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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 $2,839 at 2014H1 bunker prices”.
Poten added that “in order to improve TCE, owners have made operational adjustments by slow steaming during the ballast leg of the voyages, and during the laden leg where it was permitted in the charter party. This helps the owners by improving the economics on individual voyages as the fuel cost savings more than offset the longer steaming time when the market is low. An added benefit is that slow steaming reduces the efficiency or the fleet as more vessels are needed to move the same volume of cargo. Earlier in the year, when the rates were lower, slow steaming made more sense as the additional revenue that could be earned during the additional 3.9 ballasting days was lower than the fuel savings. At current market rates and lower bunker prices, this situation has shifted. At least for the vessel and voyage combination in our example, increasing the ballast speed could prove to be beneficial. The situation could be different for other vessels and voyages, but it makes the case for owners to run the numbers. The benefits of fuel efficient designs might have been reduced for now but the investment is for 20+ years and fuel prices are likely to increase again in the future”, the analyst concluded.
Source: Nikos Roussanoglou, Hellenic Shipping News
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Tuesday, 13 January 15
MORE PITFALLS FOR OWNERS LOOKING TO TERMINATE FOR UNPAID HIRE - INCE & CO
KNOWLEDGE TO ELEVATE
It is a debatable point whether or not the obligation to pay hire under a time charter is a condition of the contract or ...
Tuesday, 13 January 15
Q2 CFR SOUTH CHINA COAL SWAP DECLINED 8.66% M-O-M
COALspot.com: API 8 CFR South China Coal swap for Q1’ 2015 delivery declined by US$ 3.48 (-5.73%) month over month and US$ 2.35 (-3.94%) week ...
Tuesday, 13 January 15
Q1' 2015 RICHARDS BAY COAL SWAP SLIGHTLY HIGHER THAN Q2 & Q4 2015 SWAPS
COALspot.com: API 4 FOB Richards Bay Coal swap for delivery Q1' 2015 lost month on month and week over week.
The Q1 swap has lost US$ 7.21 ...
Monday, 12 January 15
COAL: LOW PRICES ARE EXPECTED TO DRIVE A SUPPLY-DRIVEN RECOVERY IN THE MEDIUM TERM - SGX
COALspot.com: Thermal coal prices dropped to six-year lows in 2014 driven by persistent oversupply, SGX says in its “ Commodities 2014 - A ye ...
Monday, 12 January 15
FREIGHT MARKET: 2015 FLEET SUPPLY GROWTH IS EXPECTED TO REMAIN SLIGHTLY AHEAD OF CARGO GROWTH - SGX
COALspot.com: The dry bulk freight market was forced to digest a number of negatives in 2014 leading the Baltic Dry Index to fall 66% through the y ...
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- Uttam Galva Steels Limited - India
- Miang Besar Coal Terminal - Indonesia
- Semirara Mining and Power Corporation, Philippines
- Salva Resources Pvt Ltd - India
- Kideco Jaya Agung - Indonesia
- Bharathi Cement Corporation - India
- Altura Mining Limited, Indonesia
- TNB Fuel Sdn Bhd - Malaysia
- Sical Logistics Limited - India
- Intertek Mineral Services - Indonesia
- Leighton Contractors Pty Ltd - Australia
- Tamil Nadu electricity Board
- Oldendorff Carriers - Singapore
- Economic Council, Georgia
- Kumho Petrochemical, South Korea
- IHS Mccloskey Coal Group - USA
- OPG Power Generation Pvt Ltd - India
- Power Finance Corporation Ltd., India
- Australian Coal Association
- Deloitte Consulting - India
- Africa Commodities Group - South Africa
- Meenaskhi Energy Private Limited - India
- Krishnapatnam Port Company Ltd. - India
- The State Trading Corporation of India Ltd
- Trasteel International SA, Italy
- Larsen & Toubro Limited - India
- Pendopo Energi Batubara - Indonesia
- MS Steel International - UAE
- Kepco SPC Power Corporation, Philippines
- Toyota Tsusho Corporation, Japan
- Cement Manufacturers Association - India
- European Bulk Services B.V. - Netherlands
- Timah Investasi Mineral - Indoneisa
- Bukit Asam (Persero) Tbk - Indonesia
- Indogreen Group - Indonesia
- Coastal Gujarat Power Limited - India
- Kalimantan Lumbung Energi - Indonesia
- Iligan Light & Power Inc, Philippines
- PowerSource Philippines DevCo
- Posco Energy - South Korea
- Indian Oil Corporation Limited
- Ministry of Finance - Indonesia
- Cigading International Bulk Terminal - Indonesia
- The Treasury - Australian Government
- Holcim Trading Pte Ltd - Singapore
- Offshore Bulk Terminal Pte Ltd, Singapore
- Mercator Lines Limited - India
- Thai Mozambique Logistica
- Samtan Co., Ltd - South Korea
- Agrawal Coal Company - India
- San Jose City I Power Corp, Philippines
- Savvy Resources Ltd - HongKong
- Minerals Council of Australia
- Global Coal Blending Company Limited - Australia
- Eastern Energy - Thailand
- Sree Jayajothi Cements Limited - India
- Wilmar Investment Holdings
- Energy Link Ltd, New Zealand
- LBH Netherlands Bv - Netherlands
- Orica Australia Pty. Ltd.
- Formosa Plastics Group - Taiwan
- Port Waratah Coal Services - Australia
- Thiess Contractors Indonesia
- Heidelberg Cement - Germany
- Kapuas Tunggal Persada - Indonesia
- Petron Corporation, Philippines
- ICICI Bank Limited - India
- Anglo American - United Kingdom
- Kohat Cement Company Ltd. - Pakistan
- Manunggal Multi Energi - Indonesia
- Bank of Tokyo Mitsubishi UFJ Ltd
- Binh Thuan Hamico - Vietnam
- GMR Energy Limited - India
- Chamber of Mines of South Africa
- Merrill Lynch Commodities Europe
- Bukit Makmur.PT - Indonesia
- Mintek Dendrill Indonesia
- Interocean Group of Companies - India
- Coal and Oil Company - UAE
- Kobexindo Tractors - Indoneisa
- Essar Steel Hazira Ltd - India
- CNBM International Corporation - China
- Maheswari Brothers Coal Limited - India
- Pipit Mutiara Jaya. PT, Indonesia
- Mjunction Services Limited - India
- Neyveli Lignite Corporation Ltd, - India
- Orica Mining Services - Indonesia
- Globalindo Alam Lestari - Indonesia
- Petrochimia International Co. Ltd.- Taiwan
- Rio Tinto Coal - Australia
- Karbindo Abesyapradhi - Indoneisa
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Indonesian Coal Mining Association
- CIMB Investment Bank - Malaysia
- Aditya Birla Group - India
- Ministry of Transport, Egypt
- Baramulti Group, Indonesia
- London Commodity Brokers - England
- GAC Shipping (India) Pvt Ltd
- Planning Commission, India
- Lanco Infratech Ltd - India
- Grasim Industreis Ltd - India
- Central Electricity Authority - India
- Bukit Baiduri Energy - Indonesia
- Coalindo Energy - Indonesia
- Parry Sugars Refinery, India
- Alfred C Toepfer International GmbH - Germany
- Malabar Cements Ltd - India
- Wood Mackenzie - Singapore
- Kartika Selabumi Mining - Indonesia
- Medco Energi Mining Internasional
- Makarim & Taira - Indonesia
- Bahari Cakrawala Sebuku - Indonesia
- Dalmia Cement Bharat India
- IEA Clean Coal Centre - UK
- Siam City Cement - Thailand
- Bhatia International Limited - India
- PNOC Exploration Corporation - Philippines
- Eastern Coal Council - USA
- Borneo Indobara - Indonesia
- Sindya Power Generating Company Private Ltd
- New Zealand Coal & Carbon
- Rashtriya Ispat Nigam Limited - India
- Meralco Power Generation, Philippines
- Ceylon Electricity Board - Sri Lanka
- Kaltim Prima Coal - Indonesia
- Commonwealth Bank - Australia
- Gujarat Electricity Regulatory Commission - India
- VISA Power Limited - India
- Goldman Sachs - Singapore
- Mercuria Energy - Indonesia
- Simpson Spence & Young - Indonesia
- SMC Global Power, Philippines
- PetroVietnam Power Coal Import and Supply Company
- Australian Commodity Traders Exchange
- Marubeni Corporation - India
- Singapore Mercantile Exchange
- ASAPP Information Group - India
- Ministry of Mines - Canada
- Gujarat Mineral Development Corp Ltd - India
- Energy Development Corp, Philippines
- Maharashtra Electricity Regulatory Commission - India
- Barasentosa Lestari - Indonesia
- Antam Resourcindo - Indonesia
- Therma Luzon, Inc, Philippines
- Siam City Cement PLC, Thailand
- Vijayanagar Sugar Pvt Ltd - India
- Standard Chartered Bank - UAE
- Bhoruka Overseas - Indonesia
- Semirara Mining Corp, Philippines
- Aboitiz Power Corporation - Philippines
- GVK Power & Infra Limited - India
- Georgia Ports Authority, United States
- Jorong Barutama Greston.PT - Indonesia
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Metalloyd Limited - United Kingdom
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Gujarat Sidhee Cement - India
- Tata Chemicals Ltd - India
- Vedanta Resources Plc - India
- Indian Energy Exchange, India
- South Luzon Thermal Energy Corporation
- Edison Trading Spa - Italy
- Videocon Industries ltd - India
- PTC India Limited - India
- Central Java Power - Indonesia
- Independent Power Producers Association of India
- Bayan Resources Tbk. - Indonesia
- Vizag Seaport Private Limited - India
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- White Energy Company Limited
- GN Power Mariveles Coal Plant, Philippines
- Star Paper Mills Limited - India
- Global Business Power Corporation, Philippines
- Renaissance Capital - South Africa
- TeaM Sual Corporation - Philippines
- Directorate General of MIneral and Coal - Indonesia
- SN Aboitiz Power Inc, Philippines
- International Coal Ventures Pvt Ltd - India
- The University of Queensland
- Electricity Generating Authority of Thailand
- Bangladesh Power Developement Board
- Jindal Steel & Power Ltd - India
- Global Green Power PLC Corporation, Philippines
- Sarangani Energy Corporation, Philippines
- Ind-Barath Power Infra Limited - India
- Banpu Public Company Limited - Thailand
- Xindia Steels Limited - India
- Directorate Of Revenue Intelligence - India
- Straits Asia Resources Limited - Singapore
- Bhushan Steel Limited - India
- Romanian Commodities Exchange
- Attock Cement Pakistan Limited
- Bulk Trading Sa - Switzerland
- Karaikal Port Pvt Ltd - India
- Jaiprakash Power Ventures ltd
- Sinarmas Energy and Mining - Indonesia
- Parliament of New Zealand
- Sakthi Sugars Limited - India
- Chettinad Cement Corporation Ltd - India
- Sojitz Corporation - Japan
- Asmin Koalindo Tuhup - Indonesia
- Billiton Holdings Pty Ltd - Australia
- Carbofer General Trading SA - India
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Ambuja Cements Ltd - India
- India Bulls Power Limited - India
- Latin American Coal - Colombia
- AsiaOL BioFuels Corp., Philippines
- Price Waterhouse Coopers - Russia
- Madhucon Powers Ltd - India
- SMG Consultants - Indonesia
- Indo Tambangraya Megah - Indonesia
- Riau Bara Harum - Indonesia
- McConnell Dowell - Australia
- Indika Energy - Indonesia
- Electricity Authority, New Zealand
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