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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, 23 December 14
SHIPOWNERS ARE FINALIZING MORE DEALS AS YEAR END COMES CLOSER - NIKOS ROUSSANOGLOU, HELLENIC SHIPPING NEWS WORLDWIDE
With the 2014 year just a few days before waving goodbye, shipowners are looking to close their pending deals in both the newbuilding and S&P m ...
Monday, 22 December 14
Q2'15 CFR SOUTH CHINA COAL SWAP CLOSED $ 0.30 LOWER THAN Q1'15 CLOSING
COALspot.com: API 8 CFR South China Coal swap for Q1’ 2015 delivery has decreased by US$ 3.67 (-5.81%) month over month and US$ 0.35 (-0.58%) ...
Monday, 22 December 14
API 5 FOB NEWCASTLE COAL SWAPS ARE HEADING SOUTH
COALspot.com: API 5 FOB Newcastle Coal swap for Q1’ 2015 delivery lost US$ 1.71 per MT (-3.24%) and closed at US$ 51.02 on 19 December month ...
Sunday, 21 December 14
PANAMAX COAL FREIGHT FROM INDONESIA TO INDIA FALLS FURTHER
COALspot.com: The BDI continued its fall as cape index lost heavily week on week.
The BDI was down 6.95 percent week over week and closed at 8 ...
Friday, 19 December 14
HOW WILL LOWER BUNKER PRICES AFFECT THE SUBSTANTIAL OVERCAPACITY IN DRY BULK MARKET? - BIMCO
As bunker fuel costs have come down from USD 600 per tonnes to USD 330 per tonnes in the past 6 months, much talk about increased ship speed have s ...
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- Africa Commodities Group - South Africa
- Kalimantan Lumbung Energi - Indonesia
- Jorong Barutama Greston.PT - Indonesia
- Ministry of Finance - Indonesia
- Parliament of New Zealand
- White Energy Company Limited
- Vijayanagar Sugar Pvt Ltd - India
- Bangladesh Power Developement Board
- OPG Power Generation Pvt Ltd - India
- Globalindo Alam Lestari - Indonesia
- Thai Mozambique Logistica
- Ministry of Transport, Egypt
- Riau Bara Harum - Indonesia
- LBH Netherlands Bv - Netherlands
- IEA Clean Coal Centre - UK
- Kumho Petrochemical, South Korea
- Bulk Trading Sa - Switzerland
- Therma Luzon, Inc, Philippines
- Pipit Mutiara Jaya. PT, Indonesia
- Miang Besar Coal Terminal - Indonesia
- Kepco SPC Power Corporation, Philippines
- SN Aboitiz Power Inc, Philippines
- Vizag Seaport Private Limited - India
- Eastern Coal Council - USA
- Aboitiz Power Corporation - Philippines
- Power Finance Corporation Ltd., India
- Price Waterhouse Coopers - Russia
- Karaikal Port Pvt Ltd - India
- McConnell Dowell - Australia
- Semirara Mining and Power Corporation, Philippines
- Star Paper Mills Limited - India
- Electricity Generating Authority of Thailand
- Standard Chartered Bank - UAE
- Meralco Power Generation, Philippines
- Pendopo Energi Batubara - Indonesia
- Bahari Cakrawala Sebuku - Indonesia
- Global Business Power Corporation, Philippines
- Makarim & Taira - Indonesia
- Mercuria Energy - Indonesia
- Mintek Dendrill Indonesia
- Siam City Cement - Thailand
- Gujarat Sidhee Cement - India
- Orica Australia Pty. Ltd.
- Energy Development Corp, Philippines
- Bukit Asam (Persero) Tbk - Indonesia
- Kideco Jaya Agung - Indonesia
- Manunggal Multi Energi - Indonesia
- Barasentosa Lestari - Indonesia
- Australian Coal Association
- Minerals Council of Australia
- Timah Investasi Mineral - Indoneisa
- Heidelberg Cement - Germany
- Vedanta Resources Plc - India
- PetroVietnam Power Coal Import and Supply Company
- Bayan Resources Tbk. - Indonesia
- Sical Logistics Limited - India
- Sakthi Sugars Limited - India
- Alfred C Toepfer International GmbH - Germany
- Global Green Power PLC Corporation, Philippines
- Interocean Group of Companies - India
- Agrawal Coal Company - India
- Australian Commodity Traders Exchange
- Straits Asia Resources Limited - Singapore
- Bhushan Steel Limited - India
- Ceylon Electricity Board - Sri Lanka
- Jaiprakash Power Ventures ltd
- Romanian Commodities Exchange
- Orica Mining Services - Indonesia
- Kapuas Tunggal Persada - Indonesia
- Energy Link Ltd, New Zealand
- PowerSource Philippines DevCo
- Planning Commission, India
- Bhatia International Limited - India
- Lanco Infratech Ltd - India
- Directorate Of Revenue Intelligence - India
- PNOC Exploration Corporation - Philippines
- Madhucon Powers Ltd - India
- India Bulls Power Limited - India
- TNB Fuel Sdn Bhd - Malaysia
- Chettinad Cement Corporation Ltd - India
- Central Java Power - Indonesia
- Electricity Authority, New Zealand
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Neyveli Lignite Corporation Ltd, - India
- Cement Manufacturers Association - India
- The Treasury - Australian Government
- Ambuja Cements Ltd - India
- Coal and Oil Company - UAE
- Salva Resources Pvt Ltd - India
- Sinarmas Energy and Mining - Indonesia
- Independent Power Producers Association of India
- Global Coal Blending Company Limited - Australia
- Essar Steel Hazira Ltd - India
- Marubeni Corporation - India
- Samtan Co., Ltd - South Korea
- Central Electricity Authority - India
- CIMB Investment Bank - Malaysia
- Attock Cement Pakistan Limited
- Gujarat Electricity Regulatory Commission - India
- Kartika Selabumi Mining - Indonesia
- ICICI Bank Limited - India
- The University of Queensland
- Grasim Industreis Ltd - India
- Semirara Mining Corp, Philippines
- Sree Jayajothi Cements Limited - India
- Kaltim Prima Coal - Indonesia
- Latin American Coal - Colombia
- South Luzon Thermal Energy Corporation
- Toyota Tsusho Corporation, Japan
- Cigading International Bulk Terminal - Indonesia
- SMG Consultants - Indonesia
- Goldman Sachs - Singapore
- Economic Council, Georgia
- Wilmar Investment Holdings
- Borneo Indobara - Indonesia
- Sojitz Corporation - Japan
- Videocon Industries ltd - India
- Iligan Light & Power Inc, Philippines
- Bukit Baiduri Energy - Indonesia
- Uttam Galva Steels Limited - India
- Bukit Makmur.PT - Indonesia
- London Commodity Brokers - England
- Leighton Contractors Pty Ltd - Australia
- Savvy Resources Ltd - HongKong
- The State Trading Corporation of India Ltd
- Petron Corporation, Philippines
- Renaissance Capital - South Africa
- Thiess Contractors Indonesia
- Intertek Mineral Services - Indonesia
- Holcim Trading Pte Ltd - Singapore
- Mjunction Services Limited - India
- Larsen & Toubro Limited - India
- CNBM International Corporation - China
- Bank of Tokyo Mitsubishi UFJ Ltd
- Indo Tambangraya Megah - Indonesia
- GVK Power & Infra Limited - India
- Port Waratah Coal Services - Australia
- AsiaOL BioFuels Corp., Philippines
- Billiton Holdings Pty Ltd - Australia
- Formosa Plastics Group - Taiwan
- Simpson Spence & Young - Indonesia
- Chamber of Mines of South Africa
- IHS Mccloskey Coal Group - USA
- Commonwealth Bank - Australia
- Xindia Steels Limited - India
- Bhoruka Overseas - Indonesia
- Eastern Energy - Thailand
- Rio Tinto Coal - Australia
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Sindya Power Generating Company Private Ltd
- Maheswari Brothers Coal Limited - India
- Oldendorff Carriers - Singapore
- Altura Mining Limited, Indonesia
- European Bulk Services B.V. - Netherlands
- Coastal Gujarat Power Limited - India
- Gujarat Mineral Development Corp Ltd - India
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Tamil Nadu electricity Board
- Mercator Lines Limited - India
- Merrill Lynch Commodities Europe
- Coalindo Energy - Indonesia
- Offshore Bulk Terminal Pte Ltd, Singapore
- Sarangani Energy Corporation, Philippines
- GAC Shipping (India) Pvt Ltd
- TeaM Sual Corporation - Philippines
- International Coal Ventures Pvt Ltd - India
- Binh Thuan Hamico - Vietnam
- Indian Energy Exchange, India
- Karbindo Abesyapradhi - Indoneisa
- New Zealand Coal & Carbon
- Siam City Cement PLC, Thailand
- Anglo American - United Kingdom
- Singapore Mercantile Exchange
- Tata Chemicals Ltd - India
- ASAPP Information Group - India
- Indika Energy - Indonesia
- PTC India Limited - India
- Carbofer General Trading SA - India
- Meenaskhi Energy Private Limited - India
- Medco Energi Mining Internasional
- GN Power Mariveles Coal Plant, Philippines
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Trasteel International SA, Italy
- Directorate General of MIneral and Coal - Indonesia
- Kobexindo Tractors - Indoneisa
- Ministry of Mines - Canada
- Rashtriya Ispat Nigam Limited - India
- Wood Mackenzie - Singapore
- Indogreen Group - Indonesia
- Kohat Cement Company Ltd. - Pakistan
- Metalloyd Limited - United Kingdom
- Jindal Steel & Power Ltd - India
- Ind-Barath Power Infra Limited - India
- Malabar Cements Ltd - India
- Edison Trading Spa - Italy
- San Jose City I Power Corp, Philippines
- SMC Global Power, Philippines
- Krishnapatnam Port Company Ltd. - India
- Aditya Birla Group - India
- Indian Oil Corporation Limited
- MS Steel International - UAE
- Asmin Koalindo Tuhup - Indonesia
- Baramulti Group, Indonesia
- Parry Sugars Refinery, India
- Banpu Public Company Limited - Thailand
- VISA Power Limited - India
- Deloitte Consulting - India
- Indonesian Coal Mining Association
- Petrochimia International Co. Ltd.- Taiwan
- Posco Energy - South Korea
- GMR Energy Limited - India
- Maharashtra Electricity Regulatory Commission - India
- Georgia Ports Authority, United States
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Antam Resourcindo - Indonesia
- Bharathi Cement Corporation - India
- Dalmia Cement Bharat India
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