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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, 10 April 15
US COAL PRODUCTION FELL 4.7% W-O-W : EIA
COALspot.com – United States the second largest coal producer in the world has produced approximately totaled an estimated 17.4 million short ...
Friday, 10 April 15
DRY BULK MARKET'S DOWNFALL ALSO OFFER INVESTMENT BARGAINS - NIKOS ROUSSANOGLOU, HELLENIC SHIPPING NEWS
Dry bulk market rates have fallen to historical lows over the past few weeks, with no clear path of recovery, at least in the near term. As such, m ...
Thursday, 09 April 15
CAPESIZE: RATES ARE STILL DISAPPOINTING - FEARNLEYS
Handy
The handy market had a stronger sentiment before the Easter holidays, but have as the bigger panamaxes seen a softening tendency this week. ...
Wednesday, 08 April 15
DRY BULK MARKET SEEMS UNABLE TO CATCH A BREAK - INTERMODAL
COALspot.com: The Dry Bulk market seems unable to catch a break these days.
According to Intermodal, following the market stabilization that p ...
Wednesday, 08 April 15
CHINA BURNS HALF OF THE WORLD'S COAL - CHRISTOPHER T. WHITTY
Intermodal Weekly Market Update
China is the world's largest consumer of coal, using more coal each year than the United States, the Europ ...
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- Neyveli Lignite Corporation Ltd, - India
- Romanian Commodities Exchange
- Directorate Of Revenue Intelligence - India
- Jindal Steel & Power Ltd - India
- TNB Fuel Sdn Bhd - Malaysia
- GAC Shipping (India) Pvt Ltd
- ASAPP Information Group - India
- Global Coal Blending Company Limited - Australia
- Maheswari Brothers Coal Limited - India
- LBH Netherlands Bv - Netherlands
- CIMB Investment Bank - Malaysia
- Barasentosa Lestari - Indonesia
- Georgia Ports Authority, United States
- Antam Resourcindo - Indonesia
- Electricity Generating Authority of Thailand
- IHS Mccloskey Coal Group - USA
- Dalmia Cement Bharat India
- Attock Cement Pakistan Limited
- The State Trading Corporation of India Ltd
- Planning Commission, India
- Kapuas Tunggal Persada - Indonesia
- Wood Mackenzie - Singapore
- Australian Commodity Traders Exchange
- Uttam Galva Steels Limited - India
- Siam City Cement - Thailand
- Edison Trading Spa - Italy
- Miang Besar Coal Terminal - Indonesia
- Kaltim Prima Coal - Indonesia
- Singapore Mercantile Exchange
- Semirara Mining Corp, Philippines
- Vizag Seaport Private Limited - India
- Bank of Tokyo Mitsubishi UFJ Ltd
- Offshore Bulk Terminal Pte Ltd, Singapore
- Energy Link Ltd, New Zealand
- IEA Clean Coal Centre - UK
- PNOC Exploration Corporation - Philippines
- PTC India Limited - India
- Price Waterhouse Coopers - Russia
- AsiaOL BioFuels Corp., Philippines
- Wilmar Investment Holdings
- SMC Global Power, Philippines
- PowerSource Philippines DevCo
- Kalimantan Lumbung Energi - Indonesia
- Kobexindo Tractors - Indoneisa
- Chamber of Mines of South Africa
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Essar Steel Hazira Ltd - India
- Orica Mining Services - Indonesia
- Bhushan Steel Limited - India
- Bhatia International Limited - India
- Karaikal Port Pvt Ltd - India
- TeaM Sual Corporation - Philippines
- Formosa Plastics Group - Taiwan
- Merrill Lynch Commodities Europe
- Bukit Baiduri Energy - Indonesia
- Vijayanagar Sugar Pvt Ltd - India
- OPG Power Generation Pvt Ltd - India
- Bayan Resources Tbk. - Indonesia
- Videocon Industries ltd - India
- Therma Luzon, Inc, Philippines
- Simpson Spence & Young - Indonesia
- Pipit Mutiara Jaya. PT, Indonesia
- Electricity Authority, New Zealand
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Central Electricity Authority - India
- Xindia Steels Limited - India
- Oldendorff Carriers - Singapore
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Orica Australia Pty. Ltd.
- Samtan Co., Ltd - South Korea
- Indo Tambangraya Megah - Indonesia
- Indogreen Group - Indonesia
- Carbofer General Trading SA - India
- Bhoruka Overseas - Indonesia
- Renaissance Capital - South Africa
- Australian Coal Association
- Petrochimia International Co. Ltd.- Taiwan
- Metalloyd Limited - United Kingdom
- Agrawal Coal Company - India
- Anglo American - United Kingdom
- Bahari Cakrawala Sebuku - Indonesia
- Tata Chemicals Ltd - India
- Ind-Barath Power Infra Limited - India
- Meralco Power Generation, Philippines
- Posco Energy - South Korea
- Globalindo Alam Lestari - Indonesia
- Coastal Gujarat Power Limited - India
- McConnell Dowell - Australia
- Savvy Resources Ltd - HongKong
- Meenaskhi Energy Private Limited - India
- Sakthi Sugars Limited - India
- Mercator Lines Limited - India
- Mjunction Services Limited - India
- Asmin Koalindo Tuhup - Indonesia
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- The Treasury - Australian Government
- GVK Power & Infra Limited - India
- Petron Corporation, Philippines
- Trasteel International SA, Italy
- Deloitte Consulting - India
- Sarangani Energy Corporation, Philippines
- Kohat Cement Company Ltd. - Pakistan
- Mintek Dendrill Indonesia
- Siam City Cement PLC, Thailand
- South Luzon Thermal Energy Corporation
- Energy Development Corp, Philippines
- Malabar Cements Ltd - India
- Intertek Mineral Services - Indonesia
- Binh Thuan Hamico - Vietnam
- Cement Manufacturers Association - India
- CNBM International Corporation - China
- Power Finance Corporation Ltd., India
- Vedanta Resources Plc - India
- Sojitz Corporation - Japan
- Indian Oil Corporation Limited
- Indika Energy - Indonesia
- Medco Energi Mining Internasional
- Parry Sugars Refinery, India
- Kartika Selabumi Mining - Indonesia
- Lanco Infratech Ltd - India
- Baramulti Group, Indonesia
- ICICI Bank Limited - India
- Bukit Asam (Persero) Tbk - Indonesia
- Semirara Mining and Power Corporation, Philippines
- Toyota Tsusho Corporation, Japan
- Thai Mozambique Logistica
- The University of Queensland
- Madhucon Powers Ltd - India
- Alfred C Toepfer International GmbH - Germany
- GN Power Mariveles Coal Plant, Philippines
- Billiton Holdings Pty Ltd - Australia
- Gujarat Mineral Development Corp Ltd - India
- Straits Asia Resources Limited - Singapore
- Chettinad Cement Corporation Ltd - India
- Borneo Indobara - Indonesia
- Salva Resources Pvt Ltd - India
- MS Steel International - UAE
- Bharathi Cement Corporation - India
- Commonwealth Bank - Australia
- Sinarmas Energy and Mining - Indonesia
- Tamil Nadu electricity Board
- Central Java Power - Indonesia
- Bukit Makmur.PT - Indonesia
- Bulk Trading Sa - Switzerland
- Indian Energy Exchange, India
- Gujarat Electricity Regulatory Commission - India
- San Jose City I Power Corp, Philippines
- Banpu Public Company Limited - Thailand
- New Zealand Coal & Carbon
- International Coal Ventures Pvt Ltd - India
- SN Aboitiz Power Inc, Philippines
- Directorate General of MIneral and Coal - Indonesia
- Rashtriya Ispat Nigam Limited - India
- White Energy Company Limited
- Ministry of Finance - Indonesia
- SMG Consultants - Indonesia
- Altura Mining Limited, Indonesia
- Economic Council, Georgia
- Ministry of Mines - Canada
- Kideco Jaya Agung - Indonesia
- Standard Chartered Bank - UAE
- Goldman Sachs - Singapore
- Coal and Oil Company - UAE
- Pendopo Energi Batubara - Indonesia
- Heidelberg Cement - Germany
- PetroVietnam Power Coal Import and Supply Company
- Mercuria Energy - Indonesia
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Larsen & Toubro Limited - India
- Grasim Industreis Ltd - India
- Global Green Power PLC Corporation, Philippines
- Africa Commodities Group - South Africa
- Eastern Coal Council - USA
- Minerals Council of Australia
- Jaiprakash Power Ventures ltd
- Ambuja Cements Ltd - India
- Bangladesh Power Developement Board
- Gujarat Sidhee Cement - India
- VISA Power Limited - India
- London Commodity Brokers - England
- Riau Bara Harum - Indonesia
- Aditya Birla Group - India
- European Bulk Services B.V. - Netherlands
- Ministry of Transport, Egypt
- Global Business Power Corporation, Philippines
- Ceylon Electricity Board - Sri Lanka
- Sree Jayajothi Cements Limited - India
- Rio Tinto Coal - Australia
- India Bulls Power Limited - India
- Thiess Contractors Indonesia
- Interocean Group of Companies - India
- Kepco SPC Power Corporation, Philippines
- Independent Power Producers Association of India
- Karbindo Abesyapradhi - Indoneisa
- Krishnapatnam Port Company Ltd. - India
- Coalindo Energy - Indonesia
- Iligan Light & Power Inc, Philippines
- Eastern Energy - Thailand
- Manunggal Multi Energi - Indonesia
- Jorong Barutama Greston.PT - Indonesia
- Timah Investasi Mineral - Indoneisa
- Aboitiz Power Corporation - Philippines
- GMR Energy Limited - India
- Makarim & Taira - Indonesia
- Kumho Petrochemical, South Korea
- Maharashtra Electricity Regulatory Commission - India
- Parliament of New Zealand
- Star Paper Mills Limited - India
- Sical Logistics Limited - India
- Port Waratah Coal Services - Australia
- Marubeni Corporation - India
- Indonesian Coal Mining Association
- Sindya Power Generating Company Private Ltd
- Cigading International Bulk Terminal - Indonesia
- Holcim Trading Pte Ltd - Singapore
- Leighton Contractors Pty Ltd - Australia
- Latin American Coal - Colombia
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