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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, 31 July 18
ENERGY MINISTRY REMAINS FIRM ON DMO POLICY FOR COAL - JP
The Energy and Mineral Resources Ministry has stressed that it will not cancel its policy on the domestic market obligation (DMO) for coal, as the ...
Saturday, 28 July 18
GOVERNMENT TO REVOKE COAL PRICE CAP POLICY - JP
The government plans to revise its domestic market obligation (DMO) on coal price next week during a high-level meeting with President Joko “ ...
Thursday, 26 July 18
A SUPRAMAX IS NOW PAID AROUND USD 21,500 FOR LOADING IN THE US GULF WITH DISCHARGE IN THE FAR EAST - FEARNLEYS
Cape
There has been a relatively strong summer period so far, and there is a strong week we have left behind us.
In the Pa ...
Thursday, 26 July 18
ASEAN COAL IMPORTS INCREASED IN 2Q' 18 COMPARED TO THE PRIOR YEAR; THIS TREND TO CONTINUE AS 56 GIGAWATTS OF NEW COAL PLANTS IN 24 COUNTRIES WORLDWIDE ARE EXPECTED TO COME ONLINE IN 2018 - PEABODY
Peabody announced its second quarter 2018 operating results, including revenues of $1.31 billion, income from continuing operations, net of income ...
Wednesday, 25 July 18
COAL MINER BUKIT ASAM'S PROFIT GROWS 50% IN FIRST HALF - JP
Coal miner Bukit Asam announced 50 percent profit growth to Rp 2.58 trillion (US$177.33 million) in the first half of 2018, on the back of a coal-p ...
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- Attock Cement Pakistan Limited
- Central Electricity Authority - India
- Australian Commodity Traders Exchange
- Straits Asia Resources Limited - Singapore
- Jaiprakash Power Ventures ltd
- Meenaskhi Energy Private Limited - India
- Bahari Cakrawala Sebuku - Indonesia
- Wilmar Investment Holdings
- Cigading International Bulk Terminal - Indonesia
- Economic Council, Georgia
- Karaikal Port Pvt Ltd - India
- Orica Australia Pty. Ltd.
- Grasim Industreis Ltd - India
- Iligan Light & Power Inc, Philippines
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Leighton Contractors Pty Ltd - Australia
- ASAPP Information Group - India
- Orica Mining Services - Indonesia
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Wood Mackenzie - Singapore
- Kapuas Tunggal Persada - Indonesia
- Commonwealth Bank - Australia
- Bukit Baiduri Energy - Indonesia
- Global Coal Blending Company Limited - Australia
- Sical Logistics Limited - India
- AsiaOL BioFuels Corp., Philippines
- Indogreen Group - Indonesia
- Siam City Cement - Thailand
- Banpu Public Company Limited - Thailand
- Dalmia Cement Bharat India
- Gujarat Electricity Regulatory Commission - India
- Ministry of Finance - Indonesia
- TeaM Sual Corporation - Philippines
- Directorate Of Revenue Intelligence - India
- Directorate General of MIneral and Coal - Indonesia
- Indo Tambangraya Megah - Indonesia
- Thiess Contractors Indonesia
- Edison Trading Spa - Italy
- Simpson Spence & Young - Indonesia
- European Bulk Services B.V. - Netherlands
- Indian Energy Exchange, India
- Binh Thuan Hamico - Vietnam
- Intertek Mineral Services - Indonesia
- Global Green Power PLC Corporation, Philippines
- Essar Steel Hazira Ltd - India
- Lanco Infratech Ltd - India
- Sinarmas Energy and Mining - Indonesia
- Bhatia International Limited - India
- ICICI Bank Limited - India
- Bangladesh Power Developement Board
- Vedanta Resources Plc - India
- Jorong Barutama Greston.PT - Indonesia
- Singapore Mercantile Exchange
- Chettinad Cement Corporation Ltd - India
- Marubeni Corporation - India
- International Coal Ventures Pvt Ltd - India
- Goldman Sachs - Singapore
- Electricity Authority, New Zealand
- Coal and Oil Company - UAE
- Sojitz Corporation - Japan
- Port Waratah Coal Services - Australia
- White Energy Company Limited
- Planning Commission, India
- Mjunction Services Limited - India
- Altura Mining Limited, Indonesia
- Coastal Gujarat Power Limited - India
- Toyota Tsusho Corporation, Japan
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Sree Jayajothi Cements Limited - India
- Maharashtra Electricity Regulatory Commission - India
- OPG Power Generation Pvt Ltd - India
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- San Jose City I Power Corp, Philippines
- Therma Luzon, Inc, Philippines
- IHS Mccloskey Coal Group - USA
- Bank of Tokyo Mitsubishi UFJ Ltd
- Merrill Lynch Commodities Europe
- Agrawal Coal Company - India
- Manunggal Multi Energi - Indonesia
- Baramulti Group, Indonesia
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Bukit Makmur.PT - Indonesia
- Star Paper Mills Limited - India
- Tata Chemicals Ltd - India
- Xindia Steels Limited - India
- Sakthi Sugars Limited - India
- Mintek Dendrill Indonesia
- Power Finance Corporation Ltd., India
- Larsen & Toubro Limited - India
- Parliament of New Zealand
- Africa Commodities Group - South Africa
- Semirara Mining and Power Corporation, Philippines
- Meralco Power Generation, Philippines
- Jindal Steel & Power Ltd - India
- Alfred C Toepfer International GmbH - Germany
- Energy Link Ltd, New Zealand
- Gujarat Sidhee Cement - India
- Malabar Cements Ltd - India
- Petron Corporation, Philippines
- LBH Netherlands Bv - Netherlands
- Petrochimia International Co. Ltd.- Taiwan
- Energy Development Corp, Philippines
- Kaltim Prima Coal - Indonesia
- CIMB Investment Bank - Malaysia
- Globalindo Alam Lestari - Indonesia
- Vijayanagar Sugar Pvt Ltd - India
- Bhoruka Overseas - Indonesia
- Uttam Galva Steels Limited - India
- Ministry of Transport, Egypt
- Carbofer General Trading SA - India
- Salva Resources Pvt Ltd - India
- Romanian Commodities Exchange
- Bayan Resources Tbk. - Indonesia
- Siam City Cement PLC, Thailand
- Holcim Trading Pte Ltd - Singapore
- Ind-Barath Power Infra Limited - India
- Riau Bara Harum - Indonesia
- Pipit Mutiara Jaya. PT, Indonesia
- Ambuja Cements Ltd - India
- Gujarat Mineral Development Corp Ltd - India
- Heidelberg Cement - Germany
- Bharathi Cement Corporation - India
- India Bulls Power Limited - India
- PTC India Limited - India
- PNOC Exploration Corporation - Philippines
- Global Business Power Corporation, Philippines
- Eastern Coal Council - USA
- SMC Global Power, Philippines
- SMG Consultants - Indonesia
- Kobexindo Tractors - Indoneisa
- Borneo Indobara - Indonesia
- Indika Energy - Indonesia
- PowerSource Philippines DevCo
- Aboitiz Power Corporation - Philippines
- Sindya Power Generating Company Private Ltd
- Barasentosa Lestari - Indonesia
- Thai Mozambique Logistica
- Aditya Birla Group - India
- Rashtriya Ispat Nigam Limited - India
- Ceylon Electricity Board - Sri Lanka
- Medco Energi Mining Internasional
- IEA Clean Coal Centre - UK
- The University of Queensland
- Semirara Mining Corp, Philippines
- Pendopo Energi Batubara - Indonesia
- Standard Chartered Bank - UAE
- Madhucon Powers Ltd - India
- Savvy Resources Ltd - HongKong
- Timah Investasi Mineral - Indoneisa
- Asmin Koalindo Tuhup - Indonesia
- Price Waterhouse Coopers - Russia
- Minerals Council of Australia
- New Zealand Coal & Carbon
- Mercuria Energy - Indonesia
- Electricity Generating Authority of Thailand
- Mercator Lines Limited - India
- Kartika Selabumi Mining - Indonesia
- Videocon Industries ltd - India
- GMR Energy Limited - India
- Interocean Group of Companies - India
- Krishnapatnam Port Company Ltd. - India
- Kideco Jaya Agung - Indonesia
- Miang Besar Coal Terminal - Indonesia
- Coalindo Energy - Indonesia
- Ministry of Mines - Canada
- Independent Power Producers Association of India
- The State Trading Corporation of India Ltd
- Parry Sugars Refinery, India
- Offshore Bulk Terminal Pte Ltd, Singapore
- Kohat Cement Company Ltd. - Pakistan
- GN Power Mariveles Coal Plant, Philippines
- Indonesian Coal Mining Association
- Kalimantan Lumbung Energi - Indonesia
- Bhushan Steel Limited - India
- Neyveli Lignite Corporation Ltd, - India
- Cement Manufacturers Association - India
- VISA Power Limited - India
- Posco Energy - South Korea
- Rio Tinto Coal - Australia
- Central Java Power - Indonesia
- TNB Fuel Sdn Bhd - Malaysia
- CNBM International Corporation - China
- Samtan Co., Ltd - South Korea
- Tamil Nadu electricity Board
- Trasteel International SA, Italy
- Makarim & Taira - Indonesia
- Billiton Holdings Pty Ltd - Australia
- Indian Oil Corporation Limited
- Vizag Seaport Private Limited - India
- GAC Shipping (India) Pvt Ltd
- McConnell Dowell - Australia
- Australian Coal Association
- Bukit Asam (Persero) Tbk - Indonesia
- Oldendorff Carriers - Singapore
- PetroVietnam Power Coal Import and Supply Company
- South Luzon Thermal Energy Corporation
- Latin American Coal - Colombia
- Sarangani Energy Corporation, Philippines
- Anglo American - United Kingdom
- GVK Power & Infra Limited - India
- Maheswari Brothers Coal Limited - India
- Metalloyd Limited - United Kingdom
- MS Steel International - UAE
- Kepco SPC Power Corporation, Philippines
- Antam Resourcindo - Indonesia
- The Treasury - Australian Government
- Renaissance Capital - South Africa
- Chamber of Mines of South Africa
- Deloitte Consulting - India
- London Commodity Brokers - England
- Bulk Trading Sa - Switzerland
- Karbindo Abesyapradhi - Indoneisa
- Eastern Energy - Thailand
- Formosa Plastics Group - Taiwan
- SN Aboitiz Power Inc, Philippines
- Georgia Ports Authority, United States
- Kumho Petrochemical, South Korea
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