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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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Friday, 11 January 19
SUPRAMAX: THE ASIAN ARENA HAD A MIXED START; LIMITED ACTION IN SOUTHEAST ASIA - THE BALTIC BRIEFING
Capesize
Dashed hopes summed up the first full week of the New Year. A slow start followed by a busy 24 hours of improving rates and a firming ...
Thursday, 10 January 19
BUNKER DELIVERY NOTE AMENDMENTS ENTER INTO FORCE AS SULPHUR 2020 REQUIREMENT LOOMS - IMO
KNOWLEDGE TO ELEVATE
Amendments to the bunker delivery note relating to the supply of marine fuel oil to ships which have fitted alternative m ...
Thursday, 10 January 19
WORLD TRADE IN THERMAL COAL IS ESTIMATED TO HAVE GROWN BY 1.0 PER CENT IN 2018 - DEPARTMENT OF INDUSTRY, AUSTRALIA
World Trade
World trade in thermal coal is estimated to have grown by 1.0 per cent to 1.1 billion tonnes in 2018 but it is expected to decline ...
Thursday, 10 January 19
PAKISTAN'S COAL IMPORTS TO SURGE TO 30 MILLION TONS PER ANNUM BY 2020 - CEO, PIB
Pakistan’s coal imports are estimated to surge to 30 million tons/annum from existing 20 million tons/annum by the year 2020, given the plann ...
Wednesday, 09 January 19
PANAMAX: THE PACIFIC SAW RELATIVELY GOOD DEMAND PARTICULARLY FROM INDONESIA AND NOPAC - BALTIC BRIEFING
Capesize
It was an active start to the New Year, with trading from West Australia maintaining momentum during the holiday period. Rates for Chi ...
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- Manunggal Multi Energi - Indonesia
- Miang Besar Coal Terminal - Indonesia
- IHS Mccloskey Coal Group - USA
- International Coal Ventures Pvt Ltd - India
- Kideco Jaya Agung - Indonesia
- Rio Tinto Coal - Australia
- Asmin Koalindo Tuhup - Indonesia
- Georgia Ports Authority, United States
- Madhucon Powers Ltd - India
- Vijayanagar Sugar Pvt Ltd - India
- Binh Thuan Hamico - Vietnam
- Africa Commodities Group - South Africa
- Energy Link Ltd, New Zealand
- SMG Consultants - Indonesia
- Marubeni Corporation - India
- Kohat Cement Company Ltd. - Pakistan
- SN Aboitiz Power Inc, Philippines
- White Energy Company Limited
- Siam City Cement - Thailand
- Gujarat Electricity Regulatory Commission - India
- ICICI Bank Limited - India
- Petrochimia International Co. Ltd.- Taiwan
- Malabar Cements Ltd - India
- Karaikal Port Pvt Ltd - India
- Edison Trading Spa - Italy
- Attock Cement Pakistan Limited
- Vizag Seaport Private Limited - India
- PetroVietnam Power Coal Import and Supply Company
- London Commodity Brokers - England
- Aditya Birla Group - India
- Leighton Contractors Pty Ltd - Australia
- Maheswari Brothers Coal Limited - India
- Simpson Spence & Young - Indonesia
- Meenaskhi Energy Private Limited - India
- Independent Power Producers Association of India
- Gujarat Mineral Development Corp Ltd - India
- Cement Manufacturers Association - India
- Pendopo Energi Batubara - Indonesia
- Oldendorff Carriers - Singapore
- Holcim Trading Pte Ltd - Singapore
- Iligan Light & Power Inc, Philippines
- Port Waratah Coal Services - Australia
- Cigading International Bulk Terminal - Indonesia
- Timah Investasi Mineral - Indoneisa
- Ministry of Finance - Indonesia
- Indo Tambangraya Megah - Indonesia
- Jorong Barutama Greston.PT - Indonesia
- Interocean Group of Companies - India
- Thiess Contractors Indonesia
- Star Paper Mills Limited - India
- CIMB Investment Bank - Malaysia
- GN Power Mariveles Coal Plant, Philippines
- Baramulti Group, Indonesia
- Indonesian Coal Mining Association
- Sical Logistics Limited - India
- ASAPP Information Group - India
- Formosa Plastics Group - Taiwan
- Sakthi Sugars Limited - India
- Medco Energi Mining Internasional
- New Zealand Coal & Carbon
- Banpu Public Company Limited - Thailand
- Globalindo Alam Lestari - Indonesia
- India Bulls Power Limited - India
- Ministry of Transport, Egypt
- Kapuas Tunggal Persada - Indonesia
- Maharashtra Electricity Regulatory Commission - India
- Wilmar Investment Holdings
- GVK Power & Infra Limited - India
- Bangladesh Power Developement Board
- South Luzon Thermal Energy Corporation
- San Jose City I Power Corp, Philippines
- Mercator Lines Limited - India
- IEA Clean Coal Centre - UK
- Indogreen Group - Indonesia
- Bank of Tokyo Mitsubishi UFJ Ltd
- Savvy Resources Ltd - HongKong
- Electricity Authority, New Zealand
- TNB Fuel Sdn Bhd - Malaysia
- Minerals Council of Australia
- Rashtriya Ispat Nigam Limited - India
- Power Finance Corporation Ltd., India
- Aboitiz Power Corporation - Philippines
- Uttam Galva Steels Limited - India
- PNOC Exploration Corporation - Philippines
- Offshore Bulk Terminal Pte Ltd, Singapore
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Toyota Tsusho Corporation, Japan
- Orica Mining Services - Indonesia
- Salva Resources Pvt Ltd - India
- Indika Energy - Indonesia
- Mintek Dendrill Indonesia
- Antam Resourcindo - Indonesia
- Jindal Steel & Power Ltd - India
- Straits Asia Resources Limited - Singapore
- Parry Sugars Refinery, India
- Ministry of Mines - Canada
- Asia Pacific Energy Resources Ventures Inc, Philippines
- GAC Shipping (India) Pvt Ltd
- Kumho Petrochemical, South Korea
- Riau Bara Harum - Indonesia
- Eastern Coal Council - USA
- Tamil Nadu electricity Board
- Neyveli Lignite Corporation Ltd, - India
- Global Coal Blending Company Limited - Australia
- Bhatia International Limited - India
- Eastern Energy - Thailand
- PowerSource Philippines DevCo
- Kaltim Prima Coal - Indonesia
- Goldman Sachs - Singapore
- Economic Council, Georgia
- Bahari Cakrawala Sebuku - Indonesia
- Semirara Mining Corp, Philippines
- Coastal Gujarat Power Limited - India
- Kobexindo Tractors - Indoneisa
- Planning Commission, India
- VISA Power Limited - India
- Metalloyd Limited - United Kingdom
- MS Steel International - UAE
- The University of Queensland
- Indian Energy Exchange, India
- Therma Luzon, Inc, Philippines
- Singapore Mercantile Exchange
- LBH Netherlands Bv - Netherlands
- CNBM International Corporation - China
- Kepco SPC Power Corporation, Philippines
- European Bulk Services B.V. - Netherlands
- Vedanta Resources Plc - India
- Jaiprakash Power Ventures ltd
- Coalindo Energy - Indonesia
- Bharathi Cement Corporation - India
- Borneo Indobara - Indonesia
- Intertek Mineral Services - Indonesia
- Karbindo Abesyapradhi - Indoneisa
- Semirara Mining and Power Corporation, Philippines
- The Treasury - Australian Government
- Thai Mozambique Logistica
- Gujarat Sidhee Cement - India
- The State Trading Corporation of India Ltd
- Romanian Commodities Exchange
- Lanco Infratech Ltd - India
- Billiton Holdings Pty Ltd - Australia
- AsiaOL BioFuels Corp., Philippines
- Bhoruka Overseas - Indonesia
- Sarangani Energy Corporation, Philippines
- Heidelberg Cement - Germany
- Alfred C Toepfer International GmbH - Germany
- Altura Mining Limited, Indonesia
- Electricity Generating Authority of Thailand
- Global Green Power PLC Corporation, Philippines
- TeaM Sual Corporation - Philippines
- Sinarmas Energy and Mining - Indonesia
- Grasim Industreis Ltd - India
- Xindia Steels Limited - India
- Parliament of New Zealand
- PTC India Limited - India
- Ambuja Cements Ltd - India
- Directorate General of MIneral and Coal - Indonesia
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- SMC Global Power, Philippines
- Kalimantan Lumbung Energi - Indonesia
- Tata Chemicals Ltd - India
- Merrill Lynch Commodities Europe
- Agrawal Coal Company - India
- Central Java Power - Indonesia
- Australian Commodity Traders Exchange
- Siam City Cement PLC, Thailand
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Global Business Power Corporation, Philippines
- Sojitz Corporation - Japan
- Petron Corporation, Philippines
- Renaissance Capital - South Africa
- Ceylon Electricity Board - Sri Lanka
- Energy Development Corp, Philippines
- Deloitte Consulting - India
- Meralco Power Generation, Philippines
- Central Electricity Authority - India
- Bukit Makmur.PT - Indonesia
- Mjunction Services Limited - India
- Ind-Barath Power Infra Limited - India
- Bukit Asam (Persero) Tbk - Indonesia
- Trasteel International SA, Italy
- Indian Oil Corporation Limited
- Videocon Industries ltd - India
- Orica Australia Pty. Ltd.
- Essar Steel Hazira Ltd - India
- Price Waterhouse Coopers - Russia
- Pipit Mutiara Jaya. PT, Indonesia
- Anglo American - United Kingdom
- OPG Power Generation Pvt Ltd - India
- Samtan Co., Ltd - South Korea
- McConnell Dowell - Australia
- Kartika Selabumi Mining - Indonesia
- Bukit Baiduri Energy - Indonesia
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Australian Coal Association
- Directorate Of Revenue Intelligence - India
- GMR Energy Limited - India
- Latin American Coal - Colombia
- Larsen & Toubro Limited - India
- Bulk Trading Sa - Switzerland
- Makarim & Taira - Indonesia
- Commonwealth Bank - Australia
- Standard Chartered Bank - UAE
- Dalmia Cement Bharat India
- Posco Energy - South Korea
- Chamber of Mines of South Africa
- Wood Mackenzie - Singapore
- Bhushan Steel Limited - India
- Chettinad Cement Corporation Ltd - India
- Bayan Resources Tbk. - Indonesia
- Carbofer General Trading SA - India
- Krishnapatnam Port Company Ltd. - India
- Sree Jayajothi Cements Limited - India
- Coal and Oil Company - UAE
- Sindya Power Generating Company Private Ltd
- Barasentosa Lestari - Indonesia
- Mercuria Energy - Indonesia
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