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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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Wednesday, 22 April 15
TANKER MARKET INSIGHT - STRATOS TINIAKOS
The current environment we experience as a result of low crude oil prices is characterized by the increased demand for petroleum products in OECD c ...
Tuesday, 21 April 15
SUB-BIT FOB INDONESIA COAL SWAP: GAINED W-O-W; DECLINED M-O-M
COALspot.com: Indonesian coal swap for delivery Q2 2015 gained week over week and declined month on month.
The Q2 swap was declined US$ 1.75 ( ...
Tuesday, 21 April 15
FOB RICHARDS BAY COAL SWAP MOVE UP SLIGHTLY
COALspot.com: API4 FOB Richards Bay Coal swap for delivery Q2' 2015 increased slightly month over month.
The Q2 swap has increased US$ 0.2 ...
Monday, 20 April 15
BUKIT ASAM TAKES OVER STAKE IN JV FROM RAJAWALI - JP
State-owned coal miner PT Bukit Asam (PTBA) announced Friday that it had taken over almost the entire stake in a joint venture (JV) that it created ...
Monday, 20 April 15
FOB NEWCASTLE COAL SWAP GAINED WEEK ON WEEK
COALspot.com: API 5 FOB Newcastle Coal swap for Q2’ 2015 delivery declined US$ 3.54 per MT (-7.21%) month over month and gained US$ 0.30 week ...
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- AsiaOL BioFuels Corp., Philippines
- Billiton Holdings Pty Ltd - Australia
- SMC Global Power, Philippines
- Bukit Asam (Persero) Tbk - Indonesia
- Bahari Cakrawala Sebuku - Indonesia
- Petron Corporation, Philippines
- Madhucon Powers Ltd - India
- Port Waratah Coal Services - Australia
- Eastern Coal Council - USA
- Sical Logistics Limited - India
- New Zealand Coal & Carbon
- Planning Commission, India
- Cement Manufacturers Association - India
- Meralco Power Generation, Philippines
- Kaltim Prima Coal - Indonesia
- Neyveli Lignite Corporation Ltd, - India
- Global Business Power Corporation, Philippines
- Marubeni Corporation - India
- Commonwealth Bank - Australia
- San Jose City I Power Corp, Philippines
- Bangladesh Power Developement Board
- Jindal Steel & Power Ltd - India
- Metalloyd Limited - United Kingdom
- Karaikal Port Pvt Ltd - India
- Alfred C Toepfer International GmbH - Germany
- PNOC Exploration Corporation - Philippines
- Antam Resourcindo - Indonesia
- Global Green Power PLC Corporation, Philippines
- Manunggal Multi Energi - Indonesia
- VISA Power Limited - India
- Formosa Plastics Group - Taiwan
- Anglo American - United Kingdom
- Meenaskhi Energy Private Limited - India
- Binh Thuan Hamico - Vietnam
- GN Power Mariveles Coal Plant, Philippines
- Indika Energy - Indonesia
- Australian Commodity Traders Exchange
- Bukit Baiduri Energy - Indonesia
- Bhatia International Limited - India
- Gujarat Electricity Regulatory Commission - India
- Simpson Spence & Young - Indonesia
- Oldendorff Carriers - Singapore
- Edison Trading Spa - Italy
- PetroVietnam Power Coal Import and Supply Company
- Salva Resources Pvt Ltd - India
- Semirara Mining and Power Corporation, Philippines
- The State Trading Corporation of India Ltd
- Kohat Cement Company Ltd. - Pakistan
- PowerSource Philippines DevCo
- Indian Energy Exchange, India
- Romanian Commodities Exchange
- Thiess Contractors Indonesia
- LBH Netherlands Bv - Netherlands
- Malabar Cements Ltd - India
- Coal and Oil Company - UAE
- Posco Energy - South Korea
- European Bulk Services B.V. - Netherlands
- Electricity Authority, New Zealand
- Bank of Tokyo Mitsubishi UFJ Ltd
- Orica Mining Services - Indonesia
- Vijayanagar Sugar Pvt Ltd - India
- Barasentosa Lestari - Indonesia
- Sarangani Energy Corporation, Philippines
- Electricity Generating Authority of Thailand
- Indogreen Group - Indonesia
- Petrochimia International Co. Ltd.- Taiwan
- Sindya Power Generating Company Private Ltd
- Kartika Selabumi Mining - Indonesia
- Uttam Galva Steels Limited - India
- London Commodity Brokers - England
- Ministry of Transport, Egypt
- Tamil Nadu electricity Board
- IHS Mccloskey Coal Group - USA
- Renaissance Capital - South Africa
- Videocon Industries ltd - India
- Goldman Sachs - Singapore
- Indian Oil Corporation Limited
- Bharathi Cement Corporation - India
- Ind-Barath Power Infra Limited - India
- Riau Bara Harum - Indonesia
- Merrill Lynch Commodities Europe
- SN Aboitiz Power Inc, Philippines
- CIMB Investment Bank - Malaysia
- Thai Mozambique Logistica
- Krishnapatnam Port Company Ltd. - India
- Rashtriya Ispat Nigam Limited - India
- Makarim & Taira - Indonesia
- Dalmia Cement Bharat India
- OPG Power Generation Pvt Ltd - India
- Directorate Of Revenue Intelligence - India
- Sojitz Corporation - Japan
- Semirara Mining Corp, Philippines
- Jorong Barutama Greston.PT - Indonesia
- Kumho Petrochemical, South Korea
- Kalimantan Lumbung Energi - Indonesia
- Essar Steel Hazira Ltd - India
- Sinarmas Energy and Mining - Indonesia
- Gujarat Sidhee Cement - India
- Parliament of New Zealand
- Global Coal Blending Company Limited - Australia
- Lanco Infratech Ltd - India
- Straits Asia Resources Limited - Singapore
- Miang Besar Coal Terminal - Indonesia
- Bayan Resources Tbk. - Indonesia
- Central Java Power - Indonesia
- Intertek Mineral Services - Indonesia
- Sakthi Sugars Limited - India
- Ministry of Finance - Indonesia
- GMR Energy Limited - India
- Timah Investasi Mineral - Indoneisa
- Larsen & Toubro Limited - India
- Globalindo Alam Lestari - Indonesia
- Australian Coal Association
- Vizag Seaport Private Limited - India
- Deloitte Consulting - India
- Chamber of Mines of South Africa
- Pipit Mutiara Jaya. PT, Indonesia
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Coalindo Energy - Indonesia
- Singapore Mercantile Exchange
- Orica Australia Pty. Ltd.
- Medco Energi Mining Internasional
- ICICI Bank Limited - India
- Toyota Tsusho Corporation, Japan
- Minerals Council of Australia
- Baramulti Group, Indonesia
- The Treasury - Australian Government
- GVK Power & Infra Limited - India
- Leighton Contractors Pty Ltd - Australia
- The University of Queensland
- Altura Mining Limited, Indonesia
- TeaM Sual Corporation - Philippines
- Central Electricity Authority - India
- Economic Council, Georgia
- Wilmar Investment Holdings
- Latin American Coal - Colombia
- Wood Mackenzie - Singapore
- Energy Link Ltd, New Zealand
- Jaiprakash Power Ventures ltd
- Eastern Energy - Thailand
- Tata Chemicals Ltd - India
- Africa Commodities Group - South Africa
- Bhoruka Overseas - Indonesia
- Banpu Public Company Limited - Thailand
- Therma Luzon, Inc, Philippines
- Xindia Steels Limited - India
- Bulk Trading Sa - Switzerland
- Directorate General of MIneral and Coal - Indonesia
- Indonesian Coal Mining Association
- Georgia Ports Authority, United States
- Siam City Cement PLC, Thailand
- Kideco Jaya Agung - Indonesia
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Ambuja Cements Ltd - India
- Chettinad Cement Corporation Ltd - India
- Parry Sugars Refinery, India
- Ceylon Electricity Board - Sri Lanka
- Agrawal Coal Company - India
- Maharashtra Electricity Regulatory Commission - India
- Mintek Dendrill Indonesia
- Offshore Bulk Terminal Pte Ltd, Singapore
- Asmin Koalindo Tuhup - Indonesia
- Price Waterhouse Coopers - Russia
- Mjunction Services Limited - India
- Independent Power Producers Association of India
- Samtan Co., Ltd - South Korea
- Star Paper Mills Limited - India
- SMG Consultants - Indonesia
- Bukit Makmur.PT - Indonesia
- Grasim Industreis Ltd - India
- Trasteel International SA, Italy
- PTC India Limited - India
- Savvy Resources Ltd - HongKong
- Standard Chartered Bank - UAE
- Borneo Indobara - Indonesia
- Mercuria Energy - Indonesia
- Kobexindo Tractors - Indoneisa
- Holcim Trading Pte Ltd - Singapore
- Kapuas Tunggal Persada - Indonesia
- Aditya Birla Group - India
- Bhushan Steel Limited - India
- Aboitiz Power Corporation - Philippines
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Interocean Group of Companies - India
- Coastal Gujarat Power Limited - India
- Vedanta Resources Plc - India
- Heidelberg Cement - Germany
- GAC Shipping (India) Pvt Ltd
- MS Steel International - UAE
- Sree Jayajothi Cements Limited - India
- Attock Cement Pakistan Limited
- International Coal Ventures Pvt Ltd - India
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- India Bulls Power Limited - India
- TNB Fuel Sdn Bhd - Malaysia
- Power Finance Corporation Ltd., India
- ASAPP Information Group - India
- Karbindo Abesyapradhi - Indoneisa
- Energy Development Corp, Philippines
- Mercator Lines Limited - India
- Cigading International Bulk Terminal - Indonesia
- South Luzon Thermal Energy Corporation
- McConnell Dowell - Australia
- Pendopo Energi Batubara - Indonesia
- IEA Clean Coal Centre - UK
- Iligan Light & Power Inc, Philippines
- Maheswari Brothers Coal Limited - India
- White Energy Company Limited
- Ministry of Mines - Canada
- Rio Tinto Coal - Australia
- Gujarat Mineral Development Corp Ltd - India
- Kepco SPC Power Corporation, Philippines
- Siam City Cement - Thailand
- Carbofer General Trading SA - India
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- CNBM International Corporation - China
- Indo Tambangraya Megah - Indonesia
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