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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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Friday, 30 March 18
SHIPPING INDUSTRY CONFIDENCE HITS FOUR-YEAR HIGH - MOORE STEPHENS
Shipping Confidence Survey
In February 2018, the average confidence level expressed by respondents was up from 6.2 in November 2017 t ...
Friday, 30 March 18
EXPLAINING POLAND'S COAL PARADOX - FORBES
In the U.S. coal is succumbing to market forces despite the Trump Administration’s push to support the industry. Abundant, cheap and cleaner ...
Friday, 30 March 18
THIESS SECURES $140M MT OWEN INCREASE
Thiess has secured a A$140 million increase to its contract with Glencore for coal mining services at Mt Owen in the Hunter Valley, Australia. Mt O ...
Wednesday, 28 March 18
THIESS WINS $280M WAHANA EXTENSION
Thiess has been awarded a three-year $280 million contract extension at the Wahana coal mine in South Kalimantan, Indonesia.
According to Thie ...
Wednesday, 28 March 18
RIO TINTO TO SELL KESTREL MINE FOR $2.25 BILLION - REUTERS
Rio Tinto sold its remaining coal asset Kestrel in Australia to private equity manager EMR Capital and Indonesia’s Adaro Energy Tbk for $2.25 ...
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- Aboitiz Power Corporation - Philippines
- Kobexindo Tractors - Indoneisa
- Semirara Mining Corp, Philippines
- Parliament of New Zealand
- Bukit Makmur.PT - Indonesia
- Oldendorff Carriers - Singapore
- MS Steel International - UAE
- Simpson Spence & Young - Indonesia
- New Zealand Coal & Carbon
- Videocon Industries ltd - India
- International Coal Ventures Pvt Ltd - India
- Riau Bara Harum - Indonesia
- Makarim & Taira - Indonesia
- IHS Mccloskey Coal Group - USA
- Latin American Coal - Colombia
- Sojitz Corporation - Japan
- South Luzon Thermal Energy Corporation
- White Energy Company Limited
- Electricity Authority, New Zealand
- Pipit Mutiara Jaya. PT, Indonesia
- Kapuas Tunggal Persada - Indonesia
- Asmin Koalindo Tuhup - Indonesia
- Standard Chartered Bank - UAE
- Mercator Lines Limited - India
- San Jose City I Power Corp, Philippines
- Directorate General of MIneral and Coal - Indonesia
- Sarangani Energy Corporation, Philippines
- Rashtriya Ispat Nigam Limited - India
- Kartika Selabumi Mining - Indonesia
- Alfred C Toepfer International GmbH - Germany
- Carbofer General Trading SA - India
- Sakthi Sugars Limited - India
- Jindal Steel & Power Ltd - India
- Bangladesh Power Developement Board
- ICICI Bank Limited - India
- London Commodity Brokers - England
- Maharashtra Electricity Regulatory Commission - India
- Formosa Plastics Group - Taiwan
- Indian Oil Corporation Limited
- ASAPP Information Group - India
- Bulk Trading Sa - Switzerland
- Interocean Group of Companies - India
- Parry Sugars Refinery, India
- Krishnapatnam Port Company Ltd. - India
- Lanco Infratech Ltd - India
- Ind-Barath Power Infra Limited - India
- TeaM Sual Corporation - Philippines
- Kepco SPC Power Corporation, Philippines
- SMC Global Power, Philippines
- Anglo American - United Kingdom
- Dalmia Cement Bharat India
- Mercuria Energy - Indonesia
- Coalindo Energy - Indonesia
- GVK Power & Infra Limited - India
- Xindia Steels Limited - India
- Petrochimia International Co. Ltd.- Taiwan
- Energy Link Ltd, New Zealand
- Sical Logistics Limited - India
- Malabar Cements Ltd - India
- Bhushan Steel Limited - India
- Karbindo Abesyapradhi - Indoneisa
- Coal and Oil Company - UAE
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Holcim Trading Pte Ltd - Singapore
- Petron Corporation, Philippines
- Vedanta Resources Plc - India
- Independent Power Producers Association of India
- Mintek Dendrill Indonesia
- Renaissance Capital - South Africa
- Ministry of Mines - Canada
- Indian Energy Exchange, India
- Neyveli Lignite Corporation Ltd, - India
- Metalloyd Limited - United Kingdom
- Eastern Coal Council - USA
- Bhoruka Overseas - Indonesia
- Meenaskhi Energy Private Limited - India
- Iligan Light & Power Inc, Philippines
- Directorate Of Revenue Intelligence - India
- GMR Energy Limited - India
- Goldman Sachs - Singapore
- Ministry of Finance - Indonesia
- Baramulti Group, Indonesia
- Jorong Barutama Greston.PT - Indonesia
- Bharathi Cement Corporation - India
- Siam City Cement PLC, Thailand
- Maheswari Brothers Coal Limited - India
- VISA Power Limited - India
- LBH Netherlands Bv - Netherlands
- Power Finance Corporation Ltd., India
- Star Paper Mills Limited - India
- Georgia Ports Authority, United States
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Chettinad Cement Corporation Ltd - India
- Africa Commodities Group - South Africa
- GAC Shipping (India) Pvt Ltd
- Agrawal Coal Company - India
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Sindya Power Generating Company Private Ltd
- Altura Mining Limited, Indonesia
- GN Power Mariveles Coal Plant, Philippines
- Commonwealth Bank - Australia
- Timah Investasi Mineral - Indoneisa
- SMG Consultants - Indonesia
- PetroVietnam Power Coal Import and Supply Company
- Central Electricity Authority - India
- Coastal Gujarat Power Limited - India
- Rio Tinto Coal - Australia
- Uttam Galva Steels Limited - India
- Global Green Power PLC Corporation, Philippines
- Offshore Bulk Terminal Pte Ltd, Singapore
- Leighton Contractors Pty Ltd - Australia
- Medco Energi Mining Internasional
- Bank of Tokyo Mitsubishi UFJ Ltd
- Bhatia International Limited - India
- Billiton Holdings Pty Ltd - Australia
- IEA Clean Coal Centre - UK
- Energy Development Corp, Philippines
- OPG Power Generation Pvt Ltd - India
- Orica Australia Pty. Ltd.
- Salva Resources Pvt Ltd - India
- Pendopo Energi Batubara - Indonesia
- Australian Coal Association
- Kohat Cement Company Ltd. - Pakistan
- Australian Commodity Traders Exchange
- Straits Asia Resources Limited - Singapore
- Aditya Birla Group - India
- Economic Council, Georgia
- Grasim Industreis Ltd - India
- CIMB Investment Bank - Malaysia
- Heidelberg Cement - Germany
- Kumho Petrochemical, South Korea
- Chamber of Mines of South Africa
- Orica Mining Services - Indonesia
- PTC India Limited - India
- Gujarat Sidhee Cement - India
- Wilmar Investment Holdings
- Savvy Resources Ltd - HongKong
- Bukit Baiduri Energy - Indonesia
- McConnell Dowell - Australia
- Gujarat Mineral Development Corp Ltd - India
- Bukit Asam (Persero) Tbk - Indonesia
- Romanian Commodities Exchange
- Miang Besar Coal Terminal - Indonesia
- Wood Mackenzie - Singapore
- The Treasury - Australian Government
- PowerSource Philippines DevCo
- Global Coal Blending Company Limited - Australia
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Thai Mozambique Logistica
- Borneo Indobara - Indonesia
- Central Java Power - Indonesia
- Tata Chemicals Ltd - India
- Price Waterhouse Coopers - Russia
- Bahari Cakrawala Sebuku - Indonesia
- Global Business Power Corporation, Philippines
- Mjunction Services Limited - India
- PNOC Exploration Corporation - Philippines
- TNB Fuel Sdn Bhd - Malaysia
- Vijayanagar Sugar Pvt Ltd - India
- Karaikal Port Pvt Ltd - India
- Semirara Mining and Power Corporation, Philippines
- Indogreen Group - Indonesia
- European Bulk Services B.V. - Netherlands
- Manunggal Multi Energi - Indonesia
- Intertek Mineral Services - Indonesia
- Gujarat Electricity Regulatory Commission - India
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Posco Energy - South Korea
- Siam City Cement - Thailand
- Jaiprakash Power Ventures ltd
- Vizag Seaport Private Limited - India
- Eastern Energy - Thailand
- Madhucon Powers Ltd - India
- Barasentosa Lestari - Indonesia
- CNBM International Corporation - China
- Binh Thuan Hamico - Vietnam
- Essar Steel Hazira Ltd - India
- Ceylon Electricity Board - Sri Lanka
- Larsen & Toubro Limited - India
- Deloitte Consulting - India
- Thiess Contractors Indonesia
- Antam Resourcindo - Indonesia
- Indo Tambangraya Megah - Indonesia
- Kideco Jaya Agung - Indonesia
- Meralco Power Generation, Philippines
- Therma Luzon, Inc, Philippines
- Sinarmas Energy and Mining - Indonesia
- Edison Trading Spa - Italy
- Merrill Lynch Commodities Europe
- Ambuja Cements Ltd - India
- Globalindo Alam Lestari - Indonesia
- Indika Energy - Indonesia
- Minerals Council of Australia
- The State Trading Corporation of India Ltd
- Kalimantan Lumbung Energi - Indonesia
- Trasteel International SA, Italy
- India Bulls Power Limited - India
- The University of Queensland
- Marubeni Corporation - India
- Cement Manufacturers Association - India
- Ministry of Transport, Egypt
- Electricity Generating Authority of Thailand
- Cigading International Bulk Terminal - Indonesia
- Bayan Resources Tbk. - Indonesia
- Samtan Co., Ltd - South Korea
- Kaltim Prima Coal - Indonesia
- AsiaOL BioFuels Corp., Philippines
- Port Waratah Coal Services - Australia
- Sree Jayajothi Cements Limited - India
- Tamil Nadu electricity Board
- Indonesian Coal Mining Association
- Attock Cement Pakistan Limited
- Planning Commission, India
- Banpu Public Company Limited - Thailand
- Singapore Mercantile Exchange
- SN Aboitiz Power Inc, Philippines
- Toyota Tsusho Corporation, Japan
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