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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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- Romanian Commodities Exchange
- Minerals Council of Australia
- Chettinad Cement Corporation Ltd - India
- Jorong Barutama Greston.PT - Indonesia
- Madhucon Powers Ltd - India
- Posco Energy - South Korea
- Kohat Cement Company Ltd. - Pakistan
- India Bulls Power Limited - India
- IHS Mccloskey Coal Group - USA
- Samtan Co., Ltd - South Korea
- Bahari Cakrawala Sebuku - Indonesia
- LBH Netherlands Bv - Netherlands
- Indian Energy Exchange, India
- Cigading International Bulk Terminal - Indonesia
- Essar Steel Hazira Ltd - India
- Sinarmas Energy and Mining - Indonesia
- Semirara Mining Corp, Philippines
- Eastern Energy - Thailand
- McConnell Dowell - Australia
- Iligan Light & Power Inc, Philippines
- Singapore Mercantile Exchange
- Australian Coal Association
- Tamil Nadu electricity Board
- Metalloyd Limited - United Kingdom
- Ambuja Cements Ltd - India
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Trasteel International SA, Italy
- Port Waratah Coal Services - Australia
- Baramulti Group, Indonesia
- Therma Luzon, Inc, Philippines
- Sarangani Energy Corporation, Philippines
- Ministry of Transport, Egypt
- PowerSource Philippines DevCo
- Ministry of Finance - Indonesia
- Straits Asia Resources Limited - Singapore
- Energy Link Ltd, New Zealand
- Orica Mining Services - Indonesia
- Attock Cement Pakistan Limited
- Carbofer General Trading SA - India
- Formosa Plastics Group - Taiwan
- CNBM International Corporation - China
- Wood Mackenzie - Singapore
- Ministry of Mines - Canada
- Simpson Spence & Young - Indonesia
- Agrawal Coal Company - India
- Timah Investasi Mineral - Indoneisa
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Eastern Coal Council - USA
- Manunggal Multi Energi - Indonesia
- Petron Corporation, Philippines
- Meralco Power Generation, Philippines
- Ind-Barath Power Infra Limited - India
- Uttam Galva Steels Limited - India
- Aboitiz Power Corporation - Philippines
- Star Paper Mills Limited - India
- San Jose City I Power Corp, Philippines
- Neyveli Lignite Corporation Ltd, - India
- Sindya Power Generating Company Private Ltd
- Central Electricity Authority - India
- Semirara Mining and Power Corporation, Philippines
- Borneo Indobara - Indonesia
- Lanco Infratech Ltd - India
- CIMB Investment Bank - Malaysia
- GVK Power & Infra Limited - India
- PNOC Exploration Corporation - Philippines
- European Bulk Services B.V. - Netherlands
- Mjunction Services Limited - India
- Indogreen Group - Indonesia
- Maheswari Brothers Coal Limited - India
- Karaikal Port Pvt Ltd - India
- Africa Commodities Group - South Africa
- Thai Mozambique Logistica
- Holcim Trading Pte Ltd - Singapore
- Kepco SPC Power Corporation, Philippines
- Coal and Oil Company - UAE
- Sree Jayajothi Cements Limited - India
- Maharashtra Electricity Regulatory Commission - India
- International Coal Ventures Pvt Ltd - India
- Binh Thuan Hamico - Vietnam
- VISA Power Limited - India
- Savvy Resources Ltd - HongKong
- Mintek Dendrill Indonesia
- Bharathi Cement Corporation - India
- The Treasury - Australian Government
- Tata Chemicals Ltd - India
- Malabar Cements Ltd - India
- Pendopo Energi Batubara - Indonesia
- Mercuria Energy - Indonesia
- SN Aboitiz Power Inc, Philippines
- New Zealand Coal & Carbon
- The University of Queensland
- Energy Development Corp, Philippines
- SMC Global Power, Philippines
- Intertek Mineral Services - Indonesia
- Sical Logistics Limited - India
- South Luzon Thermal Energy Corporation
- Kalimantan Lumbung Energi - Indonesia
- Georgia Ports Authority, United States
- Sojitz Corporation - Japan
- Antam Resourcindo - Indonesia
- Thiess Contractors Indonesia
- White Energy Company Limited
- Jindal Steel & Power Ltd - India
- MS Steel International - UAE
- Makarim & Taira - Indonesia
- Indika Energy - Indonesia
- Deloitte Consulting - India
- Offshore Bulk Terminal Pte Ltd, Singapore
- Xindia Steels Limited - India
- Indo Tambangraya Megah - Indonesia
- Renaissance Capital - South Africa
- Bukit Makmur.PT - Indonesia
- Cement Manufacturers Association - India
- Medco Energi Mining Internasional
- Electricity Authority, New Zealand
- Interocean Group of Companies - India
- Planning Commission, India
- Kapuas Tunggal Persada - Indonesia
- Australian Commodity Traders Exchange
- Directorate General of MIneral and Coal - Indonesia
- Billiton Holdings Pty Ltd - Australia
- Bayan Resources Tbk. - Indonesia
- Ceylon Electricity Board - Sri Lanka
- Vedanta Resources Plc - India
- Barasentosa Lestari - Indonesia
- Miang Besar Coal Terminal - Indonesia
- Global Coal Blending Company Limited - Australia
- AsiaOL BioFuels Corp., Philippines
- London Commodity Brokers - England
- ASAPP Information Group - India
- Vijayanagar Sugar Pvt Ltd - India
- Goldman Sachs - Singapore
- Bhushan Steel Limited - India
- Bangladesh Power Developement Board
- Gujarat Mineral Development Corp Ltd - India
- GMR Energy Limited - India
- Heidelberg Cement - Germany
- Coastal Gujarat Power Limited - India
- Orica Australia Pty. Ltd.
- TeaM Sual Corporation - Philippines
- Sakthi Sugars Limited - India
- Globalindo Alam Lestari - Indonesia
- Parliament of New Zealand
- The State Trading Corporation of India Ltd
- Grasim Industreis Ltd - India
- Vizag Seaport Private Limited - India
- GAC Shipping (India) Pvt Ltd
- GN Power Mariveles Coal Plant, Philippines
- Salva Resources Pvt Ltd - India
- TNB Fuel Sdn Bhd - Malaysia
- Siam City Cement PLC, Thailand
- Gujarat Electricity Regulatory Commission - India
- Alfred C Toepfer International GmbH - Germany
- Standard Chartered Bank - UAE
- Pipit Mutiara Jaya. PT, Indonesia
- Kartika Selabumi Mining - Indonesia
- Global Green Power PLC Corporation, Philippines
- Banpu Public Company Limited - Thailand
- Aditya Birla Group - India
- Kaltim Prima Coal - Indonesia
- Directorate Of Revenue Intelligence - India
- Oldendorff Carriers - Singapore
- Parry Sugars Refinery, India
- Bhatia International Limited - India
- Central Java Power - Indonesia
- Asmin Koalindo Tuhup - Indonesia
- Bulk Trading Sa - Switzerland
- Bhoruka Overseas - Indonesia
- Larsen & Toubro Limited - India
- Edison Trading Spa - Italy
- Independent Power Producers Association of India
- Indonesian Coal Mining Association
- Jaiprakash Power Ventures ltd
- SMG Consultants - Indonesia
- Commonwealth Bank - Australia
- Dalmia Cement Bharat India
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Rio Tinto Coal - Australia
- Kobexindo Tractors - Indoneisa
- Riau Bara Harum - Indonesia
- Price Waterhouse Coopers - Russia
- Chamber of Mines of South Africa
- ICICI Bank Limited - India
- PTC India Limited - India
- Meenaskhi Energy Private Limited - India
- Marubeni Corporation - India
- Bank of Tokyo Mitsubishi UFJ Ltd
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Bukit Baiduri Energy - Indonesia
- Anglo American - United Kingdom
- Wilmar Investment Holdings
- Petrochimia International Co. Ltd.- Taiwan
- Kideco Jaya Agung - Indonesia
- Bukit Asam (Persero) Tbk - Indonesia
- Krishnapatnam Port Company Ltd. - India
- Rashtriya Ispat Nigam Limited - India
- Karbindo Abesyapradhi - Indoneisa
- Siam City Cement - Thailand
- Latin American Coal - Colombia
- PetroVietnam Power Coal Import and Supply Company
- Merrill Lynch Commodities Europe
- Indian Oil Corporation Limited
- Leighton Contractors Pty Ltd - Australia
- Toyota Tsusho Corporation, Japan
- Power Finance Corporation Ltd., India
- Mercator Lines Limited - India
- Gujarat Sidhee Cement - India
- Altura Mining Limited, Indonesia
- Economic Council, Georgia
- Kumho Petrochemical, South Korea
- Coalindo Energy - Indonesia
- IEA Clean Coal Centre - UK
- OPG Power Generation Pvt Ltd - India
- Global Business Power Corporation, Philippines
- Videocon Industries ltd - India
- Electricity Generating Authority of Thailand
- Dong Bac Coal Mineral Investment Coporation - Vietnam
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