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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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Wednesday, 21 January 15
PANAMAX MARKET MOVED SIDEWAYS OVERALL LAST WEEK - INTERMODAL
COALspot.com: The positive sentiment in which the week prior ended carried on through-out last week as well, the end of which marked the first posi ...
Wednesday, 21 January 15
SHIFT IN INTERNATIONAL COAL TRADE TO THE PACIFIC BASIN WILL CONTINUE - IMF
COALspot.com: The shift in international coal trade to the Pacific Basin will continue, IMF said in its latest Medium-Term Coal Market Report.
...
Wednesday, 21 January 15
MARKET INSIGHT - VASSILIS LOGOTHETIS, INTERMODAL
The World Bank has lowered its forecast for global growth in 2015 to 3% down from its previous level of 3.4% amid rising concerns over the economic ...
Wednesday, 21 January 15
THERMAL COAL PRICE OUTLOOK DEPENDENT ON INDIAN IMPORT DEMAND - MATTHEW BOYLE, CRU
COALspot.com: Supply and demand side developments in India will be an important determinant of future market dynamics and prices for thermal coal a ...
Wednesday, 21 January 15
PORT OF NEWCASTLE COAL EXPORTS JUMP 16.19% ON MONTH TO 15.80 MIL MT IN DECEMBER' 14
COALspot.com: The Port of Newcastle, Australia’s major trading ports and the world’s largest coal export port, has shipped $1.136 billi ...
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- Asia Pacific Energy Resources Ventures Inc, Philippines
- Pipit Mutiara Jaya. PT, Indonesia
- TeaM Sual Corporation - Philippines
- White Energy Company Limited
- Thai Mozambique Logistica
- India Bulls Power Limited - India
- Australian Coal Association
- Bulk Trading Sa - Switzerland
- Energy Development Corp, Philippines
- Coastal Gujarat Power Limited - India
- Vijayanagar Sugar Pvt Ltd - India
- Manunggal Multi Energi - Indonesia
- Planning Commission, India
- SMC Global Power, Philippines
- Africa Commodities Group - South Africa
- Sarangani Energy Corporation, Philippines
- Dalmia Cement Bharat India
- Siam City Cement PLC, Thailand
- Gujarat Electricity Regulatory Commission - India
- Rashtriya Ispat Nigam Limited - India
- Petron Corporation, Philippines
- Directorate General of MIneral and Coal - Indonesia
- Parliament of New Zealand
- GN Power Mariveles Coal Plant, Philippines
- Edison Trading Spa - Italy
- Bank of Tokyo Mitsubishi UFJ Ltd
- Videocon Industries ltd - India
- Jaiprakash Power Ventures ltd
- Billiton Holdings Pty Ltd - Australia
- Posco Energy - South Korea
- Ind-Barath Power Infra Limited - India
- Alfred C Toepfer International GmbH - Germany
- Trasteel International SA, Italy
- Indian Energy Exchange, India
- Pendopo Energi Batubara - Indonesia
- European Bulk Services B.V. - Netherlands
- Indo Tambangraya Megah - Indonesia
- McConnell Dowell - Australia
- Simpson Spence & Young - Indonesia
- Straits Asia Resources Limited - Singapore
- PNOC Exploration Corporation - Philippines
- Kaltim Prima Coal - Indonesia
- ICICI Bank Limited - India
- Essar Steel Hazira Ltd - India
- Economic Council, Georgia
- Central Electricity Authority - India
- Sinarmas Energy and Mining - Indonesia
- CIMB Investment Bank - Malaysia
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Karbindo Abesyapradhi - Indoneisa
- IHS Mccloskey Coal Group - USA
- Star Paper Mills Limited - India
- The State Trading Corporation of India Ltd
- Bukit Makmur.PT - Indonesia
- Globalindo Alam Lestari - Indonesia
- Singapore Mercantile Exchange
- The Treasury - Australian Government
- Kohat Cement Company Ltd. - Pakistan
- Medco Energi Mining Internasional
- Altura Mining Limited, Indonesia
- Tamil Nadu electricity Board
- Baramulti Group, Indonesia
- South Luzon Thermal Energy Corporation
- Thiess Contractors Indonesia
- Port Waratah Coal Services - Australia
- Agrawal Coal Company - India
- Samtan Co., Ltd - South Korea
- Indika Energy - Indonesia
- Bayan Resources Tbk. - Indonesia
- Intertek Mineral Services - Indonesia
- Jorong Barutama Greston.PT - Indonesia
- PowerSource Philippines DevCo
- Global Business Power Corporation, Philippines
- Attock Cement Pakistan Limited
- Larsen & Toubro Limited - India
- Ministry of Mines - Canada
- Orica Mining Services - Indonesia
- Australian Commodity Traders Exchange
- Ambuja Cements Ltd - India
- Indonesian Coal Mining Association
- Indian Oil Corporation Limited
- AsiaOL BioFuels Corp., Philippines
- Semirara Mining and Power Corporation, Philippines
- Sindya Power Generating Company Private Ltd
- Electricity Generating Authority of Thailand
- Ceylon Electricity Board - Sri Lanka
- Sojitz Corporation - Japan
- Bukit Asam (Persero) Tbk - Indonesia
- Bangladesh Power Developement Board
- Electricity Authority, New Zealand
- Commonwealth Bank - Australia
- Goldman Sachs - Singapore
- Parry Sugars Refinery, India
- Eastern Energy - Thailand
- Barasentosa Lestari - Indonesia
- Maheswari Brothers Coal Limited - India
- International Coal Ventures Pvt Ltd - India
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Jindal Steel & Power Ltd - India
- Deloitte Consulting - India
- Siam City Cement - Thailand
- Ministry of Finance - Indonesia
- Anglo American - United Kingdom
- Meralco Power Generation, Philippines
- Heidelberg Cement - Germany
- Bhushan Steel Limited - India
- Bharathi Cement Corporation - India
- Semirara Mining Corp, Philippines
- Malabar Cements Ltd - India
- ASAPP Information Group - India
- Kepco SPC Power Corporation, Philippines
- Madhucon Powers Ltd - India
- Leighton Contractors Pty Ltd - Australia
- Directorate Of Revenue Intelligence - India
- Carbofer General Trading SA - India
- Gujarat Sidhee Cement - India
- Oldendorff Carriers - Singapore
- London Commodity Brokers - England
- Makarim & Taira - Indonesia
- Romanian Commodities Exchange
- Indogreen Group - Indonesia
- Borneo Indobara - Indonesia
- Wilmar Investment Holdings
- Gujarat Mineral Development Corp Ltd - India
- Mercuria Energy - Indonesia
- Interocean Group of Companies - India
- PetroVietnam Power Coal Import and Supply Company
- Independent Power Producers Association of India
- Salva Resources Pvt Ltd - India
- Antam Resourcindo - Indonesia
- Petrochimia International Co. Ltd.- Taiwan
- Cigading International Bulk Terminal - Indonesia
- Miang Besar Coal Terminal - Indonesia
- Global Coal Blending Company Limited - Australia
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Chettinad Cement Corporation Ltd - India
- GMR Energy Limited - India
- Formosa Plastics Group - Taiwan
- Therma Luzon, Inc, Philippines
- Aditya Birla Group - India
- MS Steel International - UAE
- Mercator Lines Limited - India
- OPG Power Generation Pvt Ltd - India
- Lanco Infratech Ltd - India
- Metalloyd Limited - United Kingdom
- Bhatia International Limited - India
- Central Java Power - Indonesia
- Sakthi Sugars Limited - India
- Holcim Trading Pte Ltd - Singapore
- Orica Australia Pty. Ltd.
- Maharashtra Electricity Regulatory Commission - India
- Standard Chartered Bank - UAE
- Marubeni Corporation - India
- Minerals Council of Australia
- Eastern Coal Council - USA
- LBH Netherlands Bv - Netherlands
- Timah Investasi Mineral - Indoneisa
- TNB Fuel Sdn Bhd - Malaysia
- Kalimantan Lumbung Energi - Indonesia
- Sical Logistics Limited - India
- Riau Bara Harum - Indonesia
- Vizag Seaport Private Limited - India
- Rio Tinto Coal - Australia
- CNBM International Corporation - China
- IEA Clean Coal Centre - UK
- PTC India Limited - India
- Karaikal Port Pvt Ltd - India
- Grasim Industreis Ltd - India
- Tata Chemicals Ltd - India
- Wood Mackenzie - Singapore
- Power Finance Corporation Ltd., India
- Asmin Koalindo Tuhup - Indonesia
- Kobexindo Tractors - Indoneisa
- GVK Power & Infra Limited - India
- The University of Queensland
- SMG Consultants - Indonesia
- Neyveli Lignite Corporation Ltd, - India
- Chamber of Mines of South Africa
- Bahari Cakrawala Sebuku - Indonesia
- Xindia Steels Limited - India
- Kumho Petrochemical, South Korea
- Mjunction Services Limited - India
- Coalindo Energy - Indonesia
- VISA Power Limited - India
- Kideco Jaya Agung - Indonesia
- Savvy Resources Ltd - HongKong
- Meenaskhi Energy Private Limited - India
- Bukit Baiduri Energy - Indonesia
- Merrill Lynch Commodities Europe
- Uttam Galva Steels Limited - India
- Kapuas Tunggal Persada - Indonesia
- Energy Link Ltd, New Zealand
- Binh Thuan Hamico - Vietnam
- Latin American Coal - Colombia
- Kartika Selabumi Mining - Indonesia
- Cement Manufacturers Association - India
- Bhoruka Overseas - Indonesia
- Offshore Bulk Terminal Pte Ltd, Singapore
- San Jose City I Power Corp, Philippines
- GAC Shipping (India) Pvt Ltd
- Iligan Light & Power Inc, Philippines
- Georgia Ports Authority, United States
- Ministry of Transport, Egypt
- Sree Jayajothi Cements Limited - India
- Krishnapatnam Port Company Ltd. - India
- Aboitiz Power Corporation - Philippines
- New Zealand Coal & Carbon
- Price Waterhouse Coopers - Russia
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Vedanta Resources Plc - India
- Toyota Tsusho Corporation, Japan
- Coal and Oil Company - UAE
- Mintek Dendrill Indonesia
- Global Green Power PLC Corporation, Philippines
- Banpu Public Company Limited - Thailand
- Renaissance Capital - South Africa
- SN Aboitiz Power Inc, Philippines
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