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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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Monday, 08 October 18
KOMIPO INVITES BIDS FOR 520,000 TONS OF COLOMBIAN ORIGIN OF 5,700 NAR COAL
COALspot.com: South Korea state-owned utility Korea Midland Power (KOMIPO) issued a tender for 520,000 MT of min. 5700 NAR coal of Colombian origin ...
Sunday, 07 October 18
SUPRAMAX: INDO-INDIA USUAL COAL RUNS WERE COVERED AT US$ 12K - FEARNLEYS
Capesize
Average daily earnings up close to 15 pct in 5 trading days, thus patience finally paying off for owners of the big ships - Chinese play ...
Sunday, 07 October 18
A CASE FOR 20/20 VISION? IMO'S LOW SULPHUR FUEL LIMIT UNDER MARPOL ANNEX VI WHICH COMES INTO FORCE ON 1ST JANUARY 2020
KNOWLEDGE TO ELEVATE
The implementation of the global 0.5% sulphur cap for bunker fuel under MARPOL Annex VI in just under 18 months’ ti ...
Friday, 05 October 18
COAL PRODUCTION REACHES 64% OF 2018 TARGET : THE JAKARTA POST
National coal production up to August has already reached 311 million tons, or 64 percent of this year's total target of 485 million tons, acco ...
Wednesday, 03 October 18
VALUE OF AUSTRALIAN COAL EXPORTS TIPPED TO DECLINE SHARPLY OVER NEXT 18 MONTHS - THE GUARDIAN
Thermal coal prices forecast to drop 25% and metallurgical coal prices 23% as value of iron ore exports also falls
The value of Aust ...
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- Bhushan Steel Limited - India
- Petrochimia International Co. Ltd.- Taiwan
- McConnell Dowell - Australia
- Pendopo Energi Batubara - Indonesia
- Deloitte Consulting - India
- Manunggal Multi Energi - Indonesia
- Oldendorff Carriers - Singapore
- Globalindo Alam Lestari - Indonesia
- Commonwealth Bank - Australia
- Port Waratah Coal Services - Australia
- International Coal Ventures Pvt Ltd - India
- Mercator Lines Limited - India
- PTC India Limited - India
- Cement Manufacturers Association - India
- Minerals Council of Australia
- Lanco Infratech Ltd - India
- European Bulk Services B.V. - Netherlands
- Pipit Mutiara Jaya. PT, Indonesia
- Neyveli Lignite Corporation Ltd, - India
- Vizag Seaport Private Limited - India
- Bhatia International Limited - India
- Iligan Light & Power Inc, Philippines
- Medco Energi Mining Internasional
- SN Aboitiz Power Inc, Philippines
- Eastern Energy - Thailand
- Africa Commodities Group - South Africa
- Gujarat Electricity Regulatory Commission - India
- Gujarat Sidhee Cement - India
- Global Green Power PLC Corporation, Philippines
- PowerSource Philippines DevCo
- Bukit Makmur.PT - Indonesia
- ICICI Bank Limited - India
- Karaikal Port Pvt Ltd - India
- Holcim Trading Pte Ltd - Singapore
- Makarim & Taira - Indonesia
- Intertek Mineral Services - Indonesia
- India Bulls Power Limited - India
- Semirara Mining Corp, Philippines
- Heidelberg Cement - Germany
- IHS Mccloskey Coal Group - USA
- Ministry of Mines - Canada
- The Treasury - Australian Government
- TNB Fuel Sdn Bhd - Malaysia
- Riau Bara Harum - Indonesia
- Anglo American - United Kingdom
- Rio Tinto Coal - Australia
- Bayan Resources Tbk. - Indonesia
- Interocean Group of Companies - India
- Parry Sugars Refinery, India
- GVK Power & Infra Limited - India
- Altura Mining Limited, Indonesia
- Krishnapatnam Port Company Ltd. - India
- Electricity Generating Authority of Thailand
- Coastal Gujarat Power Limited - India
- Meenaskhi Energy Private Limited - India
- Sical Logistics Limited - India
- Goldman Sachs - Singapore
- SMG Consultants - Indonesia
- Banpu Public Company Limited - Thailand
- Attock Cement Pakistan Limited
- Vedanta Resources Plc - India
- Bhoruka Overseas - Indonesia
- Electricity Authority, New Zealand
- Coalindo Energy - Indonesia
- Semirara Mining and Power Corporation, Philippines
- Mjunction Services Limited - India
- White Energy Company Limited
- Metalloyd Limited - United Kingdom
- Global Coal Blending Company Limited - Australia
- Siam City Cement PLC, Thailand
- Maharashtra Electricity Regulatory Commission - India
- Straits Asia Resources Limited - Singapore
- Bangladesh Power Developement Board
- Bahari Cakrawala Sebuku - Indonesia
- Indonesian Coal Mining Association
- Borneo Indobara - Indonesia
- Orica Australia Pty. Ltd.
- Larsen & Toubro Limited - India
- Coal and Oil Company - UAE
- Antam Resourcindo - Indonesia
- Directorate General of MIneral and Coal - Indonesia
- Rashtriya Ispat Nigam Limited - India
- Ind-Barath Power Infra Limited - India
- Petron Corporation, Philippines
- Bank of Tokyo Mitsubishi UFJ Ltd
- Wilmar Investment Holdings
- Orica Mining Services - Indonesia
- Baramulti Group, Indonesia
- LBH Netherlands Bv - Netherlands
- London Commodity Brokers - England
- Thiess Contractors Indonesia
- Barasentosa Lestari - Indonesia
- Cigading International Bulk Terminal - Indonesia
- Kalimantan Lumbung Energi - Indonesia
- The State Trading Corporation of India Ltd
- Parliament of New Zealand
- Jorong Barutama Greston.PT - Indonesia
- Indian Energy Exchange, India
- Jindal Steel & Power Ltd - India
- Bulk Trading Sa - Switzerland
- Sree Jayajothi Cements Limited - India
- Australian Commodity Traders Exchange
- Ministry of Finance - Indonesia
- Directorate Of Revenue Intelligence - India
- Star Paper Mills Limited - India
- Singapore Mercantile Exchange
- Therma Luzon, Inc, Philippines
- GMR Energy Limited - India
- Videocon Industries ltd - India
- Central Java Power - Indonesia
- Global Business Power Corporation, Philippines
- PNOC Exploration Corporation - Philippines
- Ministry of Transport, Egypt
- Kobexindo Tractors - Indoneisa
- Carbofer General Trading SA - India
- GAC Shipping (India) Pvt Ltd
- Essar Steel Hazira Ltd - India
- Formosa Plastics Group - Taiwan
- VISA Power Limited - India
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Thai Mozambique Logistica
- Salva Resources Pvt Ltd - India
- Indogreen Group - Indonesia
- Wood Mackenzie - Singapore
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Billiton Holdings Pty Ltd - Australia
- Ambuja Cements Ltd - India
- Marubeni Corporation - India
- CNBM International Corporation - China
- Economic Council, Georgia
- Bukit Baiduri Energy - Indonesia
- Sakthi Sugars Limited - India
- Miang Besar Coal Terminal - Indonesia
- San Jose City I Power Corp, Philippines
- Kepco SPC Power Corporation, Philippines
- Power Finance Corporation Ltd., India
- Aboitiz Power Corporation - Philippines
- IEA Clean Coal Centre - UK
- Energy Link Ltd, New Zealand
- Madhucon Powers Ltd - India
- Standard Chartered Bank - UAE
- Malabar Cements Ltd - India
- Eastern Coal Council - USA
- Georgia Ports Authority, United States
- Dalmia Cement Bharat India
- Australian Coal Association
- Kohat Cement Company Ltd. - Pakistan
- CIMB Investment Bank - Malaysia
- Tamil Nadu electricity Board
- Timah Investasi Mineral - Indoneisa
- Vijayanagar Sugar Pvt Ltd - India
- Alfred C Toepfer International GmbH - Germany
- Romanian Commodities Exchange
- Karbindo Abesyapradhi - Indoneisa
- Toyota Tsusho Corporation, Japan
- OPG Power Generation Pvt Ltd - India
- Meralco Power Generation, Philippines
- Offshore Bulk Terminal Pte Ltd, Singapore
- Edison Trading Spa - Italy
- Merrill Lynch Commodities Europe
- Mintek Dendrill Indonesia
- Kapuas Tunggal Persada - Indonesia
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Samtan Co., Ltd - South Korea
- Indo Tambangraya Megah - Indonesia
- Maheswari Brothers Coal Limited - India
- Sarangani Energy Corporation, Philippines
- Bukit Asam (Persero) Tbk - Indonesia
- Bharathi Cement Corporation - India
- SMC Global Power, Philippines
- Gujarat Mineral Development Corp Ltd - India
- South Luzon Thermal Energy Corporation
- Agrawal Coal Company - India
- Chettinad Cement Corporation Ltd - India
- Kaltim Prima Coal - Indonesia
- Simpson Spence & Young - Indonesia
- Central Electricity Authority - India
- Indian Oil Corporation Limited
- Siam City Cement - Thailand
- Savvy Resources Ltd - HongKong
- AsiaOL BioFuels Corp., Philippines
- Jaiprakash Power Ventures ltd
- Trasteel International SA, Italy
- Price Waterhouse Coopers - Russia
- Independent Power Producers Association of India
- Sinarmas Energy and Mining - Indonesia
- Binh Thuan Hamico - Vietnam
- GN Power Mariveles Coal Plant, Philippines
- Sindya Power Generating Company Private Ltd
- Sojitz Corporation - Japan
- ASAPP Information Group - India
- Kumho Petrochemical, South Korea
- TeaM Sual Corporation - Philippines
- Posco Energy - South Korea
- Planning Commission, India
- Kartika Selabumi Mining - Indonesia
- Leighton Contractors Pty Ltd - Australia
- Grasim Industreis Ltd - India
- Ceylon Electricity Board - Sri Lanka
- Tata Chemicals Ltd - India
- Chamber of Mines of South Africa
- Latin American Coal - Colombia
- Xindia Steels Limited - India
- Kideco Jaya Agung - Indonesia
- Aditya Birla Group - India
- Renaissance Capital - South Africa
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Uttam Galva Steels Limited - India
- PetroVietnam Power Coal Import and Supply Company
- MS Steel International - UAE
- Asmin Koalindo Tuhup - Indonesia
- Asia Pacific Energy Resources Ventures Inc, Philippines
- The University of Queensland
- Mercuria Energy - Indonesia
- New Zealand Coal & Carbon
- Energy Development Corp, Philippines
- Indika Energy - Indonesia
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