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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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Thursday, 21 June 18
CHINESE REDUCED COAL IMPORT RESTRICTIONS - CAIXIN GLOBAL
Caixin Global reported that the Chinese government has reduced restrictions on coal imports at the nation’s major ports in response to concer ...
Thursday, 21 June 18
INDIAN GOVERNMENT ADMITS COAL SHORTAGE, ASKS DISCOMS TO IMPORT - TIMES OF INDIA
Times of India reported that the power ministry has advised all state governments and private power distribution companies to import coal as Coal I ...
Tuesday, 19 June 18
WCA RESPONDS TO BP STATISTICAL REVIEW OF WORLD ENERGY 2018
Responding to BP’s Statistical Review of World Energy 2018, Benjamin Sporton, Chief Executive of the World Coal Association (WCA) said, &ldqu ...
Wednesday, 13 June 18
U.S. COAL PRODUCTION TO DECLINE BY 2% TO 756 MILLION SHORT TONS MMST IN 2018 - EIA
EIA forecasts U.S. coal production to decline by 2% to 756 million short tons (MMst) in 2018.
According to EIA's Short-Term Ener ...
Wednesday, 13 June 18
SHIPPING MARKET INSIGHT - SOPHIE COTZIAS
2018 marks quite a few milestones for Greek Shipping. No need to detail again the greatness of Greek Shipping or the singular position that Greek s ...
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- Makarim & Taira - Indonesia
- Mintek Dendrill Indonesia
- Price Waterhouse Coopers - Russia
- Globalindo Alam Lestari - Indonesia
- Jorong Barutama Greston.PT - Indonesia
- Jindal Steel & Power Ltd - India
- Posco Energy - South Korea
- GMR Energy Limited - India
- Vizag Seaport Private Limited - India
- Formosa Plastics Group - Taiwan
- Latin American Coal - Colombia
- SMG Consultants - Indonesia
- PowerSource Philippines DevCo
- Salva Resources Pvt Ltd - India
- Timah Investasi Mineral - Indoneisa
- Asmin Koalindo Tuhup - Indonesia
- The Treasury - Australian Government
- Ministry of Mines - Canada
- Sarangani Energy Corporation, Philippines
- Xindia Steels Limited - India
- Barasentosa Lestari - Indonesia
- Romanian Commodities Exchange
- LBH Netherlands Bv - Netherlands
- Parliament of New Zealand
- Videocon Industries ltd - India
- Binh Thuan Hamico - Vietnam
- Karbindo Abesyapradhi - Indoneisa
- Banpu Public Company Limited - Thailand
- Malabar Cements Ltd - India
- Independent Power Producers Association of India
- Central Electricity Authority - India
- Bayan Resources Tbk. - Indonesia
- Cement Manufacturers Association - India
- Cigading International Bulk Terminal - Indonesia
- CNBM International Corporation - China
- Bahari Cakrawala Sebuku - Indonesia
- Kumho Petrochemical, South Korea
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Directorate General of MIneral and Coal - Indonesia
- Miang Besar Coal Terminal - Indonesia
- Bank of Tokyo Mitsubishi UFJ Ltd
- Wood Mackenzie - Singapore
- Economic Council, Georgia
- TNB Fuel Sdn Bhd - Malaysia
- Bhoruka Overseas - Indonesia
- Oldendorff Carriers - Singapore
- Deloitte Consulting - India
- Central Java Power - Indonesia
- Mercator Lines Limited - India
- Siam City Cement - Thailand
- The University of Queensland
- Uttam Galva Steels Limited - India
- Thai Mozambique Logistica
- Gujarat Electricity Regulatory Commission - India
- Indo Tambangraya Megah - Indonesia
- Rio Tinto Coal - Australia
- Eastern Coal Council - USA
- Kepco SPC Power Corporation, Philippines
- Indian Oil Corporation Limited
- Riau Bara Harum - Indonesia
- Petrochimia International Co. Ltd.- Taiwan
- Antam Resourcindo - Indonesia
- Mercuria Energy - Indonesia
- Electricity Generating Authority of Thailand
- TeaM Sual Corporation - Philippines
- Commonwealth Bank - Australia
- South Luzon Thermal Energy Corporation
- Orica Mining Services - Indonesia
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Offshore Bulk Terminal Pte Ltd, Singapore
- Singapore Mercantile Exchange
- Bukit Baiduri Energy - Indonesia
- Ambuja Cements Ltd - India
- Kobexindo Tractors - Indoneisa
- Holcim Trading Pte Ltd - Singapore
- Standard Chartered Bank - UAE
- Indian Energy Exchange, India
- Pendopo Energi Batubara - Indonesia
- Jaiprakash Power Ventures ltd
- Kartika Selabumi Mining - Indonesia
- Pipit Mutiara Jaya. PT, Indonesia
- Therma Luzon, Inc, Philippines
- Georgia Ports Authority, United States
- Gujarat Sidhee Cement - India
- Larsen & Toubro Limited - India
- Coastal Gujarat Power Limited - India
- Marubeni Corporation - India
- Indogreen Group - Indonesia
- Goldman Sachs - Singapore
- Agrawal Coal Company - India
- Semirara Mining Corp, Philippines
- Port Waratah Coal Services - Australia
- Ministry of Transport, Egypt
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Sindya Power Generating Company Private Ltd
- Aboitiz Power Corporation - Philippines
- India Bulls Power Limited - India
- Chettinad Cement Corporation Ltd - India
- Thiess Contractors Indonesia
- Energy Link Ltd, New Zealand
- Dalmia Cement Bharat India
- GAC Shipping (India) Pvt Ltd
- Tata Chemicals Ltd - India
- Samtan Co., Ltd - South Korea
- European Bulk Services B.V. - Netherlands
- Attock Cement Pakistan Limited
- Metalloyd Limited - United Kingdom
- Eastern Energy - Thailand
- Leighton Contractors Pty Ltd - Australia
- GVK Power & Infra Limited - India
- Anglo American - United Kingdom
- Kideco Jaya Agung - Indonesia
- Edison Trading Spa - Italy
- Sree Jayajothi Cements Limited - India
- Kohat Cement Company Ltd. - Pakistan
- Bukit Makmur.PT - Indonesia
- Sojitz Corporation - Japan
- Bulk Trading Sa - Switzerland
- San Jose City I Power Corp, Philippines
- SMC Global Power, Philippines
- Sakthi Sugars Limited - India
- Manunggal Multi Energi - Indonesia
- Semirara Mining and Power Corporation, Philippines
- Kapuas Tunggal Persada - Indonesia
- Bhushan Steel Limited - India
- Vijayanagar Sugar Pvt Ltd - India
- Chamber of Mines of South Africa
- Kalimantan Lumbung Energi - Indonesia
- Iligan Light & Power Inc, Philippines
- Bangladesh Power Developement Board
- Vedanta Resources Plc - India
- Electricity Authority, New Zealand
- Ind-Barath Power Infra Limited - India
- Ministry of Finance - Indonesia
- CIMB Investment Bank - Malaysia
- Lanco Infratech Ltd - India
- Mjunction Services Limited - India
- Merrill Lynch Commodities Europe
- Maharashtra Electricity Regulatory Commission - India
- White Energy Company Limited
- Grasim Industreis Ltd - India
- Intertek Mineral Services - Indonesia
- Global Business Power Corporation, Philippines
- Simpson Spence & Young - Indonesia
- Parry Sugars Refinery, India
- Bharathi Cement Corporation - India
- IEA Clean Coal Centre - UK
- Ceylon Electricity Board - Sri Lanka
- Bukit Asam (Persero) Tbk - Indonesia
- PNOC Exploration Corporation - Philippines
- The State Trading Corporation of India Ltd
- Madhucon Powers Ltd - India
- Kaltim Prima Coal - Indonesia
- Maheswari Brothers Coal Limited - India
- Aditya Birla Group - India
- Sinarmas Energy and Mining - Indonesia
- Coal and Oil Company - UAE
- Sical Logistics Limited - India
- Carbofer General Trading SA - India
- Directorate Of Revenue Intelligence - India
- Meralco Power Generation, Philippines
- International Coal Ventures Pvt Ltd - India
- Siam City Cement PLC, Thailand
- Australian Coal Association
- Minerals Council of Australia
- Neyveli Lignite Corporation Ltd, - India
- ASAPP Information Group - India
- MS Steel International - UAE
- Indonesian Coal Mining Association
- Karaikal Port Pvt Ltd - India
- Interocean Group of Companies - India
- ICICI Bank Limited - India
- Savvy Resources Ltd - HongKong
- Baramulti Group, Indonesia
- Meenaskhi Energy Private Limited - India
- Wilmar Investment Holdings
- IHS Mccloskey Coal Group - USA
- Bhatia International Limited - India
- Tamil Nadu electricity Board
- PetroVietnam Power Coal Import and Supply Company
- Toyota Tsusho Corporation, Japan
- McConnell Dowell - Australia
- Energy Development Corp, Philippines
- Petron Corporation, Philippines
- Gujarat Mineral Development Corp Ltd - India
- Alfred C Toepfer International GmbH - Germany
- Billiton Holdings Pty Ltd - Australia
- Planning Commission, India
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- GN Power Mariveles Coal Plant, Philippines
- SN Aboitiz Power Inc, Philippines
- Africa Commodities Group - South Africa
- Altura Mining Limited, Indonesia
- VISA Power Limited - India
- London Commodity Brokers - England
- Australian Commodity Traders Exchange
- Heidelberg Cement - Germany
- New Zealand Coal & Carbon
- Global Coal Blending Company Limited - Australia
- Rashtriya Ispat Nigam Limited - India
- AsiaOL BioFuels Corp., Philippines
- Indika Energy - Indonesia
- PTC India Limited - India
- Power Finance Corporation Ltd., India
- Borneo Indobara - Indonesia
- OPG Power Generation Pvt Ltd - India
- Global Green Power PLC Corporation, Philippines
- Essar Steel Hazira Ltd - India
- Medco Energi Mining Internasional
- Krishnapatnam Port Company Ltd. - India
- Coalindo Energy - Indonesia
- Renaissance Capital - South Africa
- Star Paper Mills Limited - India
- Trasteel International SA, Italy
- Straits Asia Resources Limited - Singapore
- Orica Australia Pty. Ltd.
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