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Tuesday, 24 April 18
IMO AIMS TO HALVE GLOBAL SHIPPING EMISSIONS - BUT WHAT WILL IT COST? - WOOD MACKENZIE
Global bunker fuel costs could rise by up to US$60 billion annually from 2020, in a full compliance scenario, when the International Maritime Organization's (IMO) 0.5 wt% sulphur cap for bunker fuels kicks in.
Fuel oil, which is high in sulphur content, has traditionally been used by the shipping industry as bunker fuel. In 2017, global demand for high-sulphur fuel oil stood at over 70% of overall bunker fuels.
With the implementation of the IMO regulation in 2020, shippers will have to consider a switch to alternative fuels, such as Ultra Low Sulphur Fuel Oil (ULSFO) or marine gas oil (MGO), or install scrubbers, a system that removes sulphur from exhaust gas emitted by bunkers.
Installing scrubbers may be an economically attractive option. Although there is an initial investment, shippers can expect a rate of return of between 20% and 50% depending on investment cost, MGO-fuel oil spread and ships' fuel consumption. However, the penetration rate for scrubbers could be limited by a number of factors, including access to finance, scrubber manufacturing capacity and dry-dock space.
Demand from the bunker fuels market will total about 5.3 million b/d in 2020, according to Wood Mackenzie forecasts.
Based on pure ULSFO refinery streams, available ULSFO volumes in 2020 will total about 1.2 million b/d. This could be boosted by further blending ULSFO with vacuum gas oil (VGO) streams, but VGO is a valuable feedstock for the production of other lighter refinery products, and may not be readily available.
It is likely that MGO will help meet additional demand from the shipping sector. Wood Mackenzie estimates that this will see MGO demand rise by over 1 million b/d in 2020 in our base case outlook. Meeting this demand will require higher crude runs with residue upgrading units, particularly in the US and China, supporting an uplift in refining margins.
It also provides refiners, particularly in the US and China, the opportunity to capture the value of their ULSFO component streams and increase their share of the global bunker market.
Some refiners should see better profit margins as incremental demand for MGO rises, pushing up its price. Higher refining runs, required to meet additional MGO demand, could potentially push global gasoline market into surplus weakening gasoline prices. This could mean that the gasoline pain for some refiners could be more acute than the impact of weaker HSFO prices. Overall, we expect a material impact on refining economics post IMO and refiners must ensure they have a robust IMO strategy in place.
We also expect a shift in bunkering locations based on compliant fuels availability. Singapore, for example, could potentially lose some of its market share for bunker fuels to China as shippers look for alternative locations with a surplus of compliant fuels. China, with ample MGO supply, is well positioned to attract shippers.
New greenfield upgrading investments from refiners are unlikely to be purely driven by IMO regulation, and there is a need to look at longer-term rationale and strategic fit of these projects. Structural shifts in the fuel oil and gasoil markets may result in better economics, but that needs to be re-evaluated. For refiners choosing not to invest, the focus should be on infrastructure to capture the opportunity from their existing configuration and internal streams.
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Friday, 06 September 24
REBOUND IN OIL DEMAND COULD LIFT MARKET IN LATTER HALF OF 2024 - BIMCO
Supply/demand
Based on a strong second half demand, the supply/balance is forecast to strengthen in 2024 but weaken slightly in 2025 as n ...
Friday, 06 September 24
GLOBAL SEABORNE LNG TRADE HAS CONTINUED TO INCREASE LAST YEAR - BANCHERO COSTA
Global seaborne LNG trade has continued to increase last year, helped also by the events in Ukraine which forced Europe to diversify away from Russ ...
Wednesday, 28 August 24
SEABORNE COAL IMPORTS INTO INDIA INCREASED BY +9.9% Y-O-Y TO 146.6 MLN T - BANCHERO COSTA
Global coal trade has really picked up pace over the past year, and is now fully back to pre-Covid levels said Banchero Costa Research in its lates ...
Tuesday, 06 August 24
EXERCISE CAUTION WITH AMMONIA SWITCH - BALTIC EXCHANGE
A new study from the Massachusetts Institute of Technology (MIT) has thrown a spanner into the plan to transition ships from diesel fuel to ammonia ...
Friday, 02 August 24
ENERGY MARKET DEVELOPMENTS: COAL AND NATURAL GAS PRICES REACH RECORD HIGHS - WORLD BANK
The recent surge in natural gas and coal prices has been so swift that the main benchmarks were roughly three times higher in 2022Q2 compared to a ...
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- Cement Manufacturers Association - India
- Semirara Mining Corp, Philippines
- Eastern Energy - Thailand
- Australian Coal Association
- European Bulk Services B.V. - Netherlands
- Manunggal Multi Energi - Indonesia
- Bukit Makmur.PT - Indonesia
- Thiess Contractors Indonesia
- Deloitte Consulting - India
- Siam City Cement - Thailand
- Thai Mozambique Logistica
- Economic Council, Georgia
- Parry Sugars Refinery, India
- The State Trading Corporation of India Ltd
- Vizag Seaport Private Limited - India
- Maheswari Brothers Coal Limited - India
- Indian Energy Exchange, India
- Mercator Lines Limited - India
- Electricity Generating Authority of Thailand
- Jaiprakash Power Ventures ltd
- Bank of Tokyo Mitsubishi UFJ Ltd
- Central Electricity Authority - India
- AsiaOL BioFuels Corp., Philippines
- Directorate General of MIneral and Coal - Indonesia
- Straits Asia Resources Limited - Singapore
- Eastern Coal Council - USA
- Singapore Mercantile Exchange
- Agrawal Coal Company - India
- Petron Corporation, Philippines
- Globalindo Alam Lestari - Indonesia
- Krishnapatnam Port Company Ltd. - India
- Gujarat Sidhee Cement - India
- Bahari Cakrawala Sebuku - Indonesia
- Pendopo Energi Batubara - Indonesia
- Grasim Industreis Ltd - India
- Kepco SPC Power Corporation, Philippines
- Romanian Commodities Exchange
- Electricity Authority, New Zealand
- Karbindo Abesyapradhi - Indoneisa
- Ind-Barath Power Infra Limited - India
- Binh Thuan Hamico - Vietnam
- ICICI Bank Limited - India
- Planning Commission, India
- PNOC Exploration Corporation - Philippines
- Formosa Plastics Group - Taiwan
- Sinarmas Energy and Mining - Indonesia
- Posco Energy - South Korea
- Port Waratah Coal Services - Australia
- Therma Luzon, Inc, Philippines
- Oldendorff Carriers - Singapore
- ASAPP Information Group - India
- Siam City Cement PLC, Thailand
- Wood Mackenzie - Singapore
- San Jose City I Power Corp, Philippines
- Bhoruka Overseas - Indonesia
- Vijayanagar Sugar Pvt Ltd - India
- GVK Power & Infra Limited - India
- Coal and Oil Company - UAE
- Independent Power Producers Association of India
- Rio Tinto Coal - Australia
- Simpson Spence & Young - Indonesia
- Kideco Jaya Agung - Indonesia
- Central Java Power - Indonesia
- Global Coal Blending Company Limited - Australia
- Borneo Indobara - Indonesia
- Star Paper Mills Limited - India
- Maharashtra Electricity Regulatory Commission - India
- IHS Mccloskey Coal Group - USA
- Tamil Nadu electricity Board
- Merrill Lynch Commodities Europe
- Mercuria Energy - Indonesia
- PowerSource Philippines DevCo
- Kaltim Prima Coal - Indonesia
- Sarangani Energy Corporation, Philippines
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- CIMB Investment Bank - Malaysia
- International Coal Ventures Pvt Ltd - India
- Karaikal Port Pvt Ltd - India
- Interocean Group of Companies - India
- Medco Energi Mining Internasional
- Aboitiz Power Corporation - Philippines
- GAC Shipping (India) Pvt Ltd
- Sindya Power Generating Company Private Ltd
- Indonesian Coal Mining Association
- Salva Resources Pvt Ltd - India
- Ministry of Finance - Indonesia
- Uttam Galva Steels Limited - India
- Coastal Gujarat Power Limited - India
- Standard Chartered Bank - UAE
- LBH Netherlands Bv - Netherlands
- Bayan Resources Tbk. - Indonesia
- Orica Australia Pty. Ltd.
- Altura Mining Limited, Indonesia
- Larsen & Toubro Limited - India
- Price Waterhouse Coopers - Russia
- Bangladesh Power Developement Board
- Coalindo Energy - Indonesia
- Meralco Power Generation, Philippines
- Kobexindo Tractors - Indoneisa
- Sical Logistics Limited - India
- Banpu Public Company Limited - Thailand
- Metalloyd Limited - United Kingdom
- White Energy Company Limited
- Bhushan Steel Limited - India
- Antam Resourcindo - Indonesia
- PetroVietnam Power Coal Import and Supply Company
- McConnell Dowell - Australia
- Georgia Ports Authority, United States
- Ministry of Transport, Egypt
- Attock Cement Pakistan Limited
- Semirara Mining and Power Corporation, Philippines
- Madhucon Powers Ltd - India
- Jindal Steel & Power Ltd - India
- Wilmar Investment Holdings
- South Luzon Thermal Energy Corporation
- Bulk Trading Sa - Switzerland
- Bhatia International Limited - India
- Rashtriya Ispat Nigam Limited - India
- Trasteel International SA, Italy
- Ministry of Mines - Canada
- Tata Chemicals Ltd - India
- Makarim & Taira - Indonesia
- Latin American Coal - Colombia
- The University of Queensland
- Kalimantan Lumbung Energi - Indonesia
- Bukit Baiduri Energy - Indonesia
- Holcim Trading Pte Ltd - Singapore
- Chamber of Mines of South Africa
- Meenaskhi Energy Private Limited - India
- IEA Clean Coal Centre - UK
- Sojitz Corporation - Japan
- PTC India Limited - India
- Miang Besar Coal Terminal - Indonesia
- Xindia Steels Limited - India
- Kumho Petrochemical, South Korea
- Asmin Koalindo Tuhup - Indonesia
- Chettinad Cement Corporation Ltd - India
- Alfred C Toepfer International GmbH - Germany
- MS Steel International - UAE
- Indika Energy - Indonesia
- Global Green Power PLC Corporation, Philippines
- Cigading International Bulk Terminal - Indonesia
- Sree Jayajothi Cements Limited - India
- VISA Power Limited - India
- Ceylon Electricity Board - Sri Lanka
- Samtan Co., Ltd - South Korea
- Heidelberg Cement - Germany
- Malabar Cements Ltd - India
- GN Power Mariveles Coal Plant, Philippines
- Goldman Sachs - Singapore
- Offshore Bulk Terminal Pte Ltd, Singapore
- Gujarat Electricity Regulatory Commission - India
- Energy Development Corp, Philippines
- Parliament of New Zealand
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- SN Aboitiz Power Inc, Philippines
- Jorong Barutama Greston.PT - Indonesia
- The Treasury - Australian Government
- Toyota Tsusho Corporation, Japan
- Gujarat Mineral Development Corp Ltd - India
- Edison Trading Spa - Italy
- Videocon Industries ltd - India
- Neyveli Lignite Corporation Ltd, - India
- London Commodity Brokers - England
- Australian Commodity Traders Exchange
- TeaM Sual Corporation - Philippines
- Indogreen Group - Indonesia
- Pipit Mutiara Jaya. PT, Indonesia
- Essar Steel Hazira Ltd - India
- Billiton Holdings Pty Ltd - Australia
- Marubeni Corporation - India
- New Zealand Coal & Carbon
- Aditya Birla Group - India
- Energy Link Ltd, New Zealand
- Mjunction Services Limited - India
- Bukit Asam (Persero) Tbk - Indonesia
- Kartika Selabumi Mining - Indonesia
- Intertek Mineral Services - Indonesia
- Leighton Contractors Pty Ltd - Australia
- Baramulti Group, Indonesia
- OPG Power Generation Pvt Ltd - India
- Renaissance Capital - South Africa
- Dalmia Cement Bharat India
- TNB Fuel Sdn Bhd - Malaysia
- Iligan Light & Power Inc, Philippines
- Bharathi Cement Corporation - India
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Sakthi Sugars Limited - India
- Kapuas Tunggal Persada - Indonesia
- Power Finance Corporation Ltd., India
- Commonwealth Bank - Australia
- SMG Consultants - Indonesia
- SMC Global Power, Philippines
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Africa Commodities Group - South Africa
- Petrochimia International Co. Ltd.- Taiwan
- GMR Energy Limited - India
- Savvy Resources Ltd - HongKong
- Kohat Cement Company Ltd. - Pakistan
- Directorate Of Revenue Intelligence - India
- Mintek Dendrill Indonesia
- Asia Pacific Energy Resources Ventures Inc, Philippines
- CNBM International Corporation - China
- Orica Mining Services - Indonesia
- Lanco Infratech Ltd - India
- Riau Bara Harum - Indonesia
- Indian Oil Corporation Limited
- Anglo American - United Kingdom
- Indo Tambangraya Megah - Indonesia
- Carbofer General Trading SA - India
- Ambuja Cements Ltd - India
- Barasentosa Lestari - Indonesia
- India Bulls Power Limited - India
- Minerals Council of Australia
- Global Business Power Corporation, Philippines
- Timah Investasi Mineral - Indoneisa
- Vedanta Resources Plc - India
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