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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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Friday, 10 August 18
U.S. COAL PRODUCTION TO DECLINE BY 1.8% IN 2019 BECAUSE COAL EXPORTS AND COAL CONSUMPTION ARE BOTH FORECAST TO DECREASE - EIA
EIA forecasts U.S. coal production will decline by 1.1% to 766 million short tons (MMst) in 2018 despite a 5.7% (6 MMst) increase in coal exports.
...
Thursday, 09 August 18
RIO TINTO COMPLETES SALE OF REMAINING COAL ASSETS
Rio Tinto has completed the sale of its remaining coal assets in Queensland, Australia, for $3.95 billion.
According to a noted post ...
Wednesday, 08 August 18
CHINA DEMANDS PREMIUM IRON ORE, COAL; MINERS MIXED IMPACT - FITCH RATINGS
China’s stricter environmental regulations and structural changes in its steelmaking industry boosts ongoing demand for high-quality iron ore ...
Wednesday, 08 August 18
SHIPPING MARKET INSIGHT - CHRISTOPHER WHITTY
Singapore's shipyard business has evolved over the decades, from shipbuilding and repairs to rig building. It's now evolving again, to cate ...
Friday, 03 August 18
PHEW! ASIA, EUROPE HEATWAVE PUSHES AUSTRALIA COAL PRICES TO 6-YEAR HIGH: REUTERS
Australian thermal coal prices have hit fresh six-year highs as a heatwave across the northern hemisphere has triggered a spike in demand for coal- ...
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- Merrill Lynch Commodities Europe
- Ind-Barath Power Infra Limited - India
- Parliament of New Zealand
- Neyveli Lignite Corporation Ltd, - India
- Wilmar Investment Holdings
- Toyota Tsusho Corporation, Japan
- Sindya Power Generating Company Private Ltd
- Billiton Holdings Pty Ltd - Australia
- Bangladesh Power Developement Board
- PowerSource Philippines DevCo
- Price Waterhouse Coopers - Russia
- Ministry of Mines - Canada
- Bhatia International Limited - India
- TNB Fuel Sdn Bhd - Malaysia
- Oldendorff Carriers - Singapore
- Videocon Industries ltd - India
- Ministry of Transport, Egypt
- Coalindo Energy - Indonesia
- Antam Resourcindo - Indonesia
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Energy Development Corp, Philippines
- Gujarat Electricity Regulatory Commission - India
- Jorong Barutama Greston.PT - Indonesia
- Straits Asia Resources Limited - Singapore
- Sojitz Corporation - Japan
- Singapore Mercantile Exchange
- Binh Thuan Hamico - Vietnam
- Simpson Spence & Young - Indonesia
- Holcim Trading Pte Ltd - Singapore
- International Coal Ventures Pvt Ltd - India
- PNOC Exploration Corporation - Philippines
- The Treasury - Australian Government
- Planning Commission, India
- Parry Sugars Refinery, India
- Thiess Contractors Indonesia
- Africa Commodities Group - South Africa
- Offshore Bulk Terminal Pte Ltd, Singapore
- Kalimantan Lumbung Energi - Indonesia
- Indian Oil Corporation Limited
- Australian Coal Association
- Edison Trading Spa - Italy
- Semirara Mining and Power Corporation, Philippines
- Uttam Galva Steels Limited - India
- GVK Power & Infra Limited - India
- Rashtriya Ispat Nigam Limited - India
- VISA Power Limited - India
- Heidelberg Cement - Germany
- Mjunction Services Limited - India
- McConnell Dowell - Australia
- Global Coal Blending Company Limited - Australia
- Ministry of Finance - Indonesia
- Kaltim Prima Coal - Indonesia
- Kartika Selabumi Mining - Indonesia
- Ambuja Cements Ltd - India
- Goldman Sachs - Singapore
- Kepco SPC Power Corporation, Philippines
- Global Green Power PLC Corporation, Philippines
- Semirara Mining Corp, Philippines
- Chamber of Mines of South Africa
- Gujarat Mineral Development Corp Ltd - India
- GMR Energy Limited - India
- Siam City Cement - Thailand
- Gujarat Sidhee Cement - India
- Global Business Power Corporation, Philippines
- Eastern Energy - Thailand
- GAC Shipping (India) Pvt Ltd
- Aditya Birla Group - India
- Chettinad Cement Corporation Ltd - India
- Globalindo Alam Lestari - Indonesia
- Krishnapatnam Port Company Ltd. - India
- Therma Luzon, Inc, Philippines
- Makarim & Taira - Indonesia
- Port Waratah Coal Services - Australia
- SMG Consultants - Indonesia
- The University of Queensland
- Carbofer General Trading SA - India
- Bukit Baiduri Energy - Indonesia
- Samtan Co., Ltd - South Korea
- Minerals Council of Australia
- Renaissance Capital - South Africa
- India Bulls Power Limited - India
- Indian Energy Exchange, India
- OPG Power Generation Pvt Ltd - India
- PTC India Limited - India
- CIMB Investment Bank - Malaysia
- Madhucon Powers Ltd - India
- Tata Chemicals Ltd - India
- Attock Cement Pakistan Limited
- Asmin Koalindo Tuhup - Indonesia
- London Commodity Brokers - England
- Central Electricity Authority - India
- Sakthi Sugars Limited - India
- Posco Energy - South Korea
- The State Trading Corporation of India Ltd
- Siam City Cement PLC, Thailand
- Banpu Public Company Limited - Thailand
- Jaiprakash Power Ventures ltd
- Baramulti Group, Indonesia
- Bulk Trading Sa - Switzerland
- Borneo Indobara - Indonesia
- Meenaskhi Energy Private Limited - India
- Pendopo Energi Batubara - Indonesia
- Karaikal Port Pvt Ltd - India
- Indo Tambangraya Megah - Indonesia
- ICICI Bank Limited - India
- Lanco Infratech Ltd - India
- Directorate General of MIneral and Coal - Indonesia
- Mercuria Energy - Indonesia
- Bank of Tokyo Mitsubishi UFJ Ltd
- Timah Investasi Mineral - Indoneisa
- San Jose City I Power Corp, Philippines
- Indonesian Coal Mining Association
- Coal and Oil Company - UAE
- Kobexindo Tractors - Indoneisa
- Mintek Dendrill Indonesia
- Miang Besar Coal Terminal - Indonesia
- Karbindo Abesyapradhi - Indoneisa
- GN Power Mariveles Coal Plant, Philippines
- Medco Energi Mining Internasional
- Maheswari Brothers Coal Limited - India
- Metalloyd Limited - United Kingdom
- Xindia Steels Limited - India
- IEA Clean Coal Centre - UK
- IHS Mccloskey Coal Group - USA
- Power Finance Corporation Ltd., India
- Riau Bara Harum - Indonesia
- Bhoruka Overseas - Indonesia
- Romanian Commodities Exchange
- Standard Chartered Bank - UAE
- Kapuas Tunggal Persada - Indonesia
- Orica Australia Pty. Ltd.
- Kumho Petrochemical, South Korea
- Cigading International Bulk Terminal - Indonesia
- Maharashtra Electricity Regulatory Commission - India
- Larsen & Toubro Limited - India
- Independent Power Producers Association of India
- Sree Jayajothi Cements Limited - India
- European Bulk Services B.V. - Netherlands
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Savvy Resources Ltd - HongKong
- Economic Council, Georgia
- CNBM International Corporation - China
- Georgia Ports Authority, United States
- MS Steel International - UAE
- Interocean Group of Companies - India
- Bukit Asam (Persero) Tbk - Indonesia
- Vizag Seaport Private Limited - India
- Petron Corporation, Philippines
- Vedanta Resources Plc - India
- Eastern Coal Council - USA
- AsiaOL BioFuels Corp., Philippines
- Tamil Nadu electricity Board
- Sinarmas Energy and Mining - Indonesia
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Kideco Jaya Agung - Indonesia
- Pipit Mutiara Jaya. PT, Indonesia
- Energy Link Ltd, New Zealand
- Thai Mozambique Logistica
- Electricity Generating Authority of Thailand
- Bahari Cakrawala Sebuku - Indonesia
- Intertek Mineral Services - Indonesia
- Essar Steel Hazira Ltd - India
- Commonwealth Bank - Australia
- LBH Netherlands Bv - Netherlands
- Alfred C Toepfer International GmbH - Germany
- Sical Logistics Limited - India
- SMC Global Power, Philippines
- Australian Commodity Traders Exchange
- South Luzon Thermal Energy Corporation
- SN Aboitiz Power Inc, Philippines
- Star Paper Mills Limited - India
- Indika Energy - Indonesia
- Cement Manufacturers Association - India
- Anglo American - United Kingdom
- Mercator Lines Limited - India
- White Energy Company Limited
- Malabar Cements Ltd - India
- Barasentosa Lestari - Indonesia
- Vijayanagar Sugar Pvt Ltd - India
- Trasteel International SA, Italy
- Altura Mining Limited, Indonesia
- Petrochimia International Co. Ltd.- Taiwan
- Deloitte Consulting - India
- Indogreen Group - Indonesia
- Jindal Steel & Power Ltd - India
- Coastal Gujarat Power Limited - India
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Bukit Makmur.PT - Indonesia
- Latin American Coal - Colombia
- Marubeni Corporation - India
- Bharathi Cement Corporation - India
- Bhushan Steel Limited - India
- Aboitiz Power Corporation - Philippines
- Meralco Power Generation, Philippines
- Iligan Light & Power Inc, Philippines
- Bayan Resources Tbk. - Indonesia
- Kohat Cement Company Ltd. - Pakistan
- Manunggal Multi Energi - Indonesia
- Agrawal Coal Company - India
- Directorate Of Revenue Intelligence - India
- Dalmia Cement Bharat India
- Leighton Contractors Pty Ltd - Australia
- Rio Tinto Coal - Australia
- Formosa Plastics Group - Taiwan
- New Zealand Coal & Carbon
- PetroVietnam Power Coal Import and Supply Company
- Ceylon Electricity Board - Sri Lanka
- ASAPP Information Group - India
- Salva Resources Pvt Ltd - India
- Sarangani Energy Corporation, Philippines
- TeaM Sual Corporation - Philippines
- Wood Mackenzie - Singapore
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Central Java Power - Indonesia
- Grasim Industreis Ltd - India
- Electricity Authority, New Zealand
- Orica Mining Services - Indonesia
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