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Wednesday, 07 January 15
FUEL EFFICIENT SHIPS MAKE LESS SENSE IN LOWER BUNKER PRICE MARKET, BUT FUEL COSTS ARE BOUND TO RISE AGAIN
 The shipping industry entered 2015 on mixed emotions, as a relatively buoyant tanker market is met by a rather lackluster dry bulk market. Still, all ship owners will undoubtedly be happy about the fact that the most important cost driving factor, bunker prices, are way down since the same period of last year. In fact, bunker prices are down by more than 30% since last year, as already, by the end of November of 2014, the cost of Heavy Fuel Oil (HFO) in Fujairah had declined to $460 per metric ton from an average of $609/mt over the first six months of 2014. That’s already a reduction of 24% and more has come since then, on the back of constantly declining crude prices.
Given the fact that bunker prices is the biggest factor in a ship’s operating costs, that kind of reduction is rather significant and one which can offset any loss in terms of freight rates. Thus, ship owners can take advantage of this low cost environment and increase their earnings, through the subsequent fall of OPEX. On the other hand, other factor like the new fuel efficient vessels, or slow steaming are coming into play.
According to a recent report from Poten & Partners, “due to the high oil prices over the last couple of years and the anticipation of continuing high prices in the future, owners have made operational adjustments by utilizing slow steaming on the ballast leg of a voyage, while shipyards and engine manufacturers have worked hard to improve the fuel efficiency of new ships. Using a VLCC as the basis for such analysis as the longer voyages benefit relatively more from fuel efficiency, we use a 2007 built VLCC ordered when HFO prices were around $160/MT and a modern 2013 built VLCC. Vessels can vary significantly in their fuel consumption, both through design and over time, dependent on the condition of the hull paint, etc. The modern vessel in our example saves 7 tons/day in laden condition compared to the older design and 4 tons/day while in ballast. For the comparison we will use the typical VLCC round trip voyage from Ras Tanura to Chiba using the current fuel price ($460/MT) and the average price during the first 6 months of 2014 ($609/MT). On the round trip, the fuel efficient vessel saves $116,200 in fuel with current prices and $151,500 in the higher price environment compared to the 2007 built vessel. This represents savings of $2,179/day in time charter equivalent (TCE) at current bunker prices and $2,839 at 2014H1 bunker prices”.
Poten added that “in order to improve TCE, owners have made operational adjustments by slow steaming during the ballast leg of the voyages, and during the laden leg where it was permitted in the charter party. This helps the owners by improving the economics on individual voyages as the fuel cost savings more than offset the longer steaming time when the market is low. An added benefit is that slow steaming reduces the efficiency or the fleet as more vessels are needed to move the same volume of cargo. Earlier in the year, when the rates were lower, slow steaming made more sense as the additional revenue that could be earned during the additional 3.9 ballasting days was lower than the fuel savings. At current market rates and lower bunker prices, this situation has shifted. At least for the vessel and voyage combination in our example, increasing the ballast speed could prove to be beneficial. The situation could be different for other vessels and voyages, but it makes the case for owners to run the numbers. The benefits of fuel efficient designs might have been reduced for now but the investment is for 20+ years and fuel prices are likely to increase again in the future”, the analyst concluded.
Source: Nikos Roussanoglou, Hellenic Shipping News
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Friday, 30 January 15
U.S. YEAR-TO-DATE COAL PRODUCTION REACHED 65.7 MMST
COALspot.com – United States the world's one of the largest coal producers, produced approximately 19.9 million short tons (mmst) of coal ...
Friday, 30 January 15
CAN BULKER CONVERSIONS SPOIL THE TANKER MARKET'S PARTY? - NIKOS ROUSSANOGLOU, HELLENIC SHIPPING NEWS
Oversupply of tonnage has always been in the back of the head of ship owners when it comes to taking advantage of favorable market conditions. As s ...
Thursday, 29 January 15
CHINA ENERGY DEMAND MUST BE REVIEWED DUE TO FUNDAMENTAL ECONOMIC CHANGES - WOOD MACKENZIE
New patterns emerging as energy demand growth decoupled significantly from GDP growth for the first time in 2014
Wood Mackenzie says 2014 was ...
Thursday, 29 January 15
CAPE MARKET IS STILL STRUGGLING WITH LOW DEMAND AND LOW COMMODITY PRICES
Handy
Supramax rates are heading south with slipping rates all across the block. USG activity is slow with mid-week levels in the mid 8.000s, Fea ...
Wednesday, 28 January 15
MARKET INSIGHT - STELIOS KOLLINTZAS
With most traders having returned to action from year end festivities, we have already seen signs of activity in the specialized product markets. L ...
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- PowerSource Philippines DevCo
- Georgia Ports Authority, United States
- Ind-Barath Power Infra Limited - India
- Attock Cement Pakistan Limited
- Bhushan Steel Limited - India
- Banpu Public Company Limited - Thailand
- Singapore Mercantile Exchange
- Gujarat Mineral Development Corp Ltd - India
- Global Business Power Corporation, Philippines
- Carbofer General Trading SA - India
- Lanco Infratech Ltd - India
- Tata Chemicals Ltd - India
- Kapuas Tunggal Persada - Indonesia
- GN Power Mariveles Coal Plant, Philippines
- Coal and Oil Company - UAE
- Xindia Steels Limited - India
- Australian Commodity Traders Exchange
- Eastern Energy - Thailand
- Petron Corporation, Philippines
- Alfred C Toepfer International GmbH - Germany
- Borneo Indobara - Indonesia
- Coalindo Energy - Indonesia
- PTC India Limited - India
- AsiaOL BioFuels Corp., Philippines
- Toyota Tsusho Corporation, Japan
- Aboitiz Power Corporation - Philippines
- Port Waratah Coal Services - Australia
- Formosa Plastics Group - Taiwan
- The State Trading Corporation of India Ltd
- Anglo American - United Kingdom
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Central Java Power - Indonesia
- Kalimantan Lumbung Energi - Indonesia
- Indo Tambangraya Megah - Indonesia
- Oldendorff Carriers - Singapore
- Africa Commodities Group - South Africa
- ICICI Bank Limited - India
- Eastern Coal Council - USA
- Renaissance Capital - South Africa
- Vizag Seaport Private Limited - India
- MS Steel International - UAE
- Thai Mozambique Logistica
- Sindya Power Generating Company Private Ltd
- Semirara Mining Corp, Philippines
- Posco Energy - South Korea
- International Coal Ventures Pvt Ltd - India
- The University of Queensland
- Intertek Mineral Services - Indonesia
- Wood Mackenzie - Singapore
- Kepco SPC Power Corporation, Philippines
- Sakthi Sugars Limited - India
- Grasim Industreis Ltd - India
- Planning Commission, India
- Dalmia Cement Bharat India
- Madhucon Powers Ltd - India
- SMG Consultants - Indonesia
- Binh Thuan Hamico - Vietnam
- Altura Mining Limited, Indonesia
- San Jose City I Power Corp, Philippines
- Kartika Selabumi Mining - Indonesia
- Sical Logistics Limited - India
- Petrochimia International Co. Ltd.- Taiwan
- Star Paper Mills Limited - India
- Deloitte Consulting - India
- Iligan Light & Power Inc, Philippines
- Timah Investasi Mineral - Indoneisa
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Bhoruka Overseas - Indonesia
- Bukit Baiduri Energy - Indonesia
- Leighton Contractors Pty Ltd - Australia
- Rio Tinto Coal - Australia
- Asmin Koalindo Tuhup - Indonesia
- Australian Coal Association
- Parry Sugars Refinery, India
- Straits Asia Resources Limited - Singapore
- Parliament of New Zealand
- ASAPP Information Group - India
- Globalindo Alam Lestari - Indonesia
- Billiton Holdings Pty Ltd - Australia
- Standard Chartered Bank - UAE
- Thiess Contractors Indonesia
- Gujarat Electricity Regulatory Commission - India
- Kumho Petrochemical, South Korea
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- TNB Fuel Sdn Bhd - Malaysia
- Energy Development Corp, Philippines
- Bukit Makmur.PT - Indonesia
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Heidelberg Cement - Germany
- PNOC Exploration Corporation - Philippines
- Economic Council, Georgia
- Jaiprakash Power Ventures ltd
- OPG Power Generation Pvt Ltd - India
- Trasteel International SA, Italy
- Salva Resources Pvt Ltd - India
- Miang Besar Coal Terminal - Indonesia
- Jorong Barutama Greston.PT - Indonesia
- Samtan Co., Ltd - South Korea
- Ministry of Finance - Indonesia
- India Bulls Power Limited - India
- Metalloyd Limited - United Kingdom
- Cigading International Bulk Terminal - Indonesia
- Bahari Cakrawala Sebuku - Indonesia
- Coastal Gujarat Power Limited - India
- Independent Power Producers Association of India
- Indonesian Coal Mining Association
- Indian Energy Exchange, India
- Makarim & Taira - Indonesia
- TeaM Sual Corporation - Philippines
- GMR Energy Limited - India
- Vijayanagar Sugar Pvt Ltd - India
- Siam City Cement PLC, Thailand
- Bhatia International Limited - India
- Maharashtra Electricity Regulatory Commission - India
- Indogreen Group - Indonesia
- SMC Global Power, Philippines
- Neyveli Lignite Corporation Ltd, - India
- Gujarat Sidhee Cement - India
- Siam City Cement - Thailand
- Sinarmas Energy and Mining - Indonesia
- Price Waterhouse Coopers - Russia
- Energy Link Ltd, New Zealand
- Merrill Lynch Commodities Europe
- Electricity Generating Authority of Thailand
- Baramulti Group, Indonesia
- VISA Power Limited - India
- Larsen & Toubro Limited - India
- Uttam Galva Steels Limited - India
- Riau Bara Harum - Indonesia
- Power Finance Corporation Ltd., India
- Offshore Bulk Terminal Pte Ltd, Singapore
- Indian Oil Corporation Limited
- Sree Jayajothi Cements Limited - India
- Malabar Cements Ltd - India
- Bulk Trading Sa - Switzerland
- LBH Netherlands Bv - Netherlands
- Electricity Authority, New Zealand
- Medco Energi Mining Internasional
- Orica Australia Pty. Ltd.
- Karaikal Port Pvt Ltd - India
- Ceylon Electricity Board - Sri Lanka
- GVK Power & Infra Limited - India
- Tamil Nadu electricity Board
- Kohat Cement Company Ltd. - Pakistan
- Rashtriya Ispat Nigam Limited - India
- SN Aboitiz Power Inc, Philippines
- Romanian Commodities Exchange
- Interocean Group of Companies - India
- Jindal Steel & Power Ltd - India
- CNBM International Corporation - China
- Kideco Jaya Agung - Indonesia
- Directorate General of MIneral and Coal - Indonesia
- Agrawal Coal Company - India
- Meenaskhi Energy Private Limited - India
- Ministry of Mines - Canada
- Latin American Coal - Colombia
- European Bulk Services B.V. - Netherlands
- Mercator Lines Limited - India
- GAC Shipping (India) Pvt Ltd
- Goldman Sachs - Singapore
- Mjunction Services Limited - India
- South Luzon Thermal Energy Corporation
- Mercuria Energy - Indonesia
- Therma Luzon, Inc, Philippines
- Bharathi Cement Corporation - India
- Bayan Resources Tbk. - Indonesia
- Aditya Birla Group - India
- McConnell Dowell - Australia
- Pendopo Energi Batubara - Indonesia
- Barasentosa Lestari - Indonesia
- Holcim Trading Pte Ltd - Singapore
- Global Coal Blending Company Limited - Australia
- Ambuja Cements Ltd - India
- Ministry of Transport, Egypt
- The Treasury - Australian Government
- Bank of Tokyo Mitsubishi UFJ Ltd
- IEA Clean Coal Centre - UK
- New Zealand Coal & Carbon
- London Commodity Brokers - England
- Antam Resourcindo - Indonesia
- Simpson Spence & Young - Indonesia
- Commonwealth Bank - Australia
- Chettinad Cement Corporation Ltd - India
- Orica Mining Services - Indonesia
- Karbindo Abesyapradhi - Indoneisa
- Sojitz Corporation - Japan
- Sarangani Energy Corporation, Philippines
- Central Electricity Authority - India
- Directorate Of Revenue Intelligence - India
- Marubeni Corporation - India
- Global Green Power PLC Corporation, Philippines
- Cement Manufacturers Association - India
- Manunggal Multi Energi - Indonesia
- IHS Mccloskey Coal Group - USA
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Videocon Industries ltd - India
- Essar Steel Hazira Ltd - India
- Wilmar Investment Holdings
- Savvy Resources Ltd - HongKong
- Mintek Dendrill Indonesia
- Kobexindo Tractors - Indoneisa
- CIMB Investment Bank - Malaysia
- Bangladesh Power Developement Board
- Pipit Mutiara Jaya. PT, Indonesia
- Vedanta Resources Plc - India
- Semirara Mining and Power Corporation, Philippines
- Minerals Council of Australia
- Indika Energy - Indonesia
- PetroVietnam Power Coal Import and Supply Company
- Kaltim Prima Coal - Indonesia
- Maheswari Brothers Coal Limited - India
- Krishnapatnam Port Company Ltd. - India
- White Energy Company Limited
- Chamber of Mines of South Africa
- Edison Trading Spa - Italy
- Bukit Asam (Persero) Tbk - Indonesia
- Meralco Power Generation, Philippines
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