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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, 24 March 20
THE TRIPLE SHOCK OF CORONAVIRUS IN SHIPPING: WILL IT LAST? - DREWRY
Transport capacity shortages, disruptions to supply chains and inability to plan since late January have been a dangerous combination. But will all ...
Tuesday, 24 March 20
CHINA TAIYUAN COAL TRANSACTION PRICE INDEX DOWN 0.28 PCT - XINHUA
China Taiyuan coal transaction price index stood at 132.74 points Monday, down 0.28 percent week on week.
The index, released by Chi ...
Monday, 23 March 20
CHARTERPARTY REQUIREMENTS TO NOTIFY CLAIMS - TAKE CARE! - WFW
KNOWLEDGE TO ELEVATE
Voyage charterparties frequently require the owner to notify any claim with supporting documents within a relatively shor ...
Monday, 23 March 20
COAL INDIA LIMITED'S ONE-DAY OUTPUT PEAKS AT 3.17 MT - THE HINDU
Coal India Limited (CIL) output peaked at a new high of 3.17 million tonnes (MT) on March 20, overtaking the 3.14 MT production recorded on March 2 ...
Monday, 23 March 20
KOMIPO INVITED BIDS FOR 1.45 MILLION TONS OF COAL FOR JUNE & JULY 2020 LOADING
COALspot.com: Korea Midland Power Co.,Ltd (KOMIPO), on behalf of five Korean Gencos, has issued an international tender for total 1,450,000 MT (&pl ...
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- Gujarat Mineral Development Corp Ltd - India
- Alfred C Toepfer International GmbH - Germany
- Anglo American - United Kingdom
- Kepco SPC Power Corporation, Philippines
- Port Waratah Coal Services - Australia
- Electricity Generating Authority of Thailand
- Standard Chartered Bank - UAE
- International Coal Ventures Pvt Ltd - India
- Chettinad Cement Corporation Ltd - India
- Kartika Selabumi Mining - Indonesia
- Indonesian Coal Mining Association
- GVK Power & Infra Limited - India
- Directorate General of MIneral and Coal - Indonesia
- Jorong Barutama Greston.PT - Indonesia
- MS Steel International - UAE
- Binh Thuan Hamico - Vietnam
- Pipit Mutiara Jaya. PT, Indonesia
- Straits Asia Resources Limited - Singapore
- Deloitte Consulting - India
- ICICI Bank Limited - India
- New Zealand Coal & Carbon
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Georgia Ports Authority, United States
- Essar Steel Hazira Ltd - India
- Bukit Makmur.PT - Indonesia
- Indika Energy - Indonesia
- Thiess Contractors Indonesia
- Bulk Trading Sa - Switzerland
- IHS Mccloskey Coal Group - USA
- Bhatia International Limited - India
- Heidelberg Cement - Germany
- Global Green Power PLC Corporation, Philippines
- Australian Coal Association
- Kohat Cement Company Ltd. - Pakistan
- Commonwealth Bank - Australia
- Bukit Asam (Persero) Tbk - Indonesia
- Pendopo Energi Batubara - Indonesia
- Jaiprakash Power Ventures ltd
- Savvy Resources Ltd - HongKong
- Sojitz Corporation - Japan
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Global Coal Blending Company Limited - Australia
- Lanco Infratech Ltd - India
- Dalmia Cement Bharat India
- PNOC Exploration Corporation - Philippines
- Manunggal Multi Energi - Indonesia
- PTC India Limited - India
- PowerSource Philippines DevCo
- Renaissance Capital - South Africa
- Baramulti Group, Indonesia
- Uttam Galva Steels Limited - India
- Antam Resourcindo - Indonesia
- Central Java Power - Indonesia
- Vizag Seaport Private Limited - India
- Cigading International Bulk Terminal - Indonesia
- Formosa Plastics Group - Taiwan
- Directorate Of Revenue Intelligence - India
- Coastal Gujarat Power Limited - India
- Merrill Lynch Commodities Europe
- Asmin Koalindo Tuhup - Indonesia
- Power Finance Corporation Ltd., India
- SMG Consultants - Indonesia
- CIMB Investment Bank - Malaysia
- Eastern Energy - Thailand
- Globalindo Alam Lestari - Indonesia
- Goldman Sachs - Singapore
- Meenaskhi Energy Private Limited - India
- Semirara Mining and Power Corporation, Philippines
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- TNB Fuel Sdn Bhd - Malaysia
- Leighton Contractors Pty Ltd - Australia
- Chamber of Mines of South Africa
- Vedanta Resources Plc - India
- Ind-Barath Power Infra Limited - India
- White Energy Company Limited
- Bhoruka Overseas - Indonesia
- CNBM International Corporation - China
- Salva Resources Pvt Ltd - India
- Carbofer General Trading SA - India
- Petron Corporation, Philippines
- Maheswari Brothers Coal Limited - India
- Parry Sugars Refinery, India
- Gujarat Electricity Regulatory Commission - India
- Meralco Power Generation, Philippines
- SMC Global Power, Philippines
- Trasteel International SA, Italy
- Maharashtra Electricity Regulatory Commission - India
- Kaltim Prima Coal - Indonesia
- European Bulk Services B.V. - Netherlands
- Australian Commodity Traders Exchange
- Kobexindo Tractors - Indoneisa
- Wood Mackenzie - Singapore
- Neyveli Lignite Corporation Ltd, - India
- Price Waterhouse Coopers - Russia
- Bank of Tokyo Mitsubishi UFJ Ltd
- Electricity Authority, New Zealand
- Ministry of Transport, Egypt
- Miang Besar Coal Terminal - Indonesia
- Samtan Co., Ltd - South Korea
- South Luzon Thermal Energy Corporation
- India Bulls Power Limited - India
- Barasentosa Lestari - Indonesia
- Economic Council, Georgia
- Eastern Coal Council - USA
- GAC Shipping (India) Pvt Ltd
- SN Aboitiz Power Inc, Philippines
- Bhushan Steel Limited - India
- Sical Logistics Limited - India
- Independent Power Producers Association of India
- Toyota Tsusho Corporation, Japan
- Karaikal Port Pvt Ltd - India
- Petrochimia International Co. Ltd.- Taiwan
- Mintek Dendrill Indonesia
- Energy Development Corp, Philippines
- Singapore Mercantile Exchange
- Medco Energi Mining Internasional
- AsiaOL BioFuels Corp., Philippines
- Marubeni Corporation - India
- Kapuas Tunggal Persada - Indonesia
- Sinarmas Energy and Mining - Indonesia
- Agrawal Coal Company - India
- The State Trading Corporation of India Ltd
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Romanian Commodities Exchange
- Indo Tambangraya Megah - Indonesia
- Ministry of Mines - Canada
- Vijayanagar Sugar Pvt Ltd - India
- Malabar Cements Ltd - India
- Bangladesh Power Developement Board
- PetroVietnam Power Coal Import and Supply Company
- Planning Commission, India
- Gujarat Sidhee Cement - India
- Africa Commodities Group - South Africa
- Star Paper Mills Limited - India
- Bahari Cakrawala Sebuku - Indonesia
- Wilmar Investment Holdings
- Jindal Steel & Power Ltd - India
- Central Electricity Authority - India
- Mercuria Energy - Indonesia
- Indian Energy Exchange, India
- Mercator Lines Limited - India
- Billiton Holdings Pty Ltd - Australia
- Altura Mining Limited, Indonesia
- Larsen & Toubro Limited - India
- LBH Netherlands Bv - Netherlands
- The University of Queensland
- Borneo Indobara - Indonesia
- IEA Clean Coal Centre - UK
- Tata Chemicals Ltd - India
- Holcim Trading Pte Ltd - Singapore
- Kumho Petrochemical, South Korea
- Interocean Group of Companies - India
- Global Business Power Corporation, Philippines
- Sindya Power Generating Company Private Ltd
- Indogreen Group - Indonesia
- OPG Power Generation Pvt Ltd - India
- Rio Tinto Coal - Australia
- The Treasury - Australian Government
- Bukit Baiduri Energy - Indonesia
- Thai Mozambique Logistica
- Iligan Light & Power Inc, Philippines
- Timah Investasi Mineral - Indoneisa
- Mjunction Services Limited - India
- Posco Energy - South Korea
- Bharathi Cement Corporation - India
- Kideco Jaya Agung - Indonesia
- Makarim & Taira - Indonesia
- Orica Australia Pty. Ltd.
- London Commodity Brokers - England
- Xindia Steels Limited - India
- Minerals Council of Australia
- Metalloyd Limited - United Kingdom
- Tamil Nadu electricity Board
- GMR Energy Limited - India
- Simpson Spence & Young - Indonesia
- Grasim Industreis Ltd - India
- Therma Luzon, Inc, Philippines
- ASAPP Information Group - India
- Semirara Mining Corp, Philippines
- Madhucon Powers Ltd - India
- Krishnapatnam Port Company Ltd. - India
- Siam City Cement PLC, Thailand
- VISA Power Limited - India
- Ministry of Finance - Indonesia
- Parliament of New Zealand
- Sree Jayajothi Cements Limited - India
- Attock Cement Pakistan Limited
- Indian Oil Corporation Limited
- Aditya Birla Group - India
- Offshore Bulk Terminal Pte Ltd, Singapore
- Kalimantan Lumbung Energi - Indonesia
- Sakthi Sugars Limited - India
- GN Power Mariveles Coal Plant, Philippines
- Bayan Resources Tbk. - Indonesia
- Energy Link Ltd, New Zealand
- Intertek Mineral Services - Indonesia
- Banpu Public Company Limited - Thailand
- Riau Bara Harum - Indonesia
- Latin American Coal - Colombia
- Rashtriya Ispat Nigam Limited - India
- Aboitiz Power Corporation - Philippines
- San Jose City I Power Corp, Philippines
- Orica Mining Services - Indonesia
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Cement Manufacturers Association - India
- Oldendorff Carriers - Singapore
- Karbindo Abesyapradhi - Indoneisa
- Coalindo Energy - Indonesia
- Coal and Oil Company - UAE
- Siam City Cement - Thailand
- TeaM Sual Corporation - Philippines
- Ceylon Electricity Board - Sri Lanka
- Sarangani Energy Corporation, Philippines
- Ambuja Cements Ltd - India
- Edison Trading Spa - Italy
- McConnell Dowell - Australia
- Videocon Industries ltd - India
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