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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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Sunday, 20 January 19
OIL MARKET REPORT: A MARATHON, NOT A SPRINT - IEA
Last month, we asked if there was a floor under prices following the signing of a new Vienna Agreement that aims to re-balance the oil market. Foll ...
Thursday, 17 January 19
EIA ESTIMATES THAT U.S. COAL EXPORTS WERE 116 MMST IN 2018, 20% HIGHER THAN THE AMOUNT EXPORTED IN 2017
Coal Supply
EIA estimates that coal production declined by 20 million short tons (MMst) (3%) in 2018, despite a 19 MMst increase in U.S. coal e ...
Thursday, 17 January 19
U.S COAL OUTPUT IS EXPECTED TO FALL BY 3 PER CENT IN 2019 - EIA
EIA forecasts that U.S. coal production will total 729 million short tons (MMst) in 2019, down by 25 MMst (3%) from 2018.
Acco ...
Wednesday, 16 January 19
SHIPPING MARKET INSIGHT - INTERMODAL
As we go through the first days of the year and just a few weeks before the Chinese New Year, the ship repair sector is witnessing a big difference ...
Monday, 14 January 19
KOREA SOUTHERN POWER INVITES BIDS FOR 320,000 MT OF MIN 3,800 NCV 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 coal for ...
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- Gujarat Sidhee Cement - India
- Power Finance Corporation Ltd., India
- Eastern Energy - Thailand
- Rashtriya Ispat Nigam Limited - India
- Medco Energi Mining Internasional
- The Treasury - Australian Government
- Marubeni Corporation - India
- Indian Oil Corporation Limited
- Orica Australia Pty. Ltd.
- San Jose City I Power Corp, Philippines
- Posco Energy - South Korea
- Kideco Jaya Agung - Indonesia
- PetroVietnam Power Coal Import and Supply Company
- Binh Thuan Hamico - Vietnam
- Petron Corporation, Philippines
- Bangladesh Power Developement Board
- Carbofer General Trading SA - India
- Videocon Industries ltd - India
- Australian Commodity Traders Exchange
- Jaiprakash Power Ventures ltd
- Global Business Power Corporation, Philippines
- Kohat Cement Company Ltd. - Pakistan
- Energy Development Corp, Philippines
- Global Coal Blending Company Limited - Australia
- Madhucon Powers Ltd - India
- SMC Global Power, Philippines
- India Bulls Power Limited - India
- Banpu Public Company Limited - Thailand
- Miang Besar Coal Terminal - Indonesia
- New Zealand Coal & Carbon
- Karbindo Abesyapradhi - Indoneisa
- Cement Manufacturers Association - India
- Siam City Cement - Thailand
- Ind-Barath Power Infra Limited - India
- Aboitiz Power Corporation - Philippines
- Globalindo Alam Lestari - Indonesia
- Larsen & Toubro Limited - India
- Jindal Steel & Power Ltd - India
- Energy Link Ltd, New Zealand
- Electricity Authority, New Zealand
- Bank of Tokyo Mitsubishi UFJ Ltd
- OPG Power Generation Pvt Ltd - India
- Mercuria Energy - Indonesia
- GVK Power & Infra Limited - India
- AsiaOL BioFuels Corp., Philippines
- Samtan Co., Ltd - South Korea
- Formosa Plastics Group - Taiwan
- Minerals Council of Australia
- Baramulti Group, Indonesia
- Sarangani Energy Corporation, Philippines
- GN Power Mariveles Coal Plant, Philippines
- Coalindo Energy - Indonesia
- Alfred C Toepfer International GmbH - Germany
- Singapore Mercantile Exchange
- Mjunction Services Limited - India
- The State Trading Corporation of India Ltd
- Wilmar Investment Holdings
- Meenaskhi Energy Private Limited - India
- Kobexindo Tractors - Indoneisa
- White Energy Company Limited
- Coal and Oil Company - UAE
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Bharathi Cement Corporation - India
- Kepco SPC Power Corporation, Philippines
- Therma Luzon, Inc, Philippines
- Neyveli Lignite Corporation Ltd, - India
- Ministry of Finance - Indonesia
- Salva Resources Pvt Ltd - India
- Jorong Barutama Greston.PT - Indonesia
- Kapuas Tunggal Persada - Indonesia
- Interocean Group of Companies - India
- Australian Coal Association
- Indogreen Group - Indonesia
- Ambuja Cements Ltd - India
- London Commodity Brokers - England
- Semirara Mining and Power Corporation, Philippines
- Simpson Spence & Young - Indonesia
- Georgia Ports Authority, United States
- Pendopo Energi Batubara - Indonesia
- Xindia Steels Limited - India
- Kartika Selabumi Mining - Indonesia
- Pipit Mutiara Jaya. PT, Indonesia
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Manunggal Multi Energi - Indonesia
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Sical Logistics Limited - India
- MS Steel International - UAE
- Bukit Asam (Persero) Tbk - Indonesia
- Tamil Nadu electricity Board
- Makarim & Taira - Indonesia
- Parry Sugars Refinery, India
- Global Green Power PLC Corporation, Philippines
- Billiton Holdings Pty Ltd - Australia
- Sinarmas Energy and Mining - Indonesia
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Ceylon Electricity Board - Sri Lanka
- VISA Power Limited - India
- Vijayanagar Sugar Pvt Ltd - India
- South Luzon Thermal Energy Corporation
- Vedanta Resources Plc - India
- Directorate Of Revenue Intelligence - India
- Eastern Coal Council - USA
- Africa Commodities Group - South Africa
- Goldman Sachs - Singapore
- Anglo American - United Kingdom
- Bukit Makmur.PT - Indonesia
- Toyota Tsusho Corporation, Japan
- GMR Energy Limited - India
- Leighton Contractors Pty Ltd - Australia
- Electricity Generating Authority of Thailand
- Sojitz Corporation - Japan
- TeaM Sual Corporation - Philippines
- SMG Consultants - Indonesia
- Indonesian Coal Mining Association
- Port Waratah Coal Services - Australia
- Central Electricity Authority - India
- Rio Tinto Coal - Australia
- Bayan Resources Tbk. - Indonesia
- Agrawal Coal Company - India
- Aditya Birla Group - India
- Antam Resourcindo - Indonesia
- Commonwealth Bank - Australia
- Metalloyd Limited - United Kingdom
- Ministry of Transport, Egypt
- Malabar Cements Ltd - India
- TNB Fuel Sdn Bhd - Malaysia
- IHS Mccloskey Coal Group - USA
- Coastal Gujarat Power Limited - India
- Borneo Indobara - Indonesia
- The University of Queensland
- Bukit Baiduri Energy - Indonesia
- ICICI Bank Limited - India
- Barasentosa Lestari - Indonesia
- McConnell Dowell - Australia
- Vizag Seaport Private Limited - India
- Indika Energy - Indonesia
- Semirara Mining Corp, Philippines
- PTC India Limited - India
- Economic Council, Georgia
- SN Aboitiz Power Inc, Philippines
- Uttam Galva Steels Limited - India
- Wood Mackenzie - Singapore
- Attock Cement Pakistan Limited
- International Coal Ventures Pvt Ltd - India
- Independent Power Producers Association of India
- Mercator Lines Limited - India
- Heidelberg Cement - Germany
- Kalimantan Lumbung Energi - Indonesia
- Gujarat Mineral Development Corp Ltd - India
- Thiess Contractors Indonesia
- Asmin Koalindo Tuhup - Indonesia
- Indo Tambangraya Megah - Indonesia
- Chettinad Cement Corporation Ltd - India
- Planning Commission, India
- Bahari Cakrawala Sebuku - Indonesia
- Ministry of Mines - Canada
- Tata Chemicals Ltd - India
- Timah Investasi Mineral - Indoneisa
- Siam City Cement PLC, Thailand
- Iligan Light & Power Inc, Philippines
- Gujarat Electricity Regulatory Commission - India
- Deloitte Consulting - India
- Krishnapatnam Port Company Ltd. - India
- Maheswari Brothers Coal Limited - India
- Sree Jayajothi Cements Limited - India
- Offshore Bulk Terminal Pte Ltd, Singapore
- Parliament of New Zealand
- Holcim Trading Pte Ltd - Singapore
- Bulk Trading Sa - Switzerland
- PowerSource Philippines DevCo
- Grasim Industreis Ltd - India
- Cigading International Bulk Terminal - Indonesia
- Maharashtra Electricity Regulatory Commission - India
- IEA Clean Coal Centre - UK
- Central Java Power - Indonesia
- Directorate General of MIneral and Coal - Indonesia
- Latin American Coal - Colombia
- Karaikal Port Pvt Ltd - India
- Chamber of Mines of South Africa
- Price Waterhouse Coopers - Russia
- Petrochimia International Co. Ltd.- Taiwan
- Sakthi Sugars Limited - India
- Savvy Resources Ltd - HongKong
- Riau Bara Harum - Indonesia
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Indian Energy Exchange, India
- European Bulk Services B.V. - Netherlands
- CIMB Investment Bank - Malaysia
- Trasteel International SA, Italy
- Kaltim Prima Coal - Indonesia
- Standard Chartered Bank - UAE
- Dalmia Cement Bharat India
- PNOC Exploration Corporation - Philippines
- GAC Shipping (India) Pvt Ltd
- Edison Trading Spa - Italy
- Romanian Commodities Exchange
- Renaissance Capital - South Africa
- Thai Mozambique Logistica
- Star Paper Mills Limited - India
- Orica Mining Services - Indonesia
- Meralco Power Generation, Philippines
- Lanco Infratech Ltd - India
- Bhatia International Limited - India
- Merrill Lynch Commodities Europe
- Oldendorff Carriers - Singapore
- Intertek Mineral Services - Indonesia
- Essar Steel Hazira Ltd - India
- Bhoruka Overseas - Indonesia
- ASAPP Information Group - India
- Mintek Dendrill Indonesia
- Altura Mining Limited, Indonesia
- Kumho Petrochemical, South Korea
- Straits Asia Resources Limited - Singapore
- LBH Netherlands Bv - Netherlands
- CNBM International Corporation - China
- Sindya Power Generating Company Private Ltd
- Bhushan Steel Limited - India
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