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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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Tuesday, 22 January 19
9TH GLOBAL MANUFACTURING SUPPLY CHAIN INNOVATION SUMMIT 2019
Rethinking the supply chain in manufacturing is a must at the digital era along with the industry transforming and innovating; new manufacturing is ...
Tuesday, 22 January 19
AUSTRALIA'S YANCOAL PRODUCED 50 MMT SALEABLE COAL IN 2018 UP 59 PER CENT ON THE YEAR PRIOR, THE QUARTERLY REPORT SHOWS
According to the report, the miner's quarterly (Q4' 18) saleable coal production of 12.4 Mmt. Includes 10.5 Mmt (85 per cent) from the Comp ...
Monday, 21 January 19
KOSPO INVITING BIDS FOR 320K MT OF LOW CALORIFIC VALUE COAL
COALspot.com: South Korea state-owned utility Korea Southern Power Co. Ltd (KOSPO) issued a tender for 320,000 MT of min 3,800 kcal/kg NCV low calo ...
Monday, 21 January 19
SUPRAMAX: INDONESIAN COAL RUNS, TONNAGE WAS GIVING APS DELIVERIES AND A 57,000DWT SHIP FIXED AT $7,000 FOR A TRIP TO WEST COAST INDIA - BALTIC BRIEFING
Capesize
A positive end to a week that saw rates on the West Australia/China run slip below $6.00, as charterers faced a plentiful supply ...
Monday, 21 January 19
HARD COAL WORLD TRADE IN 2018 RISES BY 3.7 PER CENT; GLOBAL HARD COAL PRODUCTION INCREASES BY 1.7 PER CENT - VDKI
Global Hard Coal Production Increases By 1.7%.
According to provisional calculations by the German Coal Importer Association (VDKi), ...
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- Intertek Mineral Services - Indonesia
- London Commodity Brokers - England
- Essar Steel Hazira Ltd - India
- Borneo Indobara - Indonesia
- Timah Investasi Mineral - Indoneisa
- Central Java Power - Indonesia
- Cement Manufacturers Association - India
- Commonwealth Bank - Australia
- Karaikal Port Pvt Ltd - India
- Binh Thuan Hamico - Vietnam
- Kepco SPC Power Corporation, Philippines
- Mjunction Services Limited - India
- Coalindo Energy - Indonesia
- Meralco Power Generation, Philippines
- Anglo American - United Kingdom
- Heidelberg Cement - Germany
- McConnell Dowell - Australia
- Georgia Ports Authority, United States
- Directorate Of Revenue Intelligence - India
- International Coal Ventures Pvt Ltd - India
- Attock Cement Pakistan Limited
- Medco Energi Mining Internasional
- Bharathi Cement Corporation - India
- LBH Netherlands Bv - Netherlands
- Salva Resources Pvt Ltd - India
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Kideco Jaya Agung - Indonesia
- Kumho Petrochemical, South Korea
- Trasteel International SA, Italy
- Baramulti Group, Indonesia
- Coastal Gujarat Power Limited - India
- Holcim Trading Pte Ltd - Singapore
- PTC India Limited - India
- Manunggal Multi Energi - Indonesia
- Ministry of Mines - Canada
- Bukit Baiduri Energy - Indonesia
- Chamber of Mines of South Africa
- MS Steel International - UAE
- Interocean Group of Companies - India
- Uttam Galva Steels Limited - India
- Sree Jayajothi Cements Limited - India
- Romanian Commodities Exchange
- Asmin Koalindo Tuhup - Indonesia
- Petrochimia International Co. Ltd.- Taiwan
- Larsen & Toubro Limited - India
- Parry Sugars Refinery, India
- Meenaskhi Energy Private Limited - India
- Kobexindo Tractors - Indoneisa
- SMC Global Power, Philippines
- Toyota Tsusho Corporation, Japan
- Semirara Mining Corp, Philippines
- GAC Shipping (India) Pvt Ltd
- Kapuas Tunggal Persada - Indonesia
- Krishnapatnam Port Company Ltd. - India
- Ind-Barath Power Infra Limited - India
- Semirara Mining and Power Corporation, Philippines
- White Energy Company Limited
- Agrawal Coal Company - India
- Therma Luzon, Inc, Philippines
- Offshore Bulk Terminal Pte Ltd, Singapore
- Maheswari Brothers Coal Limited - India
- Barasentosa Lestari - Indonesia
- Maharashtra Electricity Regulatory Commission - India
- Neyveli Lignite Corporation Ltd, - India
- PetroVietnam Power Coal Import and Supply Company
- Tata Chemicals Ltd - India
- Standard Chartered Bank - UAE
- Petron Corporation, Philippines
- Vizag Seaport Private Limited - India
- Latin American Coal - Colombia
- Wood Mackenzie - Singapore
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Alfred C Toepfer International GmbH - Germany
- Bhatia International Limited - India
- Directorate General of MIneral and Coal - Indonesia
- Orica Australia Pty. Ltd.
- Thai Mozambique Logistica
- Global Coal Blending Company Limited - Australia
- GVK Power & Infra Limited - India
- TeaM Sual Corporation - Philippines
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Bayan Resources Tbk. - Indonesia
- Parliament of New Zealand
- Ministry of Finance - Indonesia
- Kohat Cement Company Ltd. - Pakistan
- Bhoruka Overseas - Indonesia
- Sindya Power Generating Company Private Ltd
- Pendopo Energi Batubara - Indonesia
- Miang Besar Coal Terminal - Indonesia
- Orica Mining Services - Indonesia
- Vedanta Resources Plc - India
- Kalimantan Lumbung Energi - Indonesia
- Energy Link Ltd, New Zealand
- OPG Power Generation Pvt Ltd - India
- Dalmia Cement Bharat India
- Indonesian Coal Mining Association
- The University of Queensland
- Renaissance Capital - South Africa
- Bank of Tokyo Mitsubishi UFJ Ltd
- Gujarat Sidhee Cement - India
- Sakthi Sugars Limited - India
- Grasim Industreis Ltd - India
- Aditya Birla Group - India
- Independent Power Producers Association of India
- Star Paper Mills Limited - India
- TNB Fuel Sdn Bhd - Malaysia
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Straits Asia Resources Limited - Singapore
- Eastern Energy - Thailand
- Indian Oil Corporation Limited
- Gujarat Electricity Regulatory Commission - India
- Indogreen Group - Indonesia
- IHS Mccloskey Coal Group - USA
- Indian Energy Exchange, India
- Africa Commodities Group - South Africa
- Tamil Nadu electricity Board
- Antam Resourcindo - Indonesia
- Karbindo Abesyapradhi - Indoneisa
- Posco Energy - South Korea
- Gujarat Mineral Development Corp Ltd - India
- SMG Consultants - Indonesia
- Global Green Power PLC Corporation, Philippines
- CIMB Investment Bank - Malaysia
- Kartika Selabumi Mining - Indonesia
- Chettinad Cement Corporation Ltd - India
- PowerSource Philippines DevCo
- Videocon Industries ltd - India
- Savvy Resources Ltd - HongKong
- GMR Energy Limited - India
- Ministry of Transport, Egypt
- Port Waratah Coal Services - Australia
- AsiaOL BioFuels Corp., Philippines
- VISA Power Limited - India
- New Zealand Coal & Carbon
- Formosa Plastics Group - Taiwan
- Ceylon Electricity Board - Sri Lanka
- Merrill Lynch Commodities Europe
- Bukit Asam (Persero) Tbk - Indonesia
- Mercator Lines Limited - India
- Lanco Infratech Ltd - India
- Cigading International Bulk Terminal - Indonesia
- CNBM International Corporation - China
- Australian Coal Association
- PNOC Exploration Corporation - Philippines
- Vijayanagar Sugar Pvt Ltd - India
- Coal and Oil Company - UAE
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Electricity Authority, New Zealand
- Electricity Generating Authority of Thailand
- Altura Mining Limited, Indonesia
- India Bulls Power Limited - India
- Kaltim Prima Coal - Indonesia
- Sical Logistics Limited - India
- Economic Council, Georgia
- Indika Energy - Indonesia
- Pipit Mutiara Jaya. PT, Indonesia
- Xindia Steels Limited - India
- Energy Development Corp, Philippines
- Ambuja Cements Ltd - India
- IEA Clean Coal Centre - UK
- Deloitte Consulting - India
- Samtan Co., Ltd - South Korea
- Mintek Dendrill Indonesia
- SN Aboitiz Power Inc, Philippines
- Central Electricity Authority - India
- Indo Tambangraya Megah - Indonesia
- Jaiprakash Power Ventures ltd
- San Jose City I Power Corp, Philippines
- The State Trading Corporation of India Ltd
- Power Finance Corporation Ltd., India
- Metalloyd Limited - United Kingdom
- Wilmar Investment Holdings
- Jindal Steel & Power Ltd - India
- Aboitiz Power Corporation - Philippines
- Global Business Power Corporation, Philippines
- Edison Trading Spa - Italy
- Australian Commodity Traders Exchange
- Marubeni Corporation - India
- The Treasury - Australian Government
- Iligan Light & Power Inc, Philippines
- Rashtriya Ispat Nigam Limited - India
- ICICI Bank Limited - India
- Siam City Cement - Thailand
- Riau Bara Harum - Indonesia
- Sarangani Energy Corporation, Philippines
- Leighton Contractors Pty Ltd - Australia
- Eastern Coal Council - USA
- Globalindo Alam Lestari - Indonesia
- ASAPP Information Group - India
- Thiess Contractors Indonesia
- Siam City Cement PLC, Thailand
- South Luzon Thermal Energy Corporation
- Goldman Sachs - Singapore
- Bulk Trading Sa - Switzerland
- Bahari Cakrawala Sebuku - Indonesia
- Jorong Barutama Greston.PT - Indonesia
- Mercuria Energy - Indonesia
- GN Power Mariveles Coal Plant, Philippines
- Bangladesh Power Developement Board
- Oldendorff Carriers - Singapore
- Singapore Mercantile Exchange
- Simpson Spence & Young - Indonesia
- European Bulk Services B.V. - Netherlands
- Bhushan Steel Limited - India
- Makarim & Taira - Indonesia
- Minerals Council of Australia
- Rio Tinto Coal - Australia
- Planning Commission, India
- Carbofer General Trading SA - India
- Malabar Cements Ltd - India
- Billiton Holdings Pty Ltd - Australia
- Madhucon Powers Ltd - India
- Bukit Makmur.PT - Indonesia
- Price Waterhouse Coopers - Russia
- Sinarmas Energy and Mining - Indonesia
- Banpu Public Company Limited - Thailand
- Sojitz Corporation - Japan
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