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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 $48.35 per mile to embody the cost of burning 0.1% Gasoil within the SECAs, compared to the 380 CST fuel oil grade delivered basis Rotterdam used to calculate Worldscale flat rates. Ship-Owners and brokers are incorporating new ways to negotiate the additional emerged costs into their charter contracts. The definition of these costs or which party should carry their burden, nevertheless still remains ambiguous.
To conclude with, the main industry debate is that of the ability of implementation of these new regulations rather than that of compliance. In essence, Owners need to evaluate any return on investment in new technology with the risks and remarkable increased costs of higher price of low-Sulphur fuel, but also the cost of technological failure caused by burning low-Sulphur fuel. In the longer term, the staging of compliance will most probably adjust to market conditions.
By Katerina Restis
Tanker Chartering
Compiled by:
Intermodal Research & Valuations
Analysts:
Ms. Eva Tzima
Disclaimer and legal disclosure: For any further queries please do not hesitate to contact our Research & Valuations Department. The information contained in this report has been obtained from various sources, as reported in the market. Intermodal Shipbrokers Co. believes such information to be factual and reliable without making guarantees regarding its accuracy or completeness. Whilst every care has been taken in the production of the above review, no liability can be accepted for any loss or damage incurred in any way whatsoever by any person who may seek to rely on the information and views contained in this material. This report is being produced for the internal use of the intended recipients only and no re-producing is allowed, without the prior written authorization of Intermodal Shipbrokers Co.
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Monday, 20 April 15
Q4' 2015 API 8 CFR SOUTH CHINA COAL SWAP CLOSED US$ 50.28 PMT
COALspot.com: API 8 CFR South China Coal swap for Q2’ 2015 delivery declined US$ 4.03 (-7.28%) per MT month over month and US$ 0.05 (-0 ...
Sunday, 19 April 15
THE OCEAN FREIGHT MARKET SHOWED STEADY THIS WEEK
COALspot.com: The freight market was fairly steady this week. The BDI was up 2.93% to 597 points week over week. The cape index was also increased ...
Friday, 17 April 15
IHS ENERGY EUROPEAN COAL OUTLOOK CONFERENCE
Attend the IHS Energy European Coal Outlook Conference 19-20 May in Nice, France and learn about timely concerns in today’s coal industry.
...
Friday, 17 April 15
COAL PRODUCTION IN THE U.S. UP THIS PAST WEEK - EIA
COALspot.com – United States the second largest coal producer in the world has produced approximately totaled an estimated 18.0 million short ...
Thursday, 16 April 15
NEW COMMODITY SUPERHIGHWAY WILL EMERGE IN CHINA, ALTERING ENERGY TRADE FLOWS - WOOD MACKENZIE
Wood Mackenzie says that China’s Go West strategy – encouraging coastal to inland flow of capital and people - will result in the forma ...
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- Miang Besar Coal Terminal - Indonesia
- Heidelberg Cement - Germany
- Power Finance Corporation Ltd., India
- Wood Mackenzie - Singapore
- Energy Development Corp, Philippines
- Kepco SPC Power Corporation, Philippines
- Singapore Mercantile Exchange
- Jorong Barutama Greston.PT - Indonesia
- Directorate Of Revenue Intelligence - India
- Toyota Tsusho Corporation, Japan
- TNB Fuel Sdn Bhd - Malaysia
- Sojitz Corporation - Japan
- Agrawal Coal Company - India
- Metalloyd Limited - United Kingdom
- Dalmia Cement Bharat India
- Coastal Gujarat Power Limited - India
- Karaikal Port Pvt Ltd - India
- Petrochimia International Co. Ltd.- Taiwan
- Edison Trading Spa - Italy
- Semirara Mining and Power Corporation, Philippines
- Petron Corporation, Philippines
- Indonesian Coal Mining Association
- Kumho Petrochemical, South Korea
- Standard Chartered Bank - UAE
- ICICI Bank Limited - India
- OPG Power Generation Pvt Ltd - India
- Port Waratah Coal Services - Australia
- McConnell Dowell - Australia
- Coalindo Energy - Indonesia
- IHS Mccloskey Coal Group - USA
- Savvy Resources Ltd - HongKong
- Bayan Resources Tbk. - Indonesia
- Banpu Public Company Limited - Thailand
- Sindya Power Generating Company Private Ltd
- Price Waterhouse Coopers - Russia
- Cigading International Bulk Terminal - Indonesia
- CIMB Investment Bank - Malaysia
- Kaltim Prima Coal - Indonesia
- Intertek Mineral Services - Indonesia
- TeaM Sual Corporation - Philippines
- Sarangani Energy Corporation, Philippines
- Bukit Asam (Persero) Tbk - Indonesia
- Electricity Generating Authority of Thailand
- GMR Energy Limited - India
- Bangladesh Power Developement Board
- Indo Tambangraya Megah - Indonesia
- Planning Commission, India
- Australian Coal Association
- SN Aboitiz Power Inc, Philippines
- Mercator Lines Limited - India
- Alfred C Toepfer International GmbH - Germany
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Bank of Tokyo Mitsubishi UFJ Ltd
- Binh Thuan Hamico - Vietnam
- Romanian Commodities Exchange
- Global Green Power PLC Corporation, Philippines
- Borneo Indobara - Indonesia
- Indian Oil Corporation Limited
- London Commodity Brokers - England
- Tata Chemicals Ltd - India
- Essar Steel Hazira Ltd - India
- Oldendorff Carriers - Singapore
- The State Trading Corporation of India Ltd
- Anglo American - United Kingdom
- Mintek Dendrill Indonesia
- Timah Investasi Mineral - Indoneisa
- European Bulk Services B.V. - Netherlands
- Parry Sugars Refinery, India
- White Energy Company Limited
- Indika Energy - Indonesia
- Makarim & Taira - Indonesia
- PowerSource Philippines DevCo
- Holcim Trading Pte Ltd - Singapore
- Billiton Holdings Pty Ltd - Australia
- Directorate General of MIneral and Coal - Indonesia
- Bahari Cakrawala Sebuku - Indonesia
- Gujarat Sidhee Cement - India
- SMG Consultants - Indonesia
- Deloitte Consulting - India
- Riau Bara Harum - Indonesia
- Leighton Contractors Pty Ltd - Australia
- Coal and Oil Company - UAE
- Cement Manufacturers Association - India
- Siam City Cement PLC, Thailand
- Economic Council, Georgia
- Central Java Power - Indonesia
- GAC Shipping (India) Pvt Ltd
- Baramulti Group, Indonesia
- Ind-Barath Power Infra Limited - India
- Wilmar Investment Holdings
- GVK Power & Infra Limited - India
- IEA Clean Coal Centre - UK
- ASAPP Information Group - India
- Star Paper Mills Limited - India
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Global Coal Blending Company Limited - Australia
- Global Business Power Corporation, Philippines
- Bhoruka Overseas - Indonesia
- Semirara Mining Corp, Philippines
- Bhatia International Limited - India
- PTC India Limited - India
- Aboitiz Power Corporation - Philippines
- Energy Link Ltd, New Zealand
- Mercuria Energy - Indonesia
- Jaiprakash Power Ventures ltd
- Ministry of Mines - Canada
- Rashtriya Ispat Nigam Limited - India
- Kapuas Tunggal Persada - Indonesia
- CNBM International Corporation - China
- Pipit Mutiara Jaya. PT, Indonesia
- Australian Commodity Traders Exchange
- Orica Mining Services - Indonesia
- Ambuja Cements Ltd - India
- Krishnapatnam Port Company Ltd. - India
- South Luzon Thermal Energy Corporation
- Medco Energi Mining Internasional
- Ministry of Transport, Egypt
- Sical Logistics Limited - India
- Parliament of New Zealand
- Lanco Infratech Ltd - India
- Ministry of Finance - Indonesia
- Africa Commodities Group - South Africa
- Chettinad Cement Corporation Ltd - India
- Salva Resources Pvt Ltd - India
- Formosa Plastics Group - Taiwan
- Thai Mozambique Logistica
- The Treasury - Australian Government
- Ceylon Electricity Board - Sri Lanka
- Vijayanagar Sugar Pvt Ltd - India
- Simpson Spence & Young - Indonesia
- Electricity Authority, New Zealand
- Posco Energy - South Korea
- International Coal Ventures Pvt Ltd - India
- Kartika Selabumi Mining - Indonesia
- MS Steel International - UAE
- San Jose City I Power Corp, Philippines
- Meenaskhi Energy Private Limited - India
- Maharashtra Electricity Regulatory Commission - India
- Minerals Council of Australia
- Goldman Sachs - Singapore
- Sinarmas Energy and Mining - Indonesia
- VISA Power Limited - India
- SMC Global Power, Philippines
- Antam Resourcindo - Indonesia
- Bharathi Cement Corporation - India
- Neyveli Lignite Corporation Ltd, - India
- Vizag Seaport Private Limited - India
- Samtan Co., Ltd - South Korea
- Bulk Trading Sa - Switzerland
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Renaissance Capital - South Africa
- Therma Luzon, Inc, Philippines
- Kohat Cement Company Ltd. - Pakistan
- Larsen & Toubro Limited - India
- Barasentosa Lestari - Indonesia
- Indogreen Group - Indonesia
- Interocean Group of Companies - India
- Siam City Cement - Thailand
- Marubeni Corporation - India
- Malabar Cements Ltd - India
- Gujarat Electricity Regulatory Commission - India
- AsiaOL BioFuels Corp., Philippines
- India Bulls Power Limited - India
- Mjunction Services Limited - India
- PetroVietnam Power Coal Import and Supply Company
- Karbindo Abesyapradhi - Indoneisa
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Indian Energy Exchange, India
- Orica Australia Pty. Ltd.
- Manunggal Multi Energi - Indonesia
- The University of Queensland
- Attock Cement Pakistan Limited
- Offshore Bulk Terminal Pte Ltd, Singapore
- Sakthi Sugars Limited - India
- Iligan Light & Power Inc, Philippines
- Eastern Coal Council - USA
- PNOC Exploration Corporation - Philippines
- Meralco Power Generation, Philippines
- Asmin Koalindo Tuhup - Indonesia
- Kalimantan Lumbung Energi - Indonesia
- Thiess Contractors Indonesia
- Rio Tinto Coal - Australia
- Trasteel International SA, Italy
- Gujarat Mineral Development Corp Ltd - India
- Madhucon Powers Ltd - India
- Central Electricity Authority - India
- Bukit Baiduri Energy - Indonesia
- Carbofer General Trading SA - India
- Chamber of Mines of South Africa
- Tamil Nadu electricity Board
- Globalindo Alam Lestari - Indonesia
- Bhushan Steel Limited - India
- Altura Mining Limited, Indonesia
- Videocon Industries ltd - India
- Pendopo Energi Batubara - Indonesia
- Eastern Energy - Thailand
- Xindia Steels Limited - India
- LBH Netherlands Bv - Netherlands
- Merrill Lynch Commodities Europe
- Latin American Coal - Colombia
- Bukit Makmur.PT - Indonesia
- GN Power Mariveles Coal Plant, Philippines
- Kobexindo Tractors - Indoneisa
- Uttam Galva Steels Limited - India
- Georgia Ports Authority, United States
- Vedanta Resources Plc - India
- Sree Jayajothi Cements Limited - India
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Aditya Birla Group - India
- Kideco Jaya Agung - Indonesia
- Maheswari Brothers Coal Limited - India
- Straits Asia Resources Limited - Singapore
- Grasim Industreis Ltd - India
- New Zealand Coal & Carbon
- Jindal Steel & Power Ltd - India
- Commonwealth Bank - Australia
- Independent Power Producers Association of India
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