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