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Wednesday, 03 October 18
SHIPPING MARKET INSIGHT - KATERINA RESTIS
 The bunker fuel supply and availability landscape is close to its transformation with the enforcement of the IMO’s global 0.5% fuel Sulphur content cap regulation from 1st of January, 2020. Shipowners will have to choose between available options for them to comply with the regulation, while refiners will have to make suitable changes to refinery configuration and production in response to market demand. Thus far all parties will have to decide on the most efficient and appropriate solution that will suit their operations and allow them to remain commercially sustainable in the long run.
The swipe from the present 3.5% to 0.5% Sulphur content marine fuel will practically be an overnight shift as refineries would need to continue production and supply of up to 3.5% marine fuel until the day regulation requirement kicks in. Global refining will face enormous logistics, storage and delivery issues, while ships will have to clean out fuel systems to avoid Sulphur contamination. Thus, there is a risk such quick swing to lead to a period of product shortages and inflated marine oil prices. According to data reported on average up to 2017, the shipping industry was consuming approximately 3.2m barrels p/d of HFO and 800k p/d of MGO. Accordingly, from 2020 onwards it is estimated that proportion will alter to 700k p/d of HFO to 3.4m barrels p/d of MGO. Obviously, the use of compliant Sulphur oil products will be the expensive solution for ship-owners that will either absorb the cost or possibly operators will try to pass the cost to Charterers via increased freight rates.
Simple refineries that produce a substantial share of their crude oil into HFO may face margin pressures, while complex refineries with greater infrastructures may potentially boost margins with larger production of low Sulphur products. IEA has stated that if refiners ran at similar utilization rates as of today, it would be unlikely to produce the essential volumes of gas oil. Particularly, if quantity rises to meet the required gas oil volumes, margins would be inevitably affected by shrinking profits.
Overall, oil majors and refineries will try to back up the bunker fuel demand ascending from the new regulation through several ways. Refiners may elevate ULSFO production by extracting low Sulphur fuel streams that are currently blended into LSFO or HSFO will be made available to the market as ULS FO. ExxonMobil, for example has introduced a product, Heavy Distillate Marine ECA 50 that can be consumed onboard like HFO and has only 0.1% Sulphur content. Furthermore, refiners have an issue of handling their surplus residue as this option comes with higher risk on returns of investment. This is due to the fact that oil demand is founded on shippers’ uptake of alternative options such as scrubber installation and LNG bunkering. Refiners can raise LNG bunker supplies in major bunkering hubs. In Singapore, Shell and ExxonMobil are working with Maritime and Port Authority of Singapore to supply LNG as fuel.
To sum up, in the scenario that refineries restrict the availability of HFO on expected higher margins from selling MGO, then vessels fitted with scrubbers might face challenges in relation to adequate supply of HFO. On the other hand, refineries worry that any surge in the use of MGO would head to excess quantity of HFO. For sure refineries are not rushing to big investments to change production set ups while ship-owners are still considering their options. It’s a dilemma for all parties and a puzzle to be solved.
By Katerina Restis
Tanker Chartering
Compiled by:
Intermodal Research & Valuations
Analysts:
Ms Eva Tzima
George Panagopoulos
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, 06 February 19
FEBRUARY 2019 INDONESIA'S COAL REFERENCE PRICE FELL 8.83 PERCENT YOY
COALspot.com: The Ministry of Energy and Mineral Resources of the Republic of Indonesia has revised down again the benchmark price of Indonesian th ...
Wednesday, 06 February 19
THE BDI HAS EASED BACK TO 645 BP, ITS LOWEST LEVEL SINCE AUGUST 2016 - ALLIED
The dry bulk sector is in the doldrums, with most market participants seemingly left utterly perplexed, and simultaneously, in pursuit of any posit ...
Monday, 04 February 19
COAL STILL IN HIGH DEMAND GLOBALLY
Although the world is switching to renewable energy there is still a big demand for coal around the globe.
This is according to Cany ...
Friday, 01 February 19
ULTRAMAX WAS FIXED DELIVERY KALIMANTAN, FOR TRIP TO WEST COAST INDIA AT $7,000 - BALTIC BRIEFING
Capesize
The Vale dam tragedy sparked a sharp fall in rates across all regions even where tonnage remained tight. The potential loss of product ...
Friday, 01 February 19
SEMBCORP SELECTS NORDEN FOR LONG-TERM INDIAN CONTRACT
NORDEN A/S has signed a 10-year Panamax Contract of Affreightment (COA) with Indian utility firm Sembcorp Energy India Ltd.
From 1 A ...
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- Vedanta Resources Plc - India
- Tamil Nadu electricity Board
- Kohat Cement Company Ltd. - Pakistan
- The University of Queensland
- Bukit Asam (Persero) Tbk - Indonesia
- Australian Commodity Traders Exchange
- Kaltim Prima Coal - Indonesia
- Georgia Ports Authority, United States
- Jaiprakash Power Ventures ltd
- Central Java Power - Indonesia
- New Zealand Coal & Carbon
- GVK Power & Infra Limited - India
- San Jose City I Power Corp, Philippines
- Wood Mackenzie - Singapore
- Krishnapatnam Port Company Ltd. - India
- The Treasury - Australian Government
- Vizag Seaport Private Limited - India
- Deloitte Consulting - India
- Parliament of New Zealand
- Globalindo Alam Lestari - Indonesia
- Port Waratah Coal Services - Australia
- Sinarmas Energy and Mining - Indonesia
- Posco Energy - South Korea
- Karaikal Port Pvt Ltd - India
- Binh Thuan Hamico - Vietnam
- VISA Power Limited - India
- Directorate Of Revenue Intelligence - India
- Sarangani Energy Corporation, Philippines
- European Bulk Services B.V. - Netherlands
- Dalmia Cement Bharat India
- Interocean Group of Companies - India
- Independent Power Producers Association of India
- Riau Bara Harum - Indonesia
- Chamber of Mines of South Africa
- SMG Consultants - Indonesia
- Vijayanagar Sugar Pvt Ltd - India
- Bukit Baiduri Energy - Indonesia
- Alfred C Toepfer International GmbH - Germany
- Formosa Plastics Group - Taiwan
- Cement Manufacturers Association - India
- Makarim & Taira - Indonesia
- Maheswari Brothers Coal Limited - India
- Bharathi Cement Corporation - India
- Global Green Power PLC Corporation, Philippines
- GAC Shipping (India) Pvt Ltd
- Karbindo Abesyapradhi - Indoneisa
- Chettinad Cement Corporation Ltd - India
- Heidelberg Cement - Germany
- IEA Clean Coal Centre - UK
- Xindia Steels Limited - India
- Sical Logistics Limited - India
- International Coal Ventures Pvt Ltd - India
- Kalimantan Lumbung Energi - Indonesia
- Attock Cement Pakistan Limited
- Medco Energi Mining Internasional
- Tata Chemicals Ltd - India
- Offshore Bulk Terminal Pte Ltd, Singapore
- Siam City Cement - Thailand
- Timah Investasi Mineral - Indoneisa
- Ceylon Electricity Board - Sri Lanka
- Planning Commission, India
- Pipit Mutiara Jaya. PT, Indonesia
- Lanco Infratech Ltd - India
- Barasentosa Lestari - Indonesia
- Iligan Light & Power Inc, Philippines
- The State Trading Corporation of India Ltd
- Parry Sugars Refinery, India
- Essar Steel Hazira Ltd - India
- Global Coal Blending Company Limited - Australia
- Salva Resources Pvt Ltd - India
- PowerSource Philippines DevCo
- Economic Council, Georgia
- Aditya Birla Group - India
- PetroVietnam Power Coal Import and Supply Company
- Global Business Power Corporation, Philippines
- Renaissance Capital - South Africa
- Edison Trading Spa - Italy
- Bhoruka Overseas - Indonesia
- TNB Fuel Sdn Bhd - Malaysia
- Toyota Tsusho Corporation, Japan
- Malabar Cements Ltd - India
- Simpson Spence & Young - Indonesia
- Jindal Steel & Power Ltd - India
- Asmin Koalindo Tuhup - Indonesia
- Semirara Mining and Power Corporation, Philippines
- Aboitiz Power Corporation - Philippines
- Petrochimia International Co. Ltd.- Taiwan
- Billiton Holdings Pty Ltd - Australia
- Kideco Jaya Agung - Indonesia
- Bahari Cakrawala Sebuku - Indonesia
- Grasim Industreis Ltd - India
- Semirara Mining Corp, Philippines
- Marubeni Corporation - India
- Goldman Sachs - Singapore
- McConnell Dowell - Australia
- Eastern Energy - Thailand
- Anglo American - United Kingdom
- Carbofer General Trading SA - India
- Petron Corporation, Philippines
- Oldendorff Carriers - Singapore
- Maharashtra Electricity Regulatory Commission - India
- Star Paper Mills Limited - India
- Kapuas Tunggal Persada - Indonesia
- Sindya Power Generating Company Private Ltd
- Indo Tambangraya Megah - Indonesia
- Indika Energy - Indonesia
- Metalloyd Limited - United Kingdom
- Romanian Commodities Exchange
- Indogreen Group - Indonesia
- Mercator Lines Limited - India
- GN Power Mariveles Coal Plant, Philippines
- Straits Asia Resources Limited - Singapore
- AsiaOL BioFuels Corp., Philippines
- Meenaskhi Energy Private Limited - India
- Indian Energy Exchange, India
- Miang Besar Coal Terminal - Indonesia
- Larsen & Toubro Limited - India
- Baramulti Group, Indonesia
- Samtan Co., Ltd - South Korea
- Ind-Barath Power Infra Limited - India
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Gujarat Electricity Regulatory Commission - India
- CIMB Investment Bank - Malaysia
- Ministry of Finance - Indonesia
- Bukit Makmur.PT - Indonesia
- Rashtriya Ispat Nigam Limited - India
- Thai Mozambique Logistica
- Intertek Mineral Services - Indonesia
- ICICI Bank Limited - India
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- South Luzon Thermal Energy Corporation
- Gujarat Sidhee Cement - India
- Latin American Coal - Colombia
- Holcim Trading Pte Ltd - Singapore
- Africa Commodities Group - South Africa
- SMC Global Power, Philippines
- Sakthi Sugars Limited - India
- Central Electricity Authority - India
- Commonwealth Bank - Australia
- Jorong Barutama Greston.PT - Indonesia
- Mercuria Energy - Indonesia
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Therma Luzon, Inc, Philippines
- Power Finance Corporation Ltd., India
- Cigading International Bulk Terminal - Indonesia
- Thiess Contractors Indonesia
- Ministry of Mines - Canada
- Electricity Generating Authority of Thailand
- LBH Netherlands Bv - Netherlands
- Wilmar Investment Holdings
- Price Waterhouse Coopers - Russia
- White Energy Company Limited
- Directorate General of MIneral and Coal - Indonesia
- Indian Oil Corporation Limited
- Merrill Lynch Commodities Europe
- Pendopo Energi Batubara - Indonesia
- Sojitz Corporation - Japan
- India Bulls Power Limited - India
- Ambuja Cements Ltd - India
- Kartika Selabumi Mining - Indonesia
- London Commodity Brokers - England
- Altura Mining Limited, Indonesia
- Rio Tinto Coal - Australia
- Bayan Resources Tbk. - Indonesia
- Coalindo Energy - Indonesia
- Sree Jayajothi Cements Limited - India
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Coal and Oil Company - UAE
- Kumho Petrochemical, South Korea
- Leighton Contractors Pty Ltd - Australia
- Bhushan Steel Limited - India
- Ministry of Transport, Egypt
- Uttam Galva Steels Limited - India
- CNBM International Corporation - China
- Orica Australia Pty. Ltd.
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Gujarat Mineral Development Corp Ltd - India
- GMR Energy Limited - India
- Mintek Dendrill Indonesia
- Singapore Mercantile Exchange
- Indonesian Coal Mining Association
- ASAPP Information Group - India
- Bulk Trading Sa - Switzerland
- Kepco SPC Power Corporation, Philippines
- Electricity Authority, New Zealand
- Trasteel International SA, Italy
- Kobexindo Tractors - Indoneisa
- Borneo Indobara - Indonesia
- Videocon Industries ltd - India
- Meralco Power Generation, Philippines
- Mjunction Services Limited - India
- Neyveli Lignite Corporation Ltd, - India
- Bank of Tokyo Mitsubishi UFJ Ltd
- Minerals Council of Australia
- Orica Mining Services - Indonesia
- SN Aboitiz Power Inc, Philippines
- Agrawal Coal Company - India
- Energy Development Corp, Philippines
- Siam City Cement PLC, Thailand
- Banpu Public Company Limited - Thailand
- Standard Chartered Bank - UAE
- Eastern Coal Council - USA
- Coastal Gujarat Power Limited - India
- Antam Resourcindo - Indonesia
- MS Steel International - UAE
- Manunggal Multi Energi - Indonesia
- IHS Mccloskey Coal Group - USA
- PNOC Exploration Corporation - Philippines
- TeaM Sual Corporation - Philippines
- PTC India Limited - India
- Bangladesh Power Developement Board
- Energy Link Ltd, New Zealand
- Savvy Resources Ltd - HongKong
- Australian Coal Association
- Bhatia International Limited - India
- Madhucon Powers Ltd - India
- OPG Power Generation Pvt Ltd - India
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