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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, 11 June 18
AUSTRALIAN COAL PRICES HIT 6-YEAR HIGH AS ASIA DEMAND SPIKES - REUTERS
Australian thermal coal prices have risen to their highest level since 2012 as hot weather across North Asia spurs buying ahead of the peak summer ...
Monday, 11 June 18
ANALYSING A NEW AGE OF AUTONOMOUS VESSELS - IMO
The International Maritime Organization answers the questions of Government Europa on how the next generation of autonomous vessels can be regulate ...
Friday, 08 June 18
AUSTRALIAN THERMAL COAL PRICES SURGE AS ASIA DEMAND HEATS UP - REUTERS
Australian thermal coal prices have hit their highest level since late 2016 as the market heats up on strong demand across North Asia and China in ...
Wednesday, 06 June 18
SHIPPING MARKET INSIGHT - KATERINA RESTIS
As observed last month the price of oil hit its highest level since November 2014 reaching $80 per barrel. Global oil demand growth for 2018 was sl ...
Tuesday, 05 June 18
SOUTH KOREA'S SULPHUR CAP ALTERS ASIAN COAL MARKET DYNAMICS: RUSSELL
South Korea’s imposition of a strict sulphur cap on its imported coal is likely to cause ripples across Asia’s markets for the pollutin ...
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- Power Finance Corporation Ltd., India
- Global Green Power PLC Corporation, Philippines
- Vedanta Resources Plc - India
- Alfred C Toepfer International GmbH - Germany
- Asmin Koalindo Tuhup - Indonesia
- Mjunction Services Limited - India
- Xindia Steels Limited - India
- Agrawal Coal Company - India
- Anglo American - United Kingdom
- Toyota Tsusho Corporation, Japan
- Latin American Coal - Colombia
- Chamber of Mines of South Africa
- Wood Mackenzie - Singapore
- Semirara Mining Corp, Philippines
- Karaikal Port Pvt Ltd - India
- Deloitte Consulting - India
- Georgia Ports Authority, United States
- Port Waratah Coal Services - Australia
- Kepco SPC Power Corporation, Philippines
- Petron Corporation, Philippines
- Kaltim Prima Coal - Indonesia
- Ministry of Transport, Egypt
- IEA Clean Coal Centre - UK
- Gujarat Electricity Regulatory Commission - India
- Offshore Bulk Terminal Pte Ltd, Singapore
- The University of Queensland
- TeaM Sual Corporation - Philippines
- Binh Thuan Hamico - Vietnam
- Central Electricity Authority - India
- Energy Development Corp, Philippines
- SN Aboitiz Power Inc, Philippines
- India Bulls Power Limited - India
- Eastern Coal Council - USA
- GVK Power & Infra Limited - India
- International Coal Ventures Pvt Ltd - India
- Posco Energy - South Korea
- Indogreen Group - Indonesia
- LBH Netherlands Bv - Netherlands
- Oldendorff Carriers - Singapore
- Electricity Authority, New Zealand
- Bayan Resources Tbk. - Indonesia
- Jindal Steel & Power Ltd - India
- Jaiprakash Power Ventures ltd
- Heidelberg Cement - Germany
- Price Waterhouse Coopers - Russia
- Bulk Trading Sa - Switzerland
- Dalmia Cement Bharat India
- Indian Energy Exchange, India
- SMC Global Power, Philippines
- Coastal Gujarat Power Limited - India
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Globalindo Alam Lestari - Indonesia
- Neyveli Lignite Corporation Ltd, - India
- The Treasury - Australian Government
- Merrill Lynch Commodities Europe
- Cigading International Bulk Terminal - Indonesia
- Star Paper Mills Limited - India
- Tata Chemicals Ltd - India
- Bhatia International Limited - India
- Kartika Selabumi Mining - Indonesia
- Meenaskhi Energy Private Limited - India
- Coalindo Energy - Indonesia
- Iligan Light & Power Inc, Philippines
- PetroVietnam Power Coal Import and Supply Company
- Thiess Contractors Indonesia
- Mercuria Energy - Indonesia
- Lanco Infratech Ltd - India
- Vijayanagar Sugar Pvt Ltd - India
- Pendopo Energi Batubara - Indonesia
- New Zealand Coal & Carbon
- Salva Resources Pvt Ltd - India
- Antam Resourcindo - Indonesia
- Aditya Birla Group - India
- Bahari Cakrawala Sebuku - Indonesia
- Kobexindo Tractors - Indoneisa
- Miang Besar Coal Terminal - Indonesia
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Planning Commission, India
- European Bulk Services B.V. - Netherlands
- Eastern Energy - Thailand
- Pipit Mutiara Jaya. PT, Indonesia
- CIMB Investment Bank - Malaysia
- Holcim Trading Pte Ltd - Singapore
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Edison Trading Spa - Italy
- Aboitiz Power Corporation - Philippines
- Larsen & Toubro Limited - India
- McConnell Dowell - Australia
- Marubeni Corporation - India
- Altura Mining Limited, Indonesia
- Sarangani Energy Corporation, Philippines
- Bukit Asam (Persero) Tbk - Indonesia
- Essar Steel Hazira Ltd - India
- Mercator Lines Limited - India
- Electricity Generating Authority of Thailand
- Minerals Council of Australia
- Orica Australia Pty. Ltd.
- Sakthi Sugars Limited - India
- San Jose City I Power Corp, Philippines
- Semirara Mining and Power Corporation, Philippines
- MS Steel International - UAE
- Bhoruka Overseas - Indonesia
- Makarim & Taira - Indonesia
- Riau Bara Harum - Indonesia
- Cement Manufacturers Association - India
- Siam City Cement - Thailand
- Kalimantan Lumbung Energi - Indonesia
- Videocon Industries ltd - India
- Siam City Cement PLC, Thailand
- Rio Tinto Coal - Australia
- The State Trading Corporation of India Ltd
- Indonesian Coal Mining Association
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Tamil Nadu electricity Board
- Banpu Public Company Limited - Thailand
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Interocean Group of Companies - India
- Parry Sugars Refinery, India
- Economic Council, Georgia
- IHS Mccloskey Coal Group - USA
- Bhushan Steel Limited - India
- OPG Power Generation Pvt Ltd - India
- Samtan Co., Ltd - South Korea
- Rashtriya Ispat Nigam Limited - India
- Sinarmas Energy and Mining - Indonesia
- South Luzon Thermal Energy Corporation
- SMG Consultants - Indonesia
- Parliament of New Zealand
- PowerSource Philippines DevCo
- Chettinad Cement Corporation Ltd - India
- Leighton Contractors Pty Ltd - Australia
- Bharathi Cement Corporation - India
- Sree Jayajothi Cements Limited - India
- Jorong Barutama Greston.PT - Indonesia
- Sical Logistics Limited - India
- London Commodity Brokers - England
- VISA Power Limited - India
- CNBM International Corporation - China
- Indika Energy - Indonesia
- TNB Fuel Sdn Bhd - Malaysia
- Madhucon Powers Ltd - India
- Indian Oil Corporation Limited
- Independent Power Producers Association of India
- Singapore Mercantile Exchange
- Manunggal Multi Energi - Indonesia
- AsiaOL BioFuels Corp., Philippines
- Ambuja Cements Ltd - India
- Karbindo Abesyapradhi - Indoneisa
- Trasteel International SA, Italy
- Vizag Seaport Private Limited - India
- Formosa Plastics Group - Taiwan
- Bukit Baiduri Energy - Indonesia
- Thai Mozambique Logistica
- Wilmar Investment Holdings
- GN Power Mariveles Coal Plant, Philippines
- Simpson Spence & Young - Indonesia
- PNOC Exploration Corporation - Philippines
- Australian Commodity Traders Exchange
- Directorate General of MIneral and Coal - Indonesia
- Directorate Of Revenue Intelligence - India
- Malabar Cements Ltd - India
- Therma Luzon, Inc, Philippines
- Global Business Power Corporation, Philippines
- Orica Mining Services - Indonesia
- Attock Cement Pakistan Limited
- Krishnapatnam Port Company Ltd. - India
- Sindya Power Generating Company Private Ltd
- Indo Tambangraya Megah - Indonesia
- Energy Link Ltd, New Zealand
- Barasentosa Lestari - Indonesia
- Australian Coal Association
- Ministry of Mines - Canada
- Billiton Holdings Pty Ltd - Australia
- Commonwealth Bank - Australia
- Africa Commodities Group - South Africa
- Baramulti Group, Indonesia
- Standard Chartered Bank - UAE
- PTC India Limited - India
- Metalloyd Limited - United Kingdom
- Coal and Oil Company - UAE
- Uttam Galva Steels Limited - India
- Meralco Power Generation, Philippines
- Ceylon Electricity Board - Sri Lanka
- Global Coal Blending Company Limited - Australia
- ASAPP Information Group - India
- Maharashtra Electricity Regulatory Commission - India
- Central Java Power - Indonesia
- Kapuas Tunggal Persada - Indonesia
- Bank of Tokyo Mitsubishi UFJ Ltd
- Kumho Petrochemical, South Korea
- Borneo Indobara - Indonesia
- Petrochimia International Co. Ltd.- Taiwan
- Kohat Cement Company Ltd. - Pakistan
- GAC Shipping (India) Pvt Ltd
- Mintek Dendrill Indonesia
- Straits Asia Resources Limited - Singapore
- Timah Investasi Mineral - Indoneisa
- Savvy Resources Ltd - HongKong
- Maheswari Brothers Coal Limited - India
- Sojitz Corporation - Japan
- Ministry of Finance - Indonesia
- GMR Energy Limited - India
- Intertek Mineral Services - Indonesia
- Gujarat Sidhee Cement - India
- Bangladesh Power Developement Board
- Medco Energi Mining Internasional
- Goldman Sachs - Singapore
- Bukit Makmur.PT - Indonesia
- Kideco Jaya Agung - Indonesia
- Gujarat Mineral Development Corp Ltd - India
- Grasim Industreis Ltd - India
- Ind-Barath Power Infra Limited - India
- ICICI Bank Limited - India
- White Energy Company Limited
- Romanian Commodities Exchange
- Carbofer General Trading SA - India
- Renaissance Capital - South Africa
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