - Indonesia
- Iligan Light & Power Inc, Philippines
- Vizag Seaport Private Limited - India
- Savvy Resources Ltd - HongKong
- Directorate Of Revenue Intelligence - India
- Sree Jayajothi Cements Limited - India
- Orica Australia Pty. Ltd.
- Global Green Power PLC Corporation, Philippines
- VISA Power Limited - India
- Attock Cement Pakistan Limited
- Bank of Tokyo Mitsubishi UFJ Ltd
- Kepco SPC Power Corporation, Philippines
- Kumho Petrochemical, South Korea
- The Treasury - Australian Government
- Commonwealth Bank - Australia
- Indonesian Coal Mining Association
- Parliament of New Zealand
- Metalloyd Limited - United Kingdom
- Pipit Mutiara Jaya. PT, Indonesia
- Makarim & Taira - Indonesia
- Petrochimia International Co. Ltd.- Taiwan
- Rashtriya Ispat Nigam Limited - India
- Bukit Baiduri Energy - Indonesia
- Renaissance Capital - South Africa
- TeaM Sual Corporation - Philippines
- Mercator Lines Limited - India
- Energy Link Ltd, New Zealand
- IEA Clean Coal Centre - UK
- Port Waratah Coal Services - Australia
- GN Power Mariveles Coal Plant, Philippines
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