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Wednesday, 25 March 15
MARKET INSIGHT: TANKER CHARTERING - KATERINA RESTIS
 The 1st of January 2015, as broadly reported, denoted the beginning date of new and progressive emission regulations for vessels operating within the Sulphur Emission Control Areas (SECAs) particularly established for the control and minimization of SOx and NOx emissions. As per MARPOL Annex VI new guidelines, vessels are obliged to burn bunkers with a maximum of 0.10% Sulphur content in the main, auxiliary engines and boilers, within the SECAs whereas up to December 2014, the Sulphur content limit was no more than 1.00%. The SECAs presently covers the North Ocean, Baltic Ocean, North American coastline and US Caribbean. Furthermore, existing EU Law already requires ships whilst in EU ports to use fuels with 0.1% Sulphur content while at berth, unless they use shore-side electricity.
In order for vessels to comply with the new requirements they need to switch to ultra-low Sulphur fuel types and currently the most viable option seems to be Low Sulphur Marine Gas Oil. The changeover from HFO to LSMGO sensibly poses technical and operational challenges as the two fuels operate at a different temperature, in addition to increased risk of thermal shocks to machinery, as well as the difference in viscosity that needs to be considered in order to avoid fuel pump failures. Vessels may also comply with the SOx/NOx restrictions with the use of Exhaust Gas Cleaning Systems that “clean” the emissions before released into the atmosphere though it should be noted that the installation costs remain substantial.
Furthermore, SOx emissions from shipping may also be controlled with the use of alternative fuels, LNG or bio-fuels. It is indicated that LNG use as a marine fuel remains cheaper than MGO and stands as a better choice in terms of reserve to production ratio. Its use to propel ships represents a “green” alternative, with 0% Sulphur content, while when ignited has nearly zero Oxide emissions. It does not affect the operational qualities of the vessel though specialized training for crew members is essential. Wartsila, Rolls Royce Marine, Mitsubishi and MAN are the main manufacturers of gas or dual fuel engines for ships. The technical, safety requirements and investment costs signify higher suitability for new-buildings. At present, the most immediate difficulty is the limited available infrastructure for bunkering the aforesaid vessels. Moreover, bio-fuels are an alternative to lower carbon concentration in the propulsion of ships. For instance, biodiesel and vegetable oils can be used partly in diesel engines or as an alternative for HFO consumption. However there is not sufficient practical experience and currently they are more expensive than oil products.
The employment of the new restrictions on how freight rates reflecting the new market criteria is yet to be integrated into charter-party agreements. The Worldscale Association published a fixed differential of $48.35 per mile to embody the cost of burning 0.1% Gasoil within the SECAs, compared to the 380 CST fuel oil grade delivered basis Rotterdam used to calculate Worldscale flat rates. Ship-Owners and brokers are incorporating new ways to negotiate the additional emerged costs into their charter contracts. The definition of these costs or which party should carry their burden, nevertheless still remains ambiguous.
To conclude with, the main industry debate is that of the ability of implementation of these new regulations rather than that of compliance. In essence, Owners need to evaluate any return on investment in new technology with the risks and remarkable increased costs of higher price of low-Sulphur fuel, but also the cost of technological failure caused by burning low-Sulphur fuel. In the longer term, the staging of compliance will most probably adjust to market conditions.
By Katerina Restis
Tanker Chartering
Compiled by:
Intermodal Research & Valuations
Analysts:
Ms. Eva Tzima
Disclaimer and legal disclosure: For any further queries please do not hesitate to contact our Research & Valuations Department. The information contained in this report has been obtained from various sources, as reported in the market. Intermodal Shipbrokers Co. believes such information to be factual and reliable without making guarantees regarding its accuracy or completeness. Whilst every care has been taken in the production of the above review, no liability can be accepted for any loss or damage incurred in any way whatsoever by any person who may seek to rely on the information and views contained in this material. This report is being produced for the internal use of the intended recipients only and no re-producing is allowed, without the prior written authorization of Intermodal Shipbrokers Co.
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Friday, 08 May 15
COAL PRODUCTION IN U.S. UP 3.2% THIS PAST WEEK - EIA
COALspot.com – United States the second largest coal producer in the world has produced approximately totaled an estimated 17.4 million short ...
Wednesday, 06 May 15
COMBINATION OF HOLIDAYS AND A SHAKY MARKET PUT ADDITIONAL PRESSURE ON RATES
COALspot.com: The combination of holidays and a shaky market is always a recipe for additional pressure on rates and last week was no exception. Wi ...
Wednesday, 06 May 15
SHIPPING MARKET INSIGHT - GEORGE ILIOPOULOS
The first four months of 2015 are now behind us and they make up for a decent amount of time to look back and assess how the year is evolving so fa ...
Tuesday, 05 May 15
MIFA BERSAUDARA UNIT OF ABM INVESTAMA STARTS OPERATING $200M COAL MINE IN ACEH
Reswara Minergi Hartama, a coal mining unit of coal miner ABM Investama known as known as Reswara, inaugurated a $200 million integrated coal minin ...
Tuesday, 05 May 15
FREIGHT DERIVATIVE VOLUMES REACHED TOTALED 14,154 CONTRACTS IN APRIL - SGX
COALspot.com: “Our unique suite of freight and bulk commodity products provides market participants with a wide range of trading strategies a ...
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- Gujarat Mineral Development Corp Ltd - India
- LBH Netherlands Bv - Netherlands
- TeaM Sual Corporation - Philippines
- Riau Bara Harum - Indonesia
- Power Finance Corporation Ltd., India
- Bhatia International Limited - India
- Metalloyd Limited - United Kingdom
- Price Waterhouse Coopers - Russia
- The State Trading Corporation of India Ltd
- Xindia Steels Limited - India
- Bangladesh Power Developement Board
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Electricity Authority, New Zealand
- Energy Link Ltd, New Zealand
- Krishnapatnam Port Company Ltd. - India
- Binh Thuan Hamico - Vietnam
- Uttam Galva Steels Limited - India
- Alfred C Toepfer International GmbH - Germany
- Kaltim Prima Coal - Indonesia
- Standard Chartered Bank - UAE
- Mercuria Energy - Indonesia
- IHS Mccloskey Coal Group - USA
- Renaissance Capital - South Africa
- Indo Tambangraya Megah - Indonesia
- Edison Trading Spa - Italy
- Vedanta Resources Plc - India
- Ceylon Electricity Board - Sri Lanka
- Gujarat Sidhee Cement - India
- Borneo Indobara - Indonesia
- McConnell Dowell - Australia
- Intertek Mineral Services - Indonesia
- Indian Energy Exchange, India
- Billiton Holdings Pty Ltd - Australia
- Jaiprakash Power Ventures ltd
- Thiess Contractors Indonesia
- Ind-Barath Power Infra Limited - India
- SMG Consultants - Indonesia
- London Commodity Brokers - England
- Australian Coal Association
- Merrill Lynch Commodities Europe
- Tata Chemicals Ltd - India
- Ministry of Finance - Indonesia
- Thai Mozambique Logistica
- GVK Power & Infra Limited - India
- GAC Shipping (India) Pvt Ltd
- Siam City Cement PLC, Thailand
- Australian Commodity Traders Exchange
- AsiaOL BioFuels Corp., Philippines
- Georgia Ports Authority, United States
- Ministry of Transport, Egypt
- Orica Mining Services - Indonesia
- Singapore Mercantile Exchange
- Bukit Baiduri Energy - Indonesia
- Parliament of New Zealand
- Bahari Cakrawala Sebuku - Indonesia
- Grasim Industreis Ltd - India
- Independent Power Producers Association of India
- ICICI Bank Limited - India
- Parry Sugars Refinery, India
- Karaikal Port Pvt Ltd - India
- Bayan Resources Tbk. - Indonesia
- Kobexindo Tractors - Indoneisa
- Chettinad Cement Corporation Ltd - India
- Attock Cement Pakistan Limited
- Agrawal Coal Company - India
- Mjunction Services Limited - India
- Sojitz Corporation - Japan
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Coal and Oil Company - UAE
- Bukit Asam (Persero) Tbk - Indonesia
- Lanco Infratech Ltd - India
- International Coal Ventures Pvt Ltd - India
- Global Coal Blending Company Limited - Australia
- Bulk Trading Sa - Switzerland
- Sical Logistics Limited - India
- Manunggal Multi Energi - Indonesia
- Medco Energi Mining Internasional
- Bhushan Steel Limited - India
- TNB Fuel Sdn Bhd - Malaysia
- PTC India Limited - India
- Samtan Co., Ltd - South Korea
- Eastern Coal Council - USA
- Kumho Petrochemical, South Korea
- Meralco Power Generation, Philippines
- Orica Australia Pty. Ltd.
- Petron Corporation, Philippines
- Videocon Industries ltd - India
- Iligan Light & Power Inc, Philippines
- Maharashtra Electricity Regulatory Commission - India
- Asmin Koalindo Tuhup - Indonesia
- Mercator Lines Limited - India
- Bukit Makmur.PT - Indonesia
- Straits Asia Resources Limited - Singapore
- White Energy Company Limited
- Interocean Group of Companies - India
- Mintek Dendrill Indonesia
- Cigading International Bulk Terminal - Indonesia
- Vizag Seaport Private Limited - India
- Meenaskhi Energy Private Limited - India
- Bharathi Cement Corporation - India
- Oldendorff Carriers - Singapore
- Economic Council, Georgia
- Pipit Mutiara Jaya. PT, Indonesia
- CIMB Investment Bank - Malaysia
- Jorong Barutama Greston.PT - Indonesia
- Antam Resourcindo - Indonesia
- Maheswari Brothers Coal Limited - India
- Salva Resources Pvt Ltd - India
- Marubeni Corporation - India
- SN Aboitiz Power Inc, Philippines
- Central Electricity Authority - India
- Madhucon Powers Ltd - India
- Latin American Coal - Colombia
- Star Paper Mills Limited - India
- PNOC Exploration Corporation - Philippines
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Baramulti Group, Indonesia
- MS Steel International - UAE
- Coastal Gujarat Power Limited - India
- Africa Commodities Group - South Africa
- India Bulls Power Limited - India
- Tamil Nadu electricity Board
- Malabar Cements Ltd - India
- Semirara Mining Corp, Philippines
- Kepco SPC Power Corporation, Philippines
- ASAPP Information Group - India
- Global Green Power PLC Corporation, Philippines
- Indian Oil Corporation Limited
- Commonwealth Bank - Australia
- Deloitte Consulting - India
- Makarim & Taira - Indonesia
- Dalmia Cement Bharat India
- Leighton Contractors Pty Ltd - Australia
- Global Business Power Corporation, Philippines
- South Luzon Thermal Energy Corporation
- Miang Besar Coal Terminal - Indonesia
- Minerals Council of Australia
- Sree Jayajothi Cements Limited - India
- Toyota Tsusho Corporation, Japan
- Sindya Power Generating Company Private Ltd
- San Jose City I Power Corp, Philippines
- The University of Queensland
- European Bulk Services B.V. - Netherlands
- Eastern Energy - Thailand
- Directorate General of MIneral and Coal - Indonesia
- Barasentosa Lestari - Indonesia
- Siam City Cement - Thailand
- Romanian Commodities Exchange
- Bhoruka Overseas - Indonesia
- GN Power Mariveles Coal Plant, Philippines
- The Treasury - Australian Government
- Offshore Bulk Terminal Pte Ltd, Singapore
- Banpu Public Company Limited - Thailand
- Cement Manufacturers Association - India
- Chamber of Mines of South Africa
- Heidelberg Cement - Germany
- Coalindo Energy - Indonesia
- Rashtriya Ispat Nigam Limited - India
- Savvy Resources Ltd - HongKong
- Electricity Generating Authority of Thailand
- Kideco Jaya Agung - Indonesia
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Neyveli Lignite Corporation Ltd, - India
- Petrochimia International Co. Ltd.- Taiwan
- Jindal Steel & Power Ltd - India
- Sarangani Energy Corporation, Philippines
- Anglo American - United Kingdom
- Pendopo Energi Batubara - Indonesia
- VISA Power Limited - India
- IEA Clean Coal Centre - UK
- Karbindo Abesyapradhi - Indoneisa
- Indogreen Group - Indonesia
- Rio Tinto Coal - Australia
- Wood Mackenzie - Singapore
- Sakthi Sugars Limited - India
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- OPG Power Generation Pvt Ltd - India
- Timah Investasi Mineral - Indoneisa
- Ministry of Mines - Canada
- Kohat Cement Company Ltd. - Pakistan
- Formosa Plastics Group - Taiwan
- Indika Energy - Indonesia
- Sinarmas Energy and Mining - Indonesia
- Larsen & Toubro Limited - India
- Therma Luzon, Inc, Philippines
- Directorate Of Revenue Intelligence - India
- Goldman Sachs - Singapore
- Vijayanagar Sugar Pvt Ltd - India
- Wilmar Investment Holdings
- Central Java Power - Indonesia
- Altura Mining Limited, Indonesia
- SMC Global Power, Philippines
- Gujarat Electricity Regulatory Commission - India
- Indonesian Coal Mining Association
- Aditya Birla Group - India
- Energy Development Corp, Philippines
- Kalimantan Lumbung Energi - Indonesia
- Simpson Spence & Young - Indonesia
- Ambuja Cements Ltd - India
- PowerSource Philippines DevCo
- Posco Energy - South Korea
- Planning Commission, India
- New Zealand Coal & Carbon
- Kartika Selabumi Mining - Indonesia
- Kapuas Tunggal Persada - Indonesia
- CNBM International Corporation - China
- Essar Steel Hazira Ltd - India
- PetroVietnam Power Coal Import and Supply Company
- Port Waratah Coal Services - Australia
- Aboitiz Power Corporation - Philippines
- Globalindo Alam Lestari - Indonesia
- Bank of Tokyo Mitsubishi UFJ Ltd
- GMR Energy Limited - India
- Semirara Mining and Power Corporation, Philippines
- Holcim Trading Pte Ltd - Singapore
- Trasteel International SA, Italy
- Carbofer General Trading SA - India
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