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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, 20 February 20
CHINA RESUMES OVER 70 PCT COAL PRODUCTION CAPACITY AMID EPIDEMIC - XINHUA
China has resumed 70.2 percent of its coal production capacity with output recovering steadily amid the fight against the novel coronavirus epidemi ...
Thursday, 20 February 20
CHINA THERMAL COAL MARKET FACES 2-3 MONTH CORONAVIRUS SHORT SQUEEZE: NOBLE - REUTERS
China’s domestic thermal coal market faces a 2-3 month short squeeze as a rapidly spreading coronavirus outbreak curtails production more tha ...
Wednesday, 19 February 20
KOREA MIDLAND POWER INVITED BIDS FOR 1 MILLION TONS OF HCV AND LCV COAL FOR Q2- Q4 LOADING
COALspot.com: Korea Midland Power Co. Ltd, (KOMIPO). has issued an international tender for total 1 million MT of coal for April to December 2020 l ...
Wednesday, 19 February 20
GLENCORE WRITES OFF ALMOST $1 BILLION AT COLOMBIAN COAL MINES DUE TO FALLING EUROPEAN IMPORTS: BLOOMBERG
The economic case against European coal is proving too much for even Glencore Plc.
The world’s biggest coal shipper cut the va ...
Wednesday, 19 February 20
MINERS WELCOME INDONESIA'S NEW JOBS BILL THAT COULD SPUR COAL GROWTH - REUTERS
Miners have welcomed proposed changes to Indonesian mining rules under a new law aimed at boosting investment, though critics are concerned that th ...
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- Economic Council, Georgia
- Central Electricity Authority - India
- Leighton Contractors Pty Ltd - Australia
- Ind-Barath Power Infra Limited - India
- Meenaskhi Energy Private Limited - India
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Bharathi Cement Corporation - India
- The University of Queensland
- Bayan Resources Tbk. - Indonesia
- Central Java Power - Indonesia
- Kideco Jaya Agung - Indonesia
- Samtan Co., Ltd - South Korea
- TNB Fuel Sdn Bhd - Malaysia
- Oldendorff Carriers - Singapore
- Iligan Light & Power Inc, Philippines
- Eastern Energy - Thailand
- Maharashtra Electricity Regulatory Commission - India
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- PTC India Limited - India
- TeaM Sual Corporation - Philippines
- Ministry of Finance - Indonesia
- Barasentosa Lestari - Indonesia
- CIMB Investment Bank - Malaysia
- International Coal Ventures Pvt Ltd - India
- Karaikal Port Pvt Ltd - India
- Orica Mining Services - Indonesia
- Latin American Coal - Colombia
- Indo Tambangraya Megah - Indonesia
- Planning Commission, India
- Globalindo Alam Lestari - Indonesia
- Agrawal Coal Company - India
- GMR Energy Limited - India
- Power Finance Corporation Ltd., India
- Antam Resourcindo - Indonesia
- White Energy Company Limited
- Energy Link Ltd, New Zealand
- Madhucon Powers Ltd - India
- Banpu Public Company Limited - Thailand
- Africa Commodities Group - South Africa
- Indogreen Group - Indonesia
- Essar Steel Hazira Ltd - India
- Mjunction Services Limited - India
- LBH Netherlands Bv - Netherlands
- Billiton Holdings Pty Ltd - Australia
- Bukit Baiduri Energy - Indonesia
- Offshore Bulk Terminal Pte Ltd, Singapore
- Jaiprakash Power Ventures ltd
- Medco Energi Mining Internasional
- Jorong Barutama Greston.PT - Indonesia
- Tata Chemicals Ltd - India
- SN Aboitiz Power Inc, Philippines
- Ambuja Cements Ltd - India
- Australian Coal Association
- Energy Development Corp, Philippines
- Directorate General of MIneral and Coal - Indonesia
- Rashtriya Ispat Nigam Limited - India
- Deloitte Consulting - India
- Alfred C Toepfer International GmbH - Germany
- Siam City Cement PLC, Thailand
- Aboitiz Power Corporation - Philippines
- Coastal Gujarat Power Limited - India
- Aditya Birla Group - India
- ASAPP Information Group - India
- London Commodity Brokers - England
- Thai Mozambique Logistica
- Kohat Cement Company Ltd. - Pakistan
- Commonwealth Bank - Australia
- Formosa Plastics Group - Taiwan
- Semirara Mining Corp, Philippines
- Vedanta Resources Plc - India
- Bhoruka Overseas - Indonesia
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Metalloyd Limited - United Kingdom
- Eastern Coal Council - USA
- Holcim Trading Pte Ltd - Singapore
- Kumho Petrochemical, South Korea
- The State Trading Corporation of India Ltd
- GVK Power & Infra Limited - India
- Carbofer General Trading SA - India
- New Zealand Coal & Carbon
- Standard Chartered Bank - UAE
- Baramulti Group, Indonesia
- Price Waterhouse Coopers - Russia
- Indonesian Coal Mining Association
- OPG Power Generation Pvt Ltd - India
- AsiaOL BioFuels Corp., Philippines
- Star Paper Mills Limited - India
- Gujarat Sidhee Cement - India
- Wilmar Investment Holdings
- European Bulk Services B.V. - Netherlands
- Edison Trading Spa - Italy
- Global Coal Blending Company Limited - Australia
- Chettinad Cement Corporation Ltd - India
- Georgia Ports Authority, United States
- Toyota Tsusho Corporation, Japan
- Bangladesh Power Developement Board
- Tamil Nadu electricity Board
- Simpson Spence & Young - Indonesia
- India Bulls Power Limited - India
- Neyveli Lignite Corporation Ltd, - India
- Dalmia Cement Bharat India
- Indian Energy Exchange, India
- Directorate Of Revenue Intelligence - India
- McConnell Dowell - Australia
- Lanco Infratech Ltd - India
- Malabar Cements Ltd - India
- Mercator Lines Limited - India
- Petrochimia International Co. Ltd.- Taiwan
- Salva Resources Pvt Ltd - India
- Attock Cement Pakistan Limited
- Wood Mackenzie - Singapore
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Savvy Resources Ltd - HongKong
- Romanian Commodities Exchange
- Cement Manufacturers Association - India
- The Treasury - Australian Government
- Asmin Koalindo Tuhup - Indonesia
- GAC Shipping (India) Pvt Ltd
- Sical Logistics Limited - India
- Renaissance Capital - South Africa
- Pipit Mutiara Jaya. PT, Indonesia
- Thiess Contractors Indonesia
- Altura Mining Limited, Indonesia
- Ministry of Mines - Canada
- Makarim & Taira - Indonesia
- Sree Jayajothi Cements Limited - India
- Xindia Steels Limited - India
- Meralco Power Generation, Philippines
- Kepco SPC Power Corporation, Philippines
- Bank of Tokyo Mitsubishi UFJ Ltd
- MS Steel International - UAE
- Bulk Trading Sa - Switzerland
- VISA Power Limited - India
- Posco Energy - South Korea
- Coal and Oil Company - UAE
- SMG Consultants - Indonesia
- Jindal Steel & Power Ltd - India
- Goldman Sachs - Singapore
- Parliament of New Zealand
- Miang Besar Coal Terminal - Indonesia
- Manunggal Multi Energi - Indonesia
- Mercuria Energy - Indonesia
- Minerals Council of Australia
- ICICI Bank Limited - India
- Karbindo Abesyapradhi - Indoneisa
- Uttam Galva Steels Limited - India
- Bhatia International Limited - India
- Mintek Dendrill Indonesia
- Chamber of Mines of South Africa
- Cigading International Bulk Terminal - Indonesia
- Independent Power Producers Association of India
- Kapuas Tunggal Persada - Indonesia
- CNBM International Corporation - China
- Riau Bara Harum - Indonesia
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Sarangani Energy Corporation, Philippines
- Vijayanagar Sugar Pvt Ltd - India
- Larsen & Toubro Limited - India
- Bhushan Steel Limited - India
- Videocon Industries ltd - India
- Kalimantan Lumbung Energi - Indonesia
- Parry Sugars Refinery, India
- Sakthi Sugars Limited - India
- Therma Luzon, Inc, Philippines
- Bukit Makmur.PT - Indonesia
- Timah Investasi Mineral - Indoneisa
- Anglo American - United Kingdom
- Semirara Mining and Power Corporation, Philippines
- Kaltim Prima Coal - Indonesia
- Global Green Power PLC Corporation, Philippines
- Krishnapatnam Port Company Ltd. - India
- Orica Australia Pty. Ltd.
- Siam City Cement - Thailand
- Sindya Power Generating Company Private Ltd
- Marubeni Corporation - India
- SMC Global Power, Philippines
- San Jose City I Power Corp, Philippines
- Trasteel International SA, Italy
- PetroVietnam Power Coal Import and Supply Company
- PNOC Exploration Corporation - Philippines
- Ministry of Transport, Egypt
- Electricity Generating Authority of Thailand
- Indika Energy - Indonesia
- Pendopo Energi Batubara - Indonesia
- Coalindo Energy - Indonesia
- Kobexindo Tractors - Indoneisa
- IEA Clean Coal Centre - UK
- Maheswari Brothers Coal Limited - India
- Interocean Group of Companies - India
- Gujarat Mineral Development Corp Ltd - India
- Petron Corporation, Philippines
- PowerSource Philippines DevCo
- IHS Mccloskey Coal Group - USA
- Sojitz Corporation - Japan
- Global Business Power Corporation, Philippines
- Bukit Asam (Persero) Tbk - Indonesia
- Straits Asia Resources Limited - Singapore
- Australian Commodity Traders Exchange
- Gujarat Electricity Regulatory Commission - India
- Rio Tinto Coal - Australia
- Borneo Indobara - Indonesia
- Indian Oil Corporation Limited
- Sinarmas Energy and Mining - Indonesia
- Electricity Authority, New Zealand
- Singapore Mercantile Exchange
- Intertek Mineral Services - Indonesia
- Merrill Lynch Commodities Europe
- Binh Thuan Hamico - Vietnam
- Ceylon Electricity Board - Sri Lanka
- GN Power Mariveles Coal Plant, Philippines
- Grasim Industreis Ltd - India
- South Luzon Thermal Energy Corporation
- Port Waratah Coal Services - Australia
- Vizag Seaport Private Limited - India
- Kartika Selabumi Mining - Indonesia
- Heidelberg Cement - Germany
- Bahari Cakrawala Sebuku - Indonesia
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