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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, 27 March 18
SHIPPING MARKET ANALYSIS - GERRY LATHROP
With the almost complete phase out of Tier II new-building slots on our door step, along with the plethora of emissions related articles seemingly ...
Friday, 23 March 18
RIO TINTO AGREES SALE OF HAIL CREEK AND VALERIA TO GLENCORE FOR $1.7 BILLION
Press Release: Rio Tinto has entered into a binding agreement with Glencore for the sale of its entire interests in the Hail Creek coal mine and th ...
Wednesday, 21 March 18
CHINA'S RAW COAL OUTPUT UP IN 2017, FIRST GROWTH SINCE 2014 - XINHUA
China’s raw coal output rose in 2017 due to rebounding demand and high-quality capacity, according to the National Bureau of Statistics (NBS) ...
Wednesday, 21 March 18
MARKET INSIGHT - CHRISTOPHER T. WHITTY
President’s Trump administration proposed tariffs on steel and aluminum imports in an attempt to target China and Europe among others. Earlie ...
Tuesday, 20 March 18
SHIPPING MARKET ANALYSIS - GEORGE LAZARIDIS
It has been a chilling start to the week for the global economy, with the vast majority of stock exchanges noting a fair drop, after a series of se ...
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- GMR Energy Limited - India
- Uttam Galva Steels Limited - India
- Sree Jayajothi Cements Limited - India
- Wood Mackenzie - Singapore
- Chettinad Cement Corporation Ltd - India
- Coalindo Energy - Indonesia
- Price Waterhouse Coopers - Russia
- The State Trading Corporation of India Ltd
- Barasentosa Lestari - Indonesia
- GAC Shipping (India) Pvt Ltd
- Heidelberg Cement - Germany
- Meenaskhi Energy Private Limited - India
- Kalimantan Lumbung Energi - Indonesia
- Asmin Koalindo Tuhup - Indonesia
- Indian Energy Exchange, India
- Medco Energi Mining Internasional
- Kobexindo Tractors - Indoneisa
- Samtan Co., Ltd - South Korea
- Sojitz Corporation - Japan
- Central Electricity Authority - India
- Indika Energy - Indonesia
- Ambuja Cements Ltd - India
- European Bulk Services B.V. - Netherlands
- Petrochimia International Co. Ltd.- Taiwan
- Jaiprakash Power Ventures ltd
- Global Green Power PLC Corporation, Philippines
- Power Finance Corporation Ltd., India
- Meralco Power Generation, Philippines
- Ceylon Electricity Board - Sri Lanka
- Karaikal Port Pvt Ltd - India
- Bangladesh Power Developement Board
- Orica Australia Pty. Ltd.
- Rashtriya Ispat Nigam Limited - India
- Dalmia Cement Bharat India
- New Zealand Coal & Carbon
- AsiaOL BioFuels Corp., Philippines
- Parliament of New Zealand
- Kumho Petrochemical, South Korea
- PNOC Exploration Corporation - Philippines
- Grasim Industreis Ltd - India
- Thiess Contractors Indonesia
- Vijayanagar Sugar Pvt Ltd - India
- CIMB Investment Bank - Malaysia
- ICICI Bank Limited - India
- Petron Corporation, Philippines
- India Bulls Power Limited - India
- Videocon Industries ltd - India
- Alfred C Toepfer International GmbH - Germany
- PTC India Limited - India
- Goldman Sachs - Singapore
- Mercuria Energy - Indonesia
- Toyota Tsusho Corporation, Japan
- Cement Manufacturers Association - India
- Vedanta Resources Plc - India
- ASAPP Information Group - India
- Kideco Jaya Agung - Indonesia
- Parry Sugars Refinery, India
- Gujarat Mineral Development Corp Ltd - India
- Karbindo Abesyapradhi - Indoneisa
- Siam City Cement - Thailand
- IHS Mccloskey Coal Group - USA
- Holcim Trading Pte Ltd - Singapore
- Independent Power Producers Association of India
- Bank of Tokyo Mitsubishi UFJ Ltd
- Makarim & Taira - Indonesia
- Trasteel International SA, Italy
- Economic Council, Georgia
- Renaissance Capital - South Africa
- Essar Steel Hazira Ltd - India
- Oldendorff Carriers - Singapore
- Manunggal Multi Energi - Indonesia
- Port Waratah Coal Services - Australia
- GN Power Mariveles Coal Plant, Philippines
- The Treasury - Australian Government
- VISA Power Limited - India
- Semirara Mining Corp, Philippines
- Sical Logistics Limited - India
- TeaM Sual Corporation - Philippines
- Electricity Generating Authority of Thailand
- SMG Consultants - Indonesia
- Straits Asia Resources Limited - Singapore
- The University of Queensland
- Central Java Power - Indonesia
- Deloitte Consulting - India
- Bharathi Cement Corporation - India
- Pendopo Energi Batubara - Indonesia
- Sindya Power Generating Company Private Ltd
- Lanco Infratech Ltd - India
- Kepco SPC Power Corporation, Philippines
- Sinarmas Energy and Mining - Indonesia
- Attock Cement Pakistan Limited
- Standard Chartered Bank - UAE
- Kohat Cement Company Ltd. - Pakistan
- Ind-Barath Power Infra Limited - India
- Coastal Gujarat Power Limited - India
- Thai Mozambique Logistica
- Commonwealth Bank - Australia
- IEA Clean Coal Centre - UK
- Savvy Resources Ltd - HongKong
- International Coal Ventures Pvt Ltd - India
- Bukit Baiduri Energy - Indonesia
- Offshore Bulk Terminal Pte Ltd, Singapore
- Directorate Of Revenue Intelligence - India
- Semirara Mining and Power Corporation, Philippines
- London Commodity Brokers - England
- Globalindo Alam Lestari - Indonesia
- Intertek Mineral Services - Indonesia
- Bukit Asam (Persero) Tbk - Indonesia
- Borneo Indobara - Indonesia
- Mercator Lines Limited - India
- Romanian Commodities Exchange
- Krishnapatnam Port Company Ltd. - India
- Mjunction Services Limited - India
- Interocean Group of Companies - India
- Indonesian Coal Mining Association
- Electricity Authority, New Zealand
- Riau Bara Harum - Indonesia
- MS Steel International - UAE
- Chamber of Mines of South Africa
- Jindal Steel & Power Ltd - India
- Siam City Cement PLC, Thailand
- Larsen & Toubro Limited - India
- Ministry of Finance - Indonesia
- Maheswari Brothers Coal Limited - India
- Edison Trading Spa - Italy
- Minerals Council of Australia
- Kaltim Prima Coal - Indonesia
- San Jose City I Power Corp, Philippines
- Tamil Nadu electricity Board
- Ministry of Transport, Egypt
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Bhatia International Limited - India
- Xindia Steels Limited - India
- Carbofer General Trading SA - India
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Bahari Cakrawala Sebuku - Indonesia
- Australian Coal Association
- OPG Power Generation Pvt Ltd - India
- Sarangani Energy Corporation, Philippines
- Bhushan Steel Limited - India
- Georgia Ports Authority, United States
- CNBM International Corporation - China
- Mintek Dendrill Indonesia
- Eastern Coal Council - USA
- Baramulti Group, Indonesia
- Aditya Birla Group - India
- GVK Power & Infra Limited - India
- Billiton Holdings Pty Ltd - Australia
- Maharashtra Electricity Regulatory Commission - India
- Directorate General of MIneral and Coal - Indonesia
- Wilmar Investment Holdings
- TNB Fuel Sdn Bhd - Malaysia
- LBH Netherlands Bv - Netherlands
- Global Coal Blending Company Limited - Australia
- Formosa Plastics Group - Taiwan
- Eastern Energy - Thailand
- PowerSource Philippines DevCo
- Leighton Contractors Pty Ltd - Australia
- Posco Energy - South Korea
- Therma Luzon, Inc, Philippines
- Star Paper Mills Limited - India
- Indo Tambangraya Megah - Indonesia
- Altura Mining Limited, Indonesia
- Planning Commission, India
- Ministry of Mines - Canada
- Aboitiz Power Corporation - Philippines
- Bukit Makmur.PT - Indonesia
- Orica Mining Services - Indonesia
- Merrill Lynch Commodities Europe
- Pipit Mutiara Jaya. PT, Indonesia
- Antam Resourcindo - Indonesia
- Sakthi Sugars Limited - India
- SMC Global Power, Philippines
- Salva Resources Pvt Ltd - India
- Australian Commodity Traders Exchange
- Gujarat Sidhee Cement - India
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Malabar Cements Ltd - India
- Banpu Public Company Limited - Thailand
- Iligan Light & Power Inc, Philippines
- Kapuas Tunggal Persada - Indonesia
- Agrawal Coal Company - India
- Bulk Trading Sa - Switzerland
- Coal and Oil Company - UAE
- Rio Tinto Coal - Australia
- SN Aboitiz Power Inc, Philippines
- Global Business Power Corporation, Philippines
- Binh Thuan Hamico - Vietnam
- Energy Development Corp, Philippines
- White Energy Company Limited
- Timah Investasi Mineral - Indoneisa
- Cigading International Bulk Terminal - Indonesia
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Madhucon Powers Ltd - India
- Simpson Spence & Young - Indonesia
- Jorong Barutama Greston.PT - Indonesia
- PetroVietnam Power Coal Import and Supply Company
- Neyveli Lignite Corporation Ltd, - India
- Bhoruka Overseas - Indonesia
- Tata Chemicals Ltd - India
- Anglo American - United Kingdom
- Indogreen Group - Indonesia
- Bayan Resources Tbk. - Indonesia
- Miang Besar Coal Terminal - Indonesia
- Latin American Coal - Colombia
- Gujarat Electricity Regulatory Commission - India
- Africa Commodities Group - South Africa
- Energy Link Ltd, New Zealand
- Kartika Selabumi Mining - Indonesia
- Metalloyd Limited - United Kingdom
- South Luzon Thermal Energy Corporation
- Marubeni Corporation - India
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- McConnell Dowell - Australia
- Vizag Seaport Private Limited - India
- Indian Oil Corporation Limited
- Singapore Mercantile Exchange
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