According to the foreign media Financial Times on April 18, Hin Leong Trading, a subsidiary of Hin Leong Group, Singapore’s largest local crude oil trader, failed to reach an agreement with its creditors on the company’s US$3.85 billion debt. Last Friday, according to Article 2 of the Singapore Companies Act, 211(B) formally filed for bankruptcy protection with the court.
It is reported that Xinglong Group owes a total of US$3.85 billion to 23 banks, of which HSBC has the largest exposure. at US$600 million, followed by ABN Amro at US$300 million and three Singaporean banks, DBS, OCBC Bank and United Overseas Bank, with an exposure of US$680 million.
In addition to Hin Leong Trading, Hin Leong Group also includes Ocean Tankers, one of the world’s largest tanker owners; Ocean Bunkering Services Pte Ltd (OBS) – one of the three largest marine fuel suppliers in Singapore.
Since the late 1980s, Hin Leong Group has been recognized as one of the major oil traders in the international oil trading arena. In addition to the oil giant, the group has also been awarded the Global Trader Program (formerly the Chartered Petroleum Trader) qualification certificate by the International Enterprise Authority of Singapore, and is the only two local companies in the country to hold this qualification.
Lim En Keong, chairman of Singapore Hin Leong Group, is known as the fuel king of Singapore. There is a saying among Asian fuel oil traders that if you want to buy and sell fuel oil in Singapore, if Lim En-keung doesn’t nod “OK”, no matter how much money you have, it will be of no use.
In addition to oil trading, Hin Leong Group has interests in terminal warehousing, fuel oil supply, lubricating oil and grease production, Singapore islandwide transportation services and diesel retail, and maritime logistics support. great power. Group Marine Fuel Supply Co., Ltd. effectively operates 130 large tankers ranging from offshore barges to large tankers with a load capacity of 318,000 tons, ranking 16th among the world’s tanker operators.
However, such a giant oil company encountered an unprecedented plunge in crude oil…
Whenever a certain type of commodity plummets, and large traders or manufacturing companies report bank loan collections, liquidity tightening, company layoffs, etc., the first subconscious reaction of veteran traders is The first question is: How much stock do they still have on hand?
Of course, this is a trade secret. What we can see is that on January 1, 2020, the International Maritime Organization began to implement the sulfur limit order, and the upper limit of sulfur content of global ships will be reduced from the previous 3.5% to 0.5%. In response to this regulation, many mainstream markets are stocking up on low-sulfur fuels and distillates. And all this happened just before the collapse of crude oil…
May is still a testing period for oil prices
With the decline in demand, various institutions have adjusted their crude oil balance sheets to a level rarely seen in history. Let’s take the most typical EIA crude oil balance sheet as an example. The sharp decline in total demand has compressed the coordinate axis of the chart as a whole. The cliff-like drop in demand has made the overall oversupply phenomenon extremely serious.
EIA estimates that the global crude oil surplus will be 9.63 million barrels/day in March, 15.44 million barrels/day in April, and 12.52 million barrels/day in May. On the same day, overall the crude oil market was still facing greater pressure in April and May. At the same time, EIA data shows that global crude oil demand will be at a low point in April, recover in May, and basically recover in June. In the third quarter, the crude oil market will show tight supply and demand due to the dual effects of demand recovery and supply contraction. pattern.
Back to the oil price, the various negative factors have caused the crude oil price to be overwhelmed, but fortunately, the negative factors are more likely to affect the first line contract. The suppressive effect of monthly prices is not obvious. From a demand perspective, the worst-case scenario is already here, and we need to focus on the development of the epidemic and changes in demand in India in the future. On the supply level, regardless of whether it is a voluntary production reduction or an involuntary production reduction, under the current crude oil price level, a decline in crude oil production is inevitable.
Crude oil plummeted, and the pressure on the polyester industry increased
People in the crude oil industry revealed that crude oil will continue to reach new bottoms – will it be bottomless? U.S. crude oil may fall below an unprecedented level, below $10/barrel, and a barrel of oil costs only $10/barrel for 100 liters. What does it mean? A 750ml bottle of Evian drinking water is only US$10! Comparing history, since the financial crisis, WTI and polyester filament prices have experienced two lows. The first was in early 2009, and the second was in early 2016. In early 2016, WTI closed as low as $26/barrel, and polyester filament prices The average transaction price of POY150/48 on that day was 5,900 yuan/ton.
If we refer to the level of oil prices in 2016, the price of polyester filament POY150/48 is likely to break through the 6,000 mark again in the future. In addition, the current situation is different from that in 2016. The industrial chain in 2016 Not all links are in surplus. The PTA/PX/MEG processing gap is still good. For example, the PTA processing fee is still 600-700/ton, and the PX processing gap is still 400 US dollars/ton. At present, polyester raw materials are facing surplus pressure and the processing gap is still good. It is far from what it used to be. In the past,For some time, the processing difference of PTA has been maintained at 300-400 yuan/ton, while the price of PX is only 250 US dollars/ton.
From a cost perspective, polyester filament yarn still has room to fall by 1,000 yuan, but the current polyester filament industry concentration is much higher than in 2016, and leading polyester factories have great bargaining power. The amplitude has increased, so perhaps POY150/48 can be supported at or above 5,500 yuan/ton. But even so, it is a fact that polyester factory inventories have depreciated significantly. </p
