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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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Friday, 07 February 20
CIL LOOKING TO TAP NON-POWER SECTORS FOR INCREMENTAL COAL, PTI REPORTED
The miner is looking to ramp up production to meet its targets for the current fiscal at a time when the economic slowdown is impacting demand for ...
Friday, 07 February 20
VIRUS - HIT CHINA MAY NEED MORE IMPORTS OF COAL. NOW COMES THE TRICKY PART - SHIPPING IT THERE: REUTERS
China’s domestic coal mines are struggling to ramp up production in the face of the ongoing coronavirus epidemic. That’s a situation th ...
Friday, 07 February 20
CORONAVIRUS IMPACTING THE GLOBAL SHIPPING INDUSTRY - BIMCO
The outbreak of the novel Coronavirus has dented market sentiment and spooked markets around the globe. When China sneezes, we all catch the flu. T ...
Thursday, 06 February 20
CAPE: WEAK SUPPLY/DEMAND RATIO THE STREETS REMAIN BLOODY FOR THE BIG SHIPS - FEARNLEYS
Cape: With still a weak supply/demand ratio the streets remain bloody for the big ships, and actual spot earnings are close to zero on main short-h ...
Thursday, 06 February 20
CHINESE DEMAND KEY UNCERTAINTY FOR SEABORNE COAL MARKET IN 2020 - THE BRICS POST
Coal trader Noble Resources head of research Rodrigo Echeverri Cardozo had penciled in a 3 Mt drop in Chinese import demand for 2020, but it could ...
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- Directorate Of Revenue Intelligence - India
- Madhucon Powers Ltd - India
- Indo Tambangraya Megah - Indonesia
- Merrill Lynch Commodities Europe
- Larsen & Toubro Limited - India
- Chamber of Mines of South Africa
- Medco Energi Mining Internasional
- Lanco Infratech Ltd - India
- India Bulls Power Limited - India
- PTC India Limited - India
- Ministry of Transport, Egypt
- Toyota Tsusho Corporation, Japan
- Africa Commodities Group - South Africa
- Sinarmas Energy and Mining - Indonesia
- Jindal Steel & Power Ltd - India
- Makarim & Taira - Indonesia
- Mercuria Energy - Indonesia
- Krishnapatnam Port Company Ltd. - India
- Maharashtra Electricity Regulatory Commission - India
- GAC Shipping (India) Pvt Ltd
- Kumho Petrochemical, South Korea
- Anglo American - United Kingdom
- Bhatia International Limited - India
- SMC Global Power, Philippines
- Global Coal Blending Company Limited - Australia
- Kartika Selabumi Mining - Indonesia
- Electricity Generating Authority of Thailand
- Interocean Group of Companies - India
- White Energy Company Limited
- European Bulk Services B.V. - Netherlands
- Bukit Baiduri Energy - Indonesia
- Asmin Koalindo Tuhup - Indonesia
- PetroVietnam Power Coal Import and Supply Company
- Energy Development Corp, Philippines
- Latin American Coal - Colombia
- Dalmia Cement Bharat India
- Iligan Light & Power Inc, Philippines
- Cigading International Bulk Terminal - Indonesia
- Uttam Galva Steels Limited - India
- Bayan Resources Tbk. - Indonesia
- Eastern Coal Council - USA
- Barasentosa Lestari - Indonesia
- Indika Energy - Indonesia
- Wood Mackenzie - Singapore
- IEA Clean Coal Centre - UK
- Coastal Gujarat Power Limited - India
- Altura Mining Limited, Indonesia
- Posco Energy - South Korea
- Global Green Power PLC Corporation, Philippines
- Petron Corporation, Philippines
- Karbindo Abesyapradhi - Indoneisa
- Gujarat Mineral Development Corp Ltd - India
- Bukit Makmur.PT - Indonesia
- VISA Power Limited - India
- ASAPP Information Group - India
- Banpu Public Company Limited - Thailand
- Pendopo Energi Batubara - Indonesia
- Wilmar Investment Holdings
- Offshore Bulk Terminal Pte Ltd, Singapore
- Commonwealth Bank - Australia
- Cement Manufacturers Association - India
- Pipit Mutiara Jaya. PT, Indonesia
- GN Power Mariveles Coal Plant, Philippines
- Vijayanagar Sugar Pvt Ltd - India
- MS Steel International - UAE
- PowerSource Philippines DevCo
- Heidelberg Cement - Germany
- Kideco Jaya Agung - Indonesia
- Mintek Dendrill Indonesia
- San Jose City I Power Corp, Philippines
- Mjunction Services Limited - India
- Bahari Cakrawala Sebuku - Indonesia
- Karaikal Port Pvt Ltd - India
- Baramulti Group, Indonesia
- Gujarat Electricity Regulatory Commission - India
- London Commodity Brokers - England
- Straits Asia Resources Limited - Singapore
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Georgia Ports Authority, United States
- Kepco SPC Power Corporation, Philippines
- Kalimantan Lumbung Energi - Indonesia
- Attock Cement Pakistan Limited
- Bukit Asam (Persero) Tbk - Indonesia
- Salva Resources Pvt Ltd - India
- Price Waterhouse Coopers - Russia
- Vedanta Resources Plc - India
- Romanian Commodities Exchange
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Grasim Industreis Ltd - India
- GVK Power & Infra Limited - India
- Sarangani Energy Corporation, Philippines
- Riau Bara Harum - Indonesia
- Aditya Birla Group - India
- Tata Chemicals Ltd - India
- Rio Tinto Coal - Australia
- Xindia Steels Limited - India
- Mercator Lines Limited - India
- Planning Commission, India
- Formosa Plastics Group - Taiwan
- Bhoruka Overseas - Indonesia
- Sree Jayajothi Cements Limited - India
- Parry Sugars Refinery, India
- Edison Trading Spa - Italy
- Orica Mining Services - Indonesia
- Neyveli Lignite Corporation Ltd, - India
- The State Trading Corporation of India Ltd
- Sical Logistics Limited - India
- Bulk Trading Sa - Switzerland
- Jaiprakash Power Ventures ltd
- Malabar Cements Ltd - India
- Videocon Industries ltd - India
- Siam City Cement - Thailand
- Australian Commodity Traders Exchange
- Power Finance Corporation Ltd., India
- Kapuas Tunggal Persada - Indonesia
- New Zealand Coal & Carbon
- Central Electricity Authority - India
- Orica Australia Pty. Ltd.
- Semirara Mining and Power Corporation, Philippines
- Ceylon Electricity Board - Sri Lanka
- Aboitiz Power Corporation - Philippines
- Meralco Power Generation, Philippines
- Trasteel International SA, Italy
- Australian Coal Association
- Globalindo Alam Lestari - Indonesia
- Sakthi Sugars Limited - India
- Antam Resourcindo - Indonesia
- SN Aboitiz Power Inc, Philippines
- Energy Link Ltd, New Zealand
- Ind-Barath Power Infra Limited - India
- Meenaskhi Energy Private Limited - India
- Goldman Sachs - Singapore
- PNOC Exploration Corporation - Philippines
- Metalloyd Limited - United Kingdom
- Thai Mozambique Logistica
- SMG Consultants - Indonesia
- Intertek Mineral Services - Indonesia
- IHS Mccloskey Coal Group - USA
- Port Waratah Coal Services - Australia
- Indian Oil Corporation Limited
- Central Java Power - Indonesia
- Indian Energy Exchange, India
- Chettinad Cement Corporation Ltd - India
- OPG Power Generation Pvt Ltd - India
- Indonesian Coal Mining Association
- Siam City Cement PLC, Thailand
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Singapore Mercantile Exchange
- Kaltim Prima Coal - Indonesia
- Petrochimia International Co. Ltd.- Taiwan
- Vizag Seaport Private Limited - India
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Coalindo Energy - Indonesia
- Sojitz Corporation - Japan
- AsiaOL BioFuels Corp., Philippines
- Manunggal Multi Energi - Indonesia
- Essar Steel Hazira Ltd - India
- Parliament of New Zealand
- Kohat Cement Company Ltd. - Pakistan
- Billiton Holdings Pty Ltd - Australia
- Independent Power Producers Association of India
- Directorate General of MIneral and Coal - Indonesia
- Deloitte Consulting - India
- Borneo Indobara - Indonesia
- International Coal Ventures Pvt Ltd - India
- CNBM International Corporation - China
- Simpson Spence & Young - Indonesia
- Marubeni Corporation - India
- TeaM Sual Corporation - Philippines
- Sindya Power Generating Company Private Ltd
- Kobexindo Tractors - Indoneisa
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Ministry of Mines - Canada
- Ambuja Cements Ltd - India
- Tamil Nadu electricity Board
- CIMB Investment Bank - Malaysia
- TNB Fuel Sdn Bhd - Malaysia
- Global Business Power Corporation, Philippines
- Standard Chartered Bank - UAE
- Thiess Contractors Indonesia
- Savvy Resources Ltd - HongKong
- Leighton Contractors Pty Ltd - Australia
- Alfred C Toepfer International GmbH - Germany
- South Luzon Thermal Energy Corporation
- Samtan Co., Ltd - South Korea
- Timah Investasi Mineral - Indoneisa
- Renaissance Capital - South Africa
- Therma Luzon, Inc, Philippines
- Holcim Trading Pte Ltd - Singapore
- Miang Besar Coal Terminal - Indonesia
- ICICI Bank Limited - India
- Binh Thuan Hamico - Vietnam
- Indogreen Group - Indonesia
- Minerals Council of Australia
- Ministry of Finance - Indonesia
- Rashtriya Ispat Nigam Limited - India
- GMR Energy Limited - India
- Economic Council, Georgia
- Bhushan Steel Limited - India
- Bank of Tokyo Mitsubishi UFJ Ltd
- Maheswari Brothers Coal Limited - India
- McConnell Dowell - Australia
- Gujarat Sidhee Cement - India
- The Treasury - Australian Government
- Carbofer General Trading SA - India
- Bangladesh Power Developement Board
- Electricity Authority, New Zealand
- Oldendorff Carriers - Singapore
- Star Paper Mills Limited - India
- The University of Queensland
- LBH Netherlands Bv - Netherlands
- Coal and Oil Company - UAE
- Jorong Barutama Greston.PT - Indonesia
- Agrawal Coal Company - India
- Semirara Mining Corp, Philippines
- Eastern Energy - Thailand
- Bharathi Cement Corporation - India
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