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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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Tuesday, 02 June 20
CHINA TAIYUAN COAL TRANSACTION PRICE INDEX DOWN 0.86 PCT - XINHUA
China Taiyuan coal transaction price index stood at 123.95 points Monday, down 0.86 percent week on week.
The index, released by Chi ...
Monday, 01 June 20
SUPRAMAX: IN SOUTH EAST ASIA RATES TRADED SIDEWAYS - BALTIC BRIEFING
Capesize
A sober end to the week, with the market seemingly ready for the weekend. After a steady week of rate declines a small flurry of Atlan ...
Friday, 29 May 20
COVID-19: COAL SUPPLY BY CIL TO POWER SECTOR DIPS 22% TO 32 MT IN APRIL DUE TO DEMAND SLUMP - PTI
Over 95% of CIL’s production comes from its 171 open cast mines.
The supply of coal to the power sector by state-owned Coal In ...
Friday, 29 May 20
AUSTRALIA'S NEW HOPE WARNS OF HIT FROM COAL PRICE SLUMP - REUTERS
Australia’s New Hope Corp Ltd said on Thursday that a sudden drop in thermal coal prices and lower output from its Queensland operations woul ...
Friday, 29 May 20
GOVT MAY LAUNCH COAL BLOCKS AUCTION PROCESS UNDER COMMERCIAL MINING ON JUN 11 - PTI
The Centre is likely to launch the process of coal blocks auction under commercial mining on June 11 and around 50 mines are expected to go under t ...
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- Bank of Tokyo Mitsubishi UFJ Ltd
- Bulk Trading Sa - Switzerland
- Energy Development Corp, Philippines
- Malabar Cements Ltd - India
- Global Business Power Corporation, Philippines
- Coastal Gujarat Power Limited - India
- Holcim Trading Pte Ltd - Singapore
- Kepco SPC Power Corporation, Philippines
- Mintek Dendrill Indonesia
- Edison Trading Spa - Italy
- Ministry of Mines - Canada
- Uttam Galva Steels Limited - India
- Pendopo Energi Batubara - Indonesia
- ASAPP Information Group - India
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Mercator Lines Limited - India
- Africa Commodities Group - South Africa
- Vijayanagar Sugar Pvt Ltd - India
- Bukit Asam (Persero) Tbk - Indonesia
- Bukit Makmur.PT - Indonesia
- VISA Power Limited - India
- Latin American Coal - Colombia
- Tata Chemicals Ltd - India
- The State Trading Corporation of India Ltd
- Cement Manufacturers Association - India
- Goldman Sachs - Singapore
- Kartika Selabumi Mining - Indonesia
- Meralco Power Generation, Philippines
- Central Java Power - Indonesia
- Gujarat Mineral Development Corp Ltd - India
- Global Green Power PLC Corporation, Philippines
- Indian Oil Corporation Limited
- Orica Mining Services - Indonesia
- Ministry of Transport, Egypt
- McConnell Dowell - Australia
- Parliament of New Zealand
- Sree Jayajothi Cements Limited - India
- Kalimantan Lumbung Energi - Indonesia
- Billiton Holdings Pty Ltd - Australia
- Energy Link Ltd, New Zealand
- Siam City Cement - Thailand
- Asmin Koalindo Tuhup - Indonesia
- Binh Thuan Hamico - Vietnam
- Indo Tambangraya Megah - Indonesia
- Cigading International Bulk Terminal - Indonesia
- Sical Logistics Limited - India
- Ministry of Finance - Indonesia
- Antam Resourcindo - Indonesia
- Semirara Mining and Power Corporation, Philippines
- TeaM Sual Corporation - Philippines
- Parry Sugars Refinery, India
- Jorong Barutama Greston.PT - Indonesia
- Thai Mozambique Logistica
- White Energy Company Limited
- Standard Chartered Bank - UAE
- Carbofer General Trading SA - India
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Coal and Oil Company - UAE
- Renaissance Capital - South Africa
- Neyveli Lignite Corporation Ltd, - India
- Ambuja Cements Ltd - India
- Indian Energy Exchange, India
- Riau Bara Harum - Indonesia
- Bukit Baiduri Energy - Indonesia
- Krishnapatnam Port Company Ltd. - India
- Interocean Group of Companies - India
- Coalindo Energy - Indonesia
- GMR Energy Limited - India
- Intertek Mineral Services - Indonesia
- Electricity Generating Authority of Thailand
- Maharashtra Electricity Regulatory Commission - India
- GN Power Mariveles Coal Plant, Philippines
- Sakthi Sugars Limited - India
- Singapore Mercantile Exchange
- Maheswari Brothers Coal Limited - India
- Independent Power Producers Association of India
- Straits Asia Resources Limited - Singapore
- Grasim Industreis Ltd - India
- Directorate General of MIneral and Coal - Indonesia
- MS Steel International - UAE
- Asia Pacific Energy Resources Ventures Inc, Philippines
- PowerSource Philippines DevCo
- Wilmar Investment Holdings
- Dalmia Cement Bharat India
- Semirara Mining Corp, Philippines
- PNOC Exploration Corporation - Philippines
- Larsen & Toubro Limited - India
- Indika Energy - Indonesia
- Videocon Industries ltd - India
- Anglo American - United Kingdom
- Formosa Plastics Group - Taiwan
- Rashtriya Ispat Nigam Limited - India
- SMC Global Power, Philippines
- Power Finance Corporation Ltd., India
- Merrill Lynch Commodities Europe
- New Zealand Coal & Carbon
- Toyota Tsusho Corporation, Japan
- Sarangani Energy Corporation, Philippines
- Star Paper Mills Limited - India
- Meenaskhi Energy Private Limited - India
- Mjunction Services Limited - India
- Bharathi Cement Corporation - India
- Iligan Light & Power Inc, Philippines
- Bhoruka Overseas - Indonesia
- Kobexindo Tractors - Indoneisa
- Minerals Council of Australia
- AsiaOL BioFuels Corp., Philippines
- Orica Australia Pty. Ltd.
- Offshore Bulk Terminal Pte Ltd, Singapore
- Vizag Seaport Private Limited - India
- Xindia Steels Limited - India
- Simpson Spence & Young - Indonesia
- Wood Mackenzie - Singapore
- Romanian Commodities Exchange
- Central Electricity Authority - India
- Sinarmas Energy and Mining - Indonesia
- Directorate Of Revenue Intelligence - India
- Sindya Power Generating Company Private Ltd
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Pipit Mutiara Jaya. PT, Indonesia
- Aboitiz Power Corporation - Philippines
- Oldendorff Carriers - Singapore
- Alfred C Toepfer International GmbH - Germany
- CIMB Investment Bank - Malaysia
- Gujarat Electricity Regulatory Commission - India
- Timah Investasi Mineral - Indoneisa
- Bhushan Steel Limited - India
- GAC Shipping (India) Pvt Ltd
- Essar Steel Hazira Ltd - India
- Trasteel International SA, Italy
- Rio Tinto Coal - Australia
- Bhatia International Limited - India
- India Bulls Power Limited - India
- TNB Fuel Sdn Bhd - Malaysia
- Marubeni Corporation - India
- IEA Clean Coal Centre - UK
- Indogreen Group - Indonesia
- LBH Netherlands Bv - Netherlands
- Indonesian Coal Mining Association
- SN Aboitiz Power Inc, Philippines
- GVK Power & Infra Limited - India
- Ind-Barath Power Infra Limited - India
- OPG Power Generation Pvt Ltd - India
- Eastern Energy - Thailand
- Therma Luzon, Inc, Philippines
- Chamber of Mines of South Africa
- SMG Consultants - Indonesia
- Makarim & Taira - Indonesia
- Economic Council, Georgia
- Port Waratah Coal Services - Australia
- Sojitz Corporation - Japan
- Baramulti Group, Indonesia
- Savvy Resources Ltd - HongKong
- Eastern Coal Council - USA
- Petron Corporation, Philippines
- Electricity Authority, New Zealand
- Kohat Cement Company Ltd. - Pakistan
- Tamil Nadu electricity Board
- Barasentosa Lestari - Indonesia
- Altura Mining Limited, Indonesia
- Metalloyd Limited - United Kingdom
- Manunggal Multi Energi - Indonesia
- Planning Commission, India
- Bayan Resources Tbk. - Indonesia
- Miang Besar Coal Terminal - Indonesia
- Deloitte Consulting - India
- Jaiprakash Power Ventures ltd
- Leighton Contractors Pty Ltd - Australia
- Mercuria Energy - Indonesia
- Lanco Infratech Ltd - India
- Ceylon Electricity Board - Sri Lanka
- Global Coal Blending Company Limited - Australia
- Madhucon Powers Ltd - India
- CNBM International Corporation - China
- Kideco Jaya Agung - Indonesia
- Samtan Co., Ltd - South Korea
- Borneo Indobara - Indonesia
- Karbindo Abesyapradhi - Indoneisa
- The Treasury - Australian Government
- IHS Mccloskey Coal Group - USA
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Kumho Petrochemical, South Korea
- The University of Queensland
- Siam City Cement PLC, Thailand
- Gujarat Sidhee Cement - India
- Australian Coal Association
- South Luzon Thermal Energy Corporation
- PTC India Limited - India
- Chettinad Cement Corporation Ltd - India
- Aditya Birla Group - India
- Posco Energy - South Korea
- Petrochimia International Co. Ltd.- Taiwan
- Salva Resources Pvt Ltd - India
- Globalindo Alam Lestari - Indonesia
- Heidelberg Cement - Germany
- Kaltim Prima Coal - Indonesia
- Bangladesh Power Developement Board
- Banpu Public Company Limited - Thailand
- PetroVietnam Power Coal Import and Supply Company
- Georgia Ports Authority, United States
- Attock Cement Pakistan Limited
- Karaikal Port Pvt Ltd - India
- Vedanta Resources Plc - India
- Medco Energi Mining Internasional
- Agrawal Coal Company - India
- ICICI Bank Limited - India
- Kapuas Tunggal Persada - Indonesia
- International Coal Ventures Pvt Ltd - India
- Price Waterhouse Coopers - Russia
- Australian Commodity Traders Exchange
- San Jose City I Power Corp, Philippines
- Bahari Cakrawala Sebuku - Indonesia
- European Bulk Services B.V. - Netherlands
- London Commodity Brokers - England
- Thiess Contractors Indonesia
- Commonwealth Bank - Australia
- Jindal Steel & Power Ltd - India
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