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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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Wednesday, 11 April 18
CHINA UTILITIES PLAN NEW COAL IMPORT PRICE INDEX TO CURB VOLATILITY - REUTERS
China’s major utilities are preparing to launch their own coal price index for imports, an official at China Huaneng Group said, in a move th ...
Wednesday, 11 April 18
US-CHINA TARIFF THREATS RAISE GLOBAL TRADE RISKS - FITCH
Escalating tariff proposals by the U.S. and Chinese governments are increasing the risks of a full-blown trade war, says Fitch Ratings. The most li ...
Tuesday, 10 April 18
BUMA GRANTED ADDITIONAL LOAN FACILITY FROM BTMU TO SUPPORT GROWTH
Press Release: PT Delta Dunia Makmur Tbk. is pleased to announce that its subsidiary, PT Bukit Makmur Mandiri Utama ("BUMA"), signed an a ...
Monday, 09 April 18
APRIL INDONESIAN COAL PRICE REFERENCE DROPS TO LOWEST IN 2018
COALspot.com: According to latest ministerial decree, the Indonesian Coal Price Reference (HBA) decline 6.98 per cent in April 2018 compared to Mar ...
Friday, 06 April 18
TOP MINER BHP QUITS WORLD COAL ASSOCIATION OVER CLIMATE CLASH - BLOOMBERG
BHP Billiton Ltd. has severed ties with the World Coal Association over a clash of views on how to combat climate change, with the mining giant say ...
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- ASAPP Information Group - India
- Larsen & Toubro Limited - India
- Coalindo Energy - Indonesia
- Wood Mackenzie - Singapore
- Neyveli Lignite Corporation Ltd, - India
- Karaikal Port Pvt Ltd - India
- Iligan Light & Power Inc, Philippines
- Billiton Holdings Pty Ltd - Australia
- GVK Power & Infra Limited - India
- Jorong Barutama Greston.PT - Indonesia
- Salva Resources Pvt Ltd - India
- AsiaOL BioFuels Corp., Philippines
- Electricity Generating Authority of Thailand
- TNB Fuel Sdn Bhd - Malaysia
- White Energy Company Limited
- Aboitiz Power Corporation - Philippines
- The Treasury - Australian Government
- Mintek Dendrill Indonesia
- McConnell Dowell - Australia
- GMR Energy Limited - India
- LBH Netherlands Bv - Netherlands
- The State Trading Corporation of India Ltd
- Altura Mining Limited, Indonesia
- Ceylon Electricity Board - Sri Lanka
- Vedanta Resources Plc - India
- PTC India Limited - India
- Global Green Power PLC Corporation, Philippines
- Africa Commodities Group - South Africa
- Alfred C Toepfer International GmbH - Germany
- Formosa Plastics Group - Taiwan
- Electricity Authority, New Zealand
- Gujarat Electricity Regulatory Commission - India
- Thai Mozambique Logistica
- Energy Link Ltd, New Zealand
- Manunggal Multi Energi - Indonesia
- Coal and Oil Company - UAE
- Gujarat Mineral Development Corp Ltd - India
- London Commodity Brokers - England
- Jindal Steel & Power Ltd - India
- India Bulls Power Limited - India
- Ministry of Finance - Indonesia
- Meralco Power Generation, Philippines
- Deloitte Consulting - India
- Grasim Industreis Ltd - India
- Orica Mining Services - Indonesia
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Sarangani Energy Corporation, Philippines
- Malabar Cements Ltd - India
- International Coal Ventures Pvt Ltd - India
- Makarim & Taira - Indonesia
- Star Paper Mills Limited - India
- Gujarat Sidhee Cement - India
- Miang Besar Coal Terminal - Indonesia
- Vizag Seaport Private Limited - India
- Kartika Selabumi Mining - Indonesia
- Economic Council, Georgia
- Australian Commodity Traders Exchange
- Leighton Contractors Pty Ltd - Australia
- Pendopo Energi Batubara - Indonesia
- Attock Cement Pakistan Limited
- Sinarmas Energy and Mining - Indonesia
- Price Waterhouse Coopers - Russia
- OPG Power Generation Pvt Ltd - India
- GAC Shipping (India) Pvt Ltd
- CNBM International Corporation - China
- Minerals Council of Australia
- Merrill Lynch Commodities Europe
- CIMB Investment Bank - Malaysia
- New Zealand Coal & Carbon
- Rashtriya Ispat Nigam Limited - India
- Madhucon Powers Ltd - India
- Rio Tinto Coal - Australia
- Pipit Mutiara Jaya. PT, Indonesia
- Eastern Coal Council - USA
- Kobexindo Tractors - Indoneisa
- Tamil Nadu electricity Board
- Siam City Cement - Thailand
- Bhoruka Overseas - Indonesia
- Indian Oil Corporation Limited
- Petrochimia International Co. Ltd.- Taiwan
- Kaltim Prima Coal - Indonesia
- Sree Jayajothi Cements Limited - India
- Australian Coal Association
- Sical Logistics Limited - India
- Commonwealth Bank - Australia
- Anglo American - United Kingdom
- Kepco SPC Power Corporation, Philippines
- Romanian Commodities Exchange
- Toyota Tsusho Corporation, Japan
- Posco Energy - South Korea
- Parliament of New Zealand
- Asmin Koalindo Tuhup - Indonesia
- Bhushan Steel Limited - India
- Wilmar Investment Holdings
- Offshore Bulk Terminal Pte Ltd, Singapore
- PetroVietnam Power Coal Import and Supply Company
- Carbofer General Trading SA - India
- Chettinad Cement Corporation Ltd - India
- Directorate Of Revenue Intelligence - India
- Samtan Co., Ltd - South Korea
- Kumho Petrochemical, South Korea
- Bhatia International Limited - India
- Indogreen Group - Indonesia
- Metalloyd Limited - United Kingdom
- Directorate General of MIneral and Coal - Indonesia
- European Bulk Services B.V. - Netherlands
- Globalindo Alam Lestari - Indonesia
- Bahari Cakrawala Sebuku - Indonesia
- Borneo Indobara - Indonesia
- Global Coal Blending Company Limited - Australia
- Baramulti Group, Indonesia
- The University of Queensland
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Mercator Lines Limited - India
- IHS Mccloskey Coal Group - USA
- Aditya Birla Group - India
- Heidelberg Cement - Germany
- Ambuja Cements Ltd - India
- Central Electricity Authority - India
- Planning Commission, India
- Indian Energy Exchange, India
- Oldendorff Carriers - Singapore
- Kideco Jaya Agung - Indonesia
- Ministry of Mines - Canada
- Antam Resourcindo - Indonesia
- Indika Energy - Indonesia
- Energy Development Corp, Philippines
- Marubeni Corporation - India
- Timah Investasi Mineral - Indoneisa
- Trasteel International SA, Italy
- IEA Clean Coal Centre - UK
- Medco Energi Mining Internasional
- Bayan Resources Tbk. - Indonesia
- Singapore Mercantile Exchange
- Essar Steel Hazira Ltd - India
- Uttam Galva Steels Limited - India
- SMC Global Power, Philippines
- Vijayanagar Sugar Pvt Ltd - India
- Bharathi Cement Corporation - India
- Videocon Industries ltd - India
- Savvy Resources Ltd - HongKong
- Bukit Makmur.PT - Indonesia
- SMG Consultants - Indonesia
- Banpu Public Company Limited - Thailand
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Georgia Ports Authority, United States
- Bank of Tokyo Mitsubishi UFJ Ltd
- Edison Trading Spa - Italy
- Karbindo Abesyapradhi - Indoneisa
- Intertek Mineral Services - Indonesia
- Maheswari Brothers Coal Limited - India
- Jaiprakash Power Ventures ltd
- Mjunction Services Limited - India
- Riau Bara Harum - Indonesia
- SN Aboitiz Power Inc, Philippines
- Renaissance Capital - South Africa
- Barasentosa Lestari - Indonesia
- Sakthi Sugars Limited - India
- Cigading International Bulk Terminal - Indonesia
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Meenaskhi Energy Private Limited - India
- Indo Tambangraya Megah - Indonesia
- Simpson Spence & Young - Indonesia
- Global Business Power Corporation, Philippines
- Bangladesh Power Developement Board
- Bukit Asam (Persero) Tbk - Indonesia
- Binh Thuan Hamico - Vietnam
- San Jose City I Power Corp, Philippines
- Bulk Trading Sa - Switzerland
- Siam City Cement PLC, Thailand
- Coastal Gujarat Power Limited - India
- Mercuria Energy - Indonesia
- Independent Power Producers Association of India
- Port Waratah Coal Services - Australia
- Bukit Baiduri Energy - Indonesia
- Straits Asia Resources Limited - Singapore
- TeaM Sual Corporation - Philippines
- Chamber of Mines of South Africa
- Maharashtra Electricity Regulatory Commission - India
- Cement Manufacturers Association - India
- Kapuas Tunggal Persada - Indonesia
- Parry Sugars Refinery, India
- Standard Chartered Bank - UAE
- VISA Power Limited - India
- ICICI Bank Limited - India
- Latin American Coal - Colombia
- PowerSource Philippines DevCo
- MS Steel International - UAE
- Therma Luzon, Inc, Philippines
- Ministry of Transport, Egypt
- Kohat Cement Company Ltd. - Pakistan
- PNOC Exploration Corporation - Philippines
- Holcim Trading Pte Ltd - Singapore
- Xindia Steels Limited - India
- Semirara Mining Corp, Philippines
- Orica Australia Pty. Ltd.
- Petron Corporation, Philippines
- Dalmia Cement Bharat India
- Sindya Power Generating Company Private Ltd
- Tata Chemicals Ltd - India
- Goldman Sachs - Singapore
- Eastern Energy - Thailand
- South Luzon Thermal Energy Corporation
- Sojitz Corporation - Japan
- Ind-Barath Power Infra Limited - India
- Central Java Power - Indonesia
- Indonesian Coal Mining Association
- Semirara Mining and Power Corporation, Philippines
- Thiess Contractors Indonesia
- Agrawal Coal Company - India
- Power Finance Corporation Ltd., India
- Kalimantan Lumbung Energi - Indonesia
- Interocean Group of Companies - India
- Krishnapatnam Port Company Ltd. - India
- GN Power Mariveles Coal Plant, Philippines
- Lanco Infratech Ltd - India
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