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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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Wednesday, 17 October 18
SHIPPING MARKET INSIGHT - TIMOS PAPADIMITRIOU
In the last three months approximately 72 tankers changed hands involving ships larger than 33kdwt up to VLCC. 43 of those vessels had to do ...
Tuesday, 16 October 18
A PRACTICAL OVERVIEW OF THE IMO 2020 SULPHUR CAP - CLYDE&CO
KNOWLEDGE TO ELEVATE
With less than eighteen months before Regulation 14.1.3 of Annex VI of the MARPOL Convention comes into effect, there are ...
Saturday, 13 October 18
SUPRAMAX: SIGNIFICANT ACTIVITY IN THE INDIAN OCEAN WAS EVIDENT AND RATES JUMPED - BALTIC BRIEFING
Capesize
A sharp reversal of fortunes for the big ships as the week closed after a depressed beginning. To start with drops were sudden, with t ...
Wednesday, 10 October 18
SHIPPING MARKET INSIGHT - ILIAS M. LALAOUNIS
During the end of last month the BHSI was hovering around 630 points, while the last observed sale on a 10-yr old Japanese Handy was the M/V Van Im ...
Monday, 08 October 18
INDONESIAN THERMAL COAL PRICE REFERENCE FELL 3.74% IN OCTOBER 2018
COALspot.com: The Ministry of Energy and Mineral Resources of the Republic of Indonesia has revised down the benchmark price of Indonesian thermal ...
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- Neyveli Lignite Corporation Ltd, - India
- Global Business Power Corporation, Philippines
- Bulk Trading Sa - Switzerland
- New Zealand Coal & Carbon
- Madhucon Powers Ltd - India
- Riau Bara Harum - Indonesia
- Holcim Trading Pte Ltd - Singapore
- Edison Trading Spa - Italy
- Kartika Selabumi Mining - Indonesia
- Pipit Mutiara Jaya. PT, Indonesia
- Bank of Tokyo Mitsubishi UFJ Ltd
- Orica Australia Pty. Ltd.
- Kobexindo Tractors - Indoneisa
- Eastern Coal Council - USA
- Altura Mining Limited, Indonesia
- Straits Asia Resources Limited - Singapore
- Antam Resourcindo - Indonesia
- Minerals Council of Australia
- CNBM International Corporation - China
- Malabar Cements Ltd - India
- Global Green Power PLC Corporation, Philippines
- Kapuas Tunggal Persada - Indonesia
- Coastal Gujarat Power Limited - India
- Tamil Nadu electricity Board
- Rio Tinto Coal - Australia
- Kalimantan Lumbung Energi - Indonesia
- Maheswari Brothers Coal Limited - India
- Mintek Dendrill Indonesia
- Kumho Petrochemical, South Korea
- Goldman Sachs - Singapore
- GVK Power & Infra Limited - India
- Chamber of Mines of South Africa
- Sojitz Corporation - Japan
- Essar Steel Hazira Ltd - India
- International Coal Ventures Pvt Ltd - India
- Kohat Cement Company Ltd. - Pakistan
- Bahari Cakrawala Sebuku - Indonesia
- IHS Mccloskey Coal Group - USA
- Bhushan Steel Limited - India
- Parliament of New Zealand
- Thiess Contractors Indonesia
- Ministry of Transport, Egypt
- Agrawal Coal Company - India
- Standard Chartered Bank - UAE
- SMG Consultants - Indonesia
- Merrill Lynch Commodities Europe
- Coalindo Energy - Indonesia
- Manunggal Multi Energi - Indonesia
- VISA Power Limited - India
- Formosa Plastics Group - Taiwan
- Bukit Asam (Persero) Tbk - Indonesia
- LBH Netherlands Bv - Netherlands
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Dalmia Cement Bharat India
- PTC India Limited - India
- Oldendorff Carriers - Singapore
- Economic Council, Georgia
- Jindal Steel & Power Ltd - India
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Meralco Power Generation, Philippines
- MS Steel International - UAE
- Directorate General of MIneral and Coal - Indonesia
- Directorate Of Revenue Intelligence - India
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Simpson Spence & Young - Indonesia
- Central Java Power - Indonesia
- London Commodity Brokers - England
- Bhatia International Limited - India
- Indogreen Group - Indonesia
- Bukit Baiduri Energy - Indonesia
- European Bulk Services B.V. - Netherlands
- Vijayanagar Sugar Pvt Ltd - India
- GN Power Mariveles Coal Plant, Philippines
- Ceylon Electricity Board - Sri Lanka
- Maharashtra Electricity Regulatory Commission - India
- Interocean Group of Companies - India
- Indonesian Coal Mining Association
- OPG Power Generation Pvt Ltd - India
- Baramulti Group, Indonesia
- Karbindo Abesyapradhi - Indoneisa
- Therma Luzon, Inc, Philippines
- SMC Global Power, Philippines
- Wilmar Investment Holdings
- Uttam Galva Steels Limited - India
- Leighton Contractors Pty Ltd - Australia
- Banpu Public Company Limited - Thailand
- Petron Corporation, Philippines
- IEA Clean Coal Centre - UK
- Power Finance Corporation Ltd., India
- South Luzon Thermal Energy Corporation
- Sarangani Energy Corporation, Philippines
- Eastern Energy - Thailand
- Sree Jayajothi Cements Limited - India
- San Jose City I Power Corp, Philippines
- Semirara Mining Corp, Philippines
- Vizag Seaport Private Limited - India
- Attock Cement Pakistan Limited
- PetroVietnam Power Coal Import and Supply Company
- The State Trading Corporation of India Ltd
- Sical Logistics Limited - India
- Miang Besar Coal Terminal - Indonesia
- Meenaskhi Energy Private Limited - India
- CIMB Investment Bank - Malaysia
- AsiaOL BioFuels Corp., Philippines
- Binh Thuan Hamico - Vietnam
- Gujarat Mineral Development Corp Ltd - India
- Ministry of Finance - Indonesia
- Australian Commodity Traders Exchange
- Electricity Generating Authority of Thailand
- Makarim & Taira - Indonesia
- Salva Resources Pvt Ltd - India
- Parry Sugars Refinery, India
- TNB Fuel Sdn Bhd - Malaysia
- Ambuja Cements Ltd - India
- Indo Tambangraya Megah - Indonesia
- Star Paper Mills Limited - India
- Indika Energy - Indonesia
- ICICI Bank Limited - India
- Latin American Coal - Colombia
- Kideco Jaya Agung - Indonesia
- Mercuria Energy - Indonesia
- Barasentosa Lestari - Indonesia
- The University of Queensland
- Krishnapatnam Port Company Ltd. - India
- Bayan Resources Tbk. - Indonesia
- Grasim Industreis Ltd - India
- Commonwealth Bank - Australia
- Aboitiz Power Corporation - Philippines
- Medco Energi Mining Internasional
- Globalindo Alam Lestari - Indonesia
- Energy Development Corp, Philippines
- Sindya Power Generating Company Private Ltd
- Tata Chemicals Ltd - India
- Georgia Ports Authority, United States
- Metalloyd Limited - United Kingdom
- Samtan Co., Ltd - South Korea
- Coal and Oil Company - UAE
- Timah Investasi Mineral - Indoneisa
- Central Electricity Authority - India
- Ministry of Mines - Canada
- Larsen & Toubro Limited - India
- Bharathi Cement Corporation - India
- Australian Coal Association
- GMR Energy Limited - India
- Jorong Barutama Greston.PT - Indonesia
- The Treasury - Australian Government
- PowerSource Philippines DevCo
- Renaissance Capital - South Africa
- Bangladesh Power Developement Board
- McConnell Dowell - Australia
- Aditya Birla Group - India
- Orica Mining Services - Indonesia
- Indian Energy Exchange, India
- Sinarmas Energy and Mining - Indonesia
- Siam City Cement - Thailand
- Ind-Barath Power Infra Limited - India
- Chettinad Cement Corporation Ltd - India
- Thai Mozambique Logistica
- Rashtriya Ispat Nigam Limited - India
- Cigading International Bulk Terminal - Indonesia
- ASAPP Information Group - India
- Romanian Commodities Exchange
- Savvy Resources Ltd - HongKong
- Semirara Mining and Power Corporation, Philippines
- Marubeni Corporation - India
- Gujarat Electricity Regulatory Commission - India
- Electricity Authority, New Zealand
- SN Aboitiz Power Inc, Philippines
- TeaM Sual Corporation - Philippines
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Alfred C Toepfer International GmbH - Germany
- Price Waterhouse Coopers - Russia
- Gujarat Sidhee Cement - India
- Posco Energy - South Korea
- GAC Shipping (India) Pvt Ltd
- Anglo American - United Kingdom
- Petrochimia International Co. Ltd.- Taiwan
- White Energy Company Limited
- Toyota Tsusho Corporation, Japan
- Cement Manufacturers Association - India
- Deloitte Consulting - India
- Bukit Makmur.PT - Indonesia
- PNOC Exploration Corporation - Philippines
- Pendopo Energi Batubara - Indonesia
- Vedanta Resources Plc - India
- Port Waratah Coal Services - Australia
- Africa Commodities Group - South Africa
- Independent Power Producers Association of India
- Bhoruka Overseas - Indonesia
- Sakthi Sugars Limited - India
- Kepco SPC Power Corporation, Philippines
- Intertek Mineral Services - Indonesia
- Mjunction Services Limited - India
- Mercator Lines Limited - India
- Siam City Cement PLC, Thailand
- Borneo Indobara - Indonesia
- Billiton Holdings Pty Ltd - Australia
- India Bulls Power Limited - India
- Trasteel International SA, Italy
- Jaiprakash Power Ventures ltd
- Wood Mackenzie - Singapore
- Global Coal Blending Company Limited - Australia
- Kaltim Prima Coal - Indonesia
- Planning Commission, India
- Iligan Light & Power Inc, Philippines
- Asmin Koalindo Tuhup - Indonesia
- Carbofer General Trading SA - India
- Videocon Industries ltd - India
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Karaikal Port Pvt Ltd - India
- Indian Oil Corporation Limited
- Xindia Steels Limited - India
- Singapore Mercantile Exchange
- Lanco Infratech Ltd - India
- Energy Link Ltd, New Zealand
- Offshore Bulk Terminal Pte Ltd, Singapore
- Heidelberg Cement - Germany
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