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Wednesday, 25 July 18
TANKER MARKET INSIGHT - DIMITRIS KOURTESIS
 We are now into the second half of 2018, which so far has not been a fruitful year for tankers. With 2020 quickly approaching we need to consider the implications arising from the new fuel directives. 2020 seems to be the year that there will be a noticeable increase in the cost of moving cargo, with the forces driving costs upwards being either scrubbers and/or the increased demand for cleaner fuels.
The need for cleaner fuels will not only boost demand for product tankers though. Given the much higher crude oil quantities the production of these cleaner fuels requires compared to HFO, a boost in crude oil demand and a consequent support on crude tanker freight rates appears to also be in the cards.
The increase in fuel costs will definitely increase revenues but not profits. Therefore small owners with older, less efficient units, not capable of installing scrubbers, will be forced to either merge with larger companies, who have the cash flow to support financing, or in some cases will have to sell/ scrap and exit the industry. This filtering process will separate companies that managed to evolve and endure through the cycle and concurrently will correct the oversupply of tonnage, which drives rates in some cases well below their operating expenses today.
Vessels equipped with scrubbers or eco units will have a competitive advantage and owners will be able to fix periods at levels including a premium, as charterers will prefer to charter compliant and fuel efficient units. The market right now for a 1 year time charter, medium range non eco / non scrubber equipped tanker trading in clean petroleum products is around USD 13,000 per day. On the other hand, an eco/scrubber equipped unit would get approximately USD 14,500 - 15,000 per day for the same period.
We can identify that the difference of USD 1,500 - 2,000 per day is the premium charterers are paying in order to be 2020 compliant and have efficient units under their time charter. Apart from Ship owners/operators and charterers, it's also quite interesting to see how modern refineries are getting prepared for these changes. According to HSBC's research on IMO 2020, four of the most technically advanced refineries, S-oil, SK Innovation, Reliance Industries and Repsol are further upgrading and investing in their plants. They target to eliminate their HFO production by early to mid-2020. Specifically, SKI will focus on refining only very low sulphur fuel oil (VLSFO). The goal of these refineries is to find themselves in a position where, come 2020, they have substantially decreased– or even better entirely eliminated – the production of HFO.
Mr. T. Veniamis on behalf of the Union of Greek Ship Owners, stated that Greek ship owners are working hard to comply with the 2020 requirements (0.5% sulfur cap). He also stressed the importance that these cleaner fuels are – aside from compliant – also safe for both the crew and the ship itself. To conclude, the general sentiment particularly for Owners with units up to MR size without scrubbers, is to patiently wait and plan day by day, as the investment of installing scrubbers on older units may not make financial sense given today’s fundamentals.
By Dimitris Kourtesis
Tanker Chartering Broker
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 reproducing is allowed, without the prior written authorization of Intermodal Shipbrokers Co.
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Tuesday, 13 November 18
INDIA: POWER DEMAND UP; COAL STOCKS AT MINES AT A 5-YEAR LOW - FINANCIAL EXPRESS
Stocks at Coal India mines plunged to a five-year low of 21 million tonne (mt) in October, as a sudden surge in demand for the fuel from the power ...
Monday, 12 November 18
COAL BUSINESS REMAINS PROSPECTIVE - ANTARA
Coal business happened to be sluggish in the 2012-2015 period because coal prices in the world market fell sharply, but it has begun to crawl up si ...
Monday, 12 November 18
INDONESIA'S HBA ENDS DECLINE IN NOVEMBER
COALspot.com: The Ministry of Energy and Mineral Resources of the Republic of Indonesia has revised down the benchmark price of Indonesian thermal ...
Wednesday, 07 November 18
SHIPPING MARKET INSIGHT - VASILIS MOIRIS
This has been another active week in the second-hand market for both the dry bulk and tanker sectors. Buying interest has recently increased, which ...
Monday, 05 November 18
TIGHTER FUEL RULES COULD RAISE SHIPOWNERS' COSTS AND CAPEX - FITCH RATINGS
More stringent fuel regulations regarding sulphur content could significantly increase global shipping companies’ operating costs and capex n ...
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- Wilmar Investment Holdings
- Global Business Power Corporation, Philippines
- Globalindo Alam Lestari - Indonesia
- Thiess Contractors Indonesia
- GN Power Mariveles Coal Plant, Philippines
- Kartika Selabumi Mining - Indonesia
- Indika Energy - Indonesia
- Indo Tambangraya Megah - Indonesia
- Iligan Light & Power Inc, Philippines
- Gujarat Mineral Development Corp Ltd - India
- Barasentosa Lestari - Indonesia
- Kobexindo Tractors - Indoneisa
- CIMB Investment Bank - Malaysia
- Bulk Trading Sa - Switzerland
- Electricity Generating Authority of Thailand
- Chamber of Mines of South Africa
- Bukit Makmur.PT - Indonesia
- Billiton Holdings Pty Ltd - Australia
- Altura Mining Limited, Indonesia
- ICICI Bank Limited - India
- Alfred C Toepfer International GmbH - Germany
- Kapuas Tunggal Persada - Indonesia
- PNOC Exploration Corporation - Philippines
- Orica Mining Services - Indonesia
- Sojitz Corporation - Japan
- Meenaskhi Energy Private Limited - India
- Petron Corporation, Philippines
- SMG Consultants - Indonesia
- GVK Power & Infra Limited - India
- Sinarmas Energy and Mining - Indonesia
- Indian Oil Corporation Limited
- Coalindo Energy - Indonesia
- Global Coal Blending Company Limited - Australia
- Salva Resources Pvt Ltd - India
- Kalimantan Lumbung Energi - Indonesia
- Makarim & Taira - Indonesia
- Miang Besar Coal Terminal - Indonesia
- Maharashtra Electricity Regulatory Commission - India
- San Jose City I Power Corp, Philippines
- Banpu Public Company Limited - Thailand
- Borneo Indobara - Indonesia
- Simpson Spence & Young - Indonesia
- Uttam Galva Steels Limited - India
- OPG Power Generation Pvt Ltd - India
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Jorong Barutama Greston.PT - Indonesia
- Toyota Tsusho Corporation, Japan
- Wood Mackenzie - Singapore
- Energy Development Corp, Philippines
- SMC Global Power, Philippines
- Timah Investasi Mineral - Indoneisa
- Kohat Cement Company Ltd. - Pakistan
- Standard Chartered Bank - UAE
- Sarangani Energy Corporation, Philippines
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Jaiprakash Power Ventures ltd
- The University of Queensland
- Coal and Oil Company - UAE
- Ambuja Cements Ltd - India
- White Energy Company Limited
- Vedanta Resources Plc - India
- Thai Mozambique Logistica
- Sree Jayajothi Cements Limited - India
- Manunggal Multi Energi - Indonesia
- Posco Energy - South Korea
- Leighton Contractors Pty Ltd - Australia
- Anglo American - United Kingdom
- IEA Clean Coal Centre - UK
- Bhatia International Limited - India
- Bukit Baiduri Energy - Indonesia
- Australian Coal Association
- Kumho Petrochemical, South Korea
- Bharathi Cement Corporation - India
- Power Finance Corporation Ltd., India
- Marubeni Corporation - India
- Georgia Ports Authority, United States
- Parliament of New Zealand
- Semirara Mining Corp, Philippines
- Latin American Coal - Colombia
- Therma Luzon, Inc, Philippines
- Mintek Dendrill Indonesia
- India Bulls Power Limited - India
- Larsen & Toubro Limited - India
- Central Electricity Authority - India
- Port Waratah Coal Services - Australia
- Ceylon Electricity Board - Sri Lanka
- Price Waterhouse Coopers - Russia
- Karbindo Abesyapradhi - Indoneisa
- New Zealand Coal & Carbon
- Asmin Koalindo Tuhup - Indonesia
- Sakthi Sugars Limited - India
- Cigading International Bulk Terminal - Indonesia
- Trasteel International SA, Italy
- Rio Tinto Coal - Australia
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Bhushan Steel Limited - India
- European Bulk Services B.V. - Netherlands
- PowerSource Philippines DevCo
- Economic Council, Georgia
- Indogreen Group - Indonesia
- Bhoruka Overseas - Indonesia
- Agrawal Coal Company - India
- Malabar Cements Ltd - India
- Grasim Industreis Ltd - India
- Interocean Group of Companies - India
- Neyveli Lignite Corporation Ltd, - India
- Kideco Jaya Agung - Indonesia
- Maheswari Brothers Coal Limited - India
- Singapore Mercantile Exchange
- Parry Sugars Refinery, India
- Orica Australia Pty. Ltd.
- Eastern Energy - Thailand
- Australian Commodity Traders Exchange
- Kaltim Prima Coal - Indonesia
- Mercator Lines Limited - India
- Attock Cement Pakistan Limited
- Siam City Cement PLC, Thailand
- Carbofer General Trading SA - India
- Xindia Steels Limited - India
- The Treasury - Australian Government
- Independent Power Producers Association of India
- VISA Power Limited - India
- Romanian Commodities Exchange
- Medco Energi Mining Internasional
- Renaissance Capital - South Africa
- Lanco Infratech Ltd - India
- ASAPP Information Group - India
- Bangladesh Power Developement Board
- Samtan Co., Ltd - South Korea
- Pipit Mutiara Jaya. PT, Indonesia
- AsiaOL BioFuels Corp., Philippines
- Riau Bara Harum - Indonesia
- Ministry of Transport, Egypt
- Semirara Mining and Power Corporation, Philippines
- Africa Commodities Group - South Africa
- Videocon Industries ltd - India
- Kepco SPC Power Corporation, Philippines
- Essar Steel Hazira Ltd - India
- McConnell Dowell - Australia
- Tamil Nadu electricity Board
- Rashtriya Ispat Nigam Limited - India
- Electricity Authority, New Zealand
- London Commodity Brokers - England
- MS Steel International - UAE
- Star Paper Mills Limited - India
- Planning Commission, India
- Mjunction Services Limited - India
- Cement Manufacturers Association - India
- Goldman Sachs - Singapore
- Ind-Barath Power Infra Limited - India
- Merrill Lynch Commodities Europe
- Directorate General of MIneral and Coal - Indonesia
- Formosa Plastics Group - Taiwan
- Jindal Steel & Power Ltd - India
- PTC India Limited - India
- Bukit Asam (Persero) Tbk - Indonesia
- Bank of Tokyo Mitsubishi UFJ Ltd
- Energy Link Ltd, New Zealand
- Bayan Resources Tbk. - Indonesia
- Dalmia Cement Bharat India
- Deloitte Consulting - India
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Commonwealth Bank - Australia
- Ministry of Finance - Indonesia
- IHS Mccloskey Coal Group - USA
- Coastal Gujarat Power Limited - India
- GAC Shipping (India) Pvt Ltd
- Petrochimia International Co. Ltd.- Taiwan
- Oldendorff Carriers - Singapore
- Siam City Cement - Thailand
- Intertek Mineral Services - Indonesia
- Directorate Of Revenue Intelligence - India
- Heidelberg Cement - Germany
- Savvy Resources Ltd - HongKong
- Meralco Power Generation, Philippines
- Madhucon Powers Ltd - India
- Aboitiz Power Corporation - Philippines
- Straits Asia Resources Limited - Singapore
- Vizag Seaport Private Limited - India
- Eastern Coal Council - USA
- Krishnapatnam Port Company Ltd. - India
- LBH Netherlands Bv - Netherlands
- SN Aboitiz Power Inc, Philippines
- Indian Energy Exchange, India
- Mercuria Energy - Indonesia
- Holcim Trading Pte Ltd - Singapore
- Gujarat Electricity Regulatory Commission - India
- Indonesian Coal Mining Association
- Ministry of Mines - Canada
- Minerals Council of Australia
- Pendopo Energi Batubara - Indonesia
- Tata Chemicals Ltd - India
- Antam Resourcindo - Indonesia
- Sical Logistics Limited - India
- South Luzon Thermal Energy Corporation
- Vijayanagar Sugar Pvt Ltd - India
- TeaM Sual Corporation - Philippines
- PetroVietnam Power Coal Import and Supply Company
- Chettinad Cement Corporation Ltd - India
- Karaikal Port Pvt Ltd - India
- Baramulti Group, Indonesia
- Bahari Cakrawala Sebuku - Indonesia
- Aditya Birla Group - India
- Metalloyd Limited - United Kingdom
- GMR Energy Limited - India
- Central Java Power - Indonesia
- Gujarat Sidhee Cement - India
- The State Trading Corporation of India Ltd
- Edison Trading Spa - Italy
- Binh Thuan Hamico - Vietnam
- Sindya Power Generating Company Private Ltd
- International Coal Ventures Pvt Ltd - India
- TNB Fuel Sdn Bhd - Malaysia
- Offshore Bulk Terminal Pte Ltd, Singapore
- CNBM International Corporation - China
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Global Green Power PLC Corporation, Philippines
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