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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, 04 January 19
FOCUS IS ON BOOSTING COAL PRODUCTION: INDIAN COAL MINISTER
The current focus of the government is on boosting production from operational coal mines, according to Minister for Coal, Piyush Goyal.
...
Thursday, 03 January 19
CAPESIZE: A MORE POSITIVE START OF THE NEW YEAR THAN EXPECTED FOR THE BIG SHIPS - FEARNLEYS
Capesize
A more positive start of the new year than expected for the big ships, with average gains of US$ 500/day posted on the first tra ...
Tuesday, 01 January 19
INDONESIA: COAL PRODUCTION EXPECTED TO EXCEED THIS YEAR'S TARGET - JP
Indonesian coal production reached 456 million tons up to Thursday or 94.02 percent of this year’s total target of 485 million tons, accordin ...
Monday, 31 December 18
THE INDONESIAN COAL MARKET Q1 '19 FORECAST: LOOKS DIRECTIONLESS - TRADER
The Indonesian coal market looks directionless, an International coal trader said when we asked him to give his forecast for 1Q' 2019.
...
Monday, 31 December 18
GLOBAL COAL DEMAND GREW BY 1% IN 2017; GLOBAL COAL POWER GENERATION INCREASED BY OVER 250 TWH - IEA
After two years of decline, global coal demand grew by 1% in 2017 to 7585 Mt as stronger global economic growth increased both industrial output an ...
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- Ambuja Cements Ltd - India
- Kideco Jaya Agung - Indonesia
- Orica Australia Pty. Ltd.
- MS Steel International - UAE
- Miang Besar Coal Terminal - Indonesia
- Dalmia Cement Bharat India
- Asmin Koalindo Tuhup - Indonesia
- Vedanta Resources Plc - India
- Chettinad Cement Corporation Ltd - India
- Eastern Coal Council - USA
- Indika Energy - Indonesia
- Port Waratah Coal Services - Australia
- TNB Fuel Sdn Bhd - Malaysia
- Trasteel International SA, Italy
- Bukit Asam (Persero) Tbk - Indonesia
- Anglo American - United Kingdom
- Pendopo Energi Batubara - Indonesia
- Petron Corporation, Philippines
- Neyveli Lignite Corporation Ltd, - India
- ASAPP Information Group - India
- Ministry of Mines - Canada
- SN Aboitiz Power Inc, Philippines
- Pipit Mutiara Jaya. PT, Indonesia
- Meralco Power Generation, Philippines
- Energy Development Corp, Philippines
- CIMB Investment Bank - Malaysia
- Directorate Of Revenue Intelligence - India
- Barasentosa Lestari - Indonesia
- Independent Power Producers Association of India
- Price Waterhouse Coopers - Russia
- Bhatia International Limited - India
- Planning Commission, India
- Wilmar Investment Holdings
- Bahari Cakrawala Sebuku - Indonesia
- Maheswari Brothers Coal Limited - India
- Kartika Selabumi Mining - Indonesia
- OPG Power Generation Pvt Ltd - India
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- The Treasury - Australian Government
- Offshore Bulk Terminal Pte Ltd, Singapore
- Coalindo Energy - Indonesia
- Thai Mozambique Logistica
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Semirara Mining Corp, Philippines
- Oldendorff Carriers - Singapore
- Holcim Trading Pte Ltd - Singapore
- Global Coal Blending Company Limited - Australia
- Ministry of Transport, Egypt
- Kumho Petrochemical, South Korea
- Larsen & Toubro Limited - India
- Attock Cement Pakistan Limited
- Marubeni Corporation - India
- Bharathi Cement Corporation - India
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Malabar Cements Ltd - India
- Indogreen Group - Indonesia
- Standard Chartered Bank - UAE
- McConnell Dowell - Australia
- Binh Thuan Hamico - Vietnam
- Agrawal Coal Company - India
- Sakthi Sugars Limited - India
- CNBM International Corporation - China
- Metalloyd Limited - United Kingdom
- Gujarat Sidhee Cement - India
- Romanian Commodities Exchange
- Ministry of Finance - Indonesia
- PTC India Limited - India
- Sindya Power Generating Company Private Ltd
- The State Trading Corporation of India Ltd
- Straits Asia Resources Limited - Singapore
- Cement Manufacturers Association - India
- Billiton Holdings Pty Ltd - Australia
- Samtan Co., Ltd - South Korea
- Bukit Baiduri Energy - Indonesia
- Xindia Steels Limited - India
- Therma Luzon, Inc, Philippines
- Tamil Nadu electricity Board
- Parliament of New Zealand
- Iligan Light & Power Inc, Philippines
- Siam City Cement PLC, Thailand
- Salva Resources Pvt Ltd - India
- AsiaOL BioFuels Corp., Philippines
- PNOC Exploration Corporation - Philippines
- Karbindo Abesyapradhi - Indoneisa
- Bayan Resources Tbk. - Indonesia
- SMG Consultants - Indonesia
- Kobexindo Tractors - Indoneisa
- Ind-Barath Power Infra Limited - India
- Mintek Dendrill Indonesia
- Indo Tambangraya Megah - Indonesia
- Directorate General of MIneral and Coal - Indonesia
- Deloitte Consulting - India
- Bukit Makmur.PT - Indonesia
- South Luzon Thermal Energy Corporation
- Renaissance Capital - South Africa
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Sinarmas Energy and Mining - Indonesia
- Riau Bara Harum - Indonesia
- Uttam Galva Steels Limited - India
- Sojitz Corporation - Japan
- Simpson Spence & Young - Indonesia
- Mjunction Services Limited - India
- Krishnapatnam Port Company Ltd. - India
- Central Java Power - Indonesia
- Mercator Lines Limited - India
- Antam Resourcindo - Indonesia
- Bulk Trading Sa - Switzerland
- Toyota Tsusho Corporation, Japan
- European Bulk Services B.V. - Netherlands
- The University of Queensland
- Sarangani Energy Corporation, Philippines
- Vizag Seaport Private Limited - India
- Madhucon Powers Ltd - India
- Medco Energi Mining Internasional
- TeaM Sual Corporation - Philippines
- VISA Power Limited - India
- PetroVietnam Power Coal Import and Supply Company
- White Energy Company Limited
- Commonwealth Bank - Australia
- Carbofer General Trading SA - India
- Tata Chemicals Ltd - India
- Kepco SPC Power Corporation, Philippines
- Goldman Sachs - Singapore
- Maharashtra Electricity Regulatory Commission - India
- Indian Energy Exchange, India
- Intertek Mineral Services - Indonesia
- Minerals Council of Australia
- Electricity Generating Authority of Thailand
- Bhushan Steel Limited - India
- New Zealand Coal & Carbon
- Alfred C Toepfer International GmbH - Germany
- Borneo Indobara - Indonesia
- GN Power Mariveles Coal Plant, Philippines
- GAC Shipping (India) Pvt Ltd
- Electricity Authority, New Zealand
- Kaltim Prima Coal - Indonesia
- International Coal Ventures Pvt Ltd - India
- Kohat Cement Company Ltd. - Pakistan
- Cigading International Bulk Terminal - Indonesia
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Indonesian Coal Mining Association
- Semirara Mining and Power Corporation, Philippines
- Banpu Public Company Limited - Thailand
- Economic Council, Georgia
- Sical Logistics Limited - India
- IEA Clean Coal Centre - UK
- Jorong Barutama Greston.PT - Indonesia
- Heidelberg Cement - Germany
- Lanco Infratech Ltd - India
- Australian Coal Association
- Aboitiz Power Corporation - Philippines
- Manunggal Multi Energi - Indonesia
- IHS Mccloskey Coal Group - USA
- Sree Jayajothi Cements Limited - India
- Grasim Industreis Ltd - India
- Videocon Industries ltd - India
- Power Finance Corporation Ltd., India
- Georgia Ports Authority, United States
- ICICI Bank Limited - India
- Formosa Plastics Group - Taiwan
- Edison Trading Spa - Italy
- San Jose City I Power Corp, Philippines
- Globalindo Alam Lestari - Indonesia
- Kapuas Tunggal Persada - Indonesia
- Jindal Steel & Power Ltd - India
- Rashtriya Ispat Nigam Limited - India
- Vijayanagar Sugar Pvt Ltd - India
- Wood Mackenzie - Singapore
- Meenaskhi Energy Private Limited - India
- Global Business Power Corporation, Philippines
- Savvy Resources Ltd - HongKong
- Bank of Tokyo Mitsubishi UFJ Ltd
- Eastern Energy - Thailand
- Bhoruka Overseas - Indonesia
- Timah Investasi Mineral - Indoneisa
- Kalimantan Lumbung Energi - Indonesia
- Global Green Power PLC Corporation, Philippines
- Africa Commodities Group - South Africa
- Singapore Mercantile Exchange
- Gujarat Electricity Regulatory Commission - India
- Baramulti Group, Indonesia
- Star Paper Mills Limited - India
- India Bulls Power Limited - India
- SMC Global Power, Philippines
- Coastal Gujarat Power Limited - India
- Interocean Group of Companies - India
- Jaiprakash Power Ventures ltd
- London Commodity Brokers - England
- Ceylon Electricity Board - Sri Lanka
- Bangladesh Power Developement Board
- Coal and Oil Company - UAE
- Aditya Birla Group - India
- GVK Power & Infra Limited - India
- Mercuria Energy - Indonesia
- Gujarat Mineral Development Corp Ltd - India
- Chamber of Mines of South Africa
- LBH Netherlands Bv - Netherlands
- Makarim & Taira - Indonesia
- Leighton Contractors Pty Ltd - Australia
- Posco Energy - South Korea
- Karaikal Port Pvt Ltd - India
- Latin American Coal - Colombia
- PowerSource Philippines DevCo
- Petrochimia International Co. Ltd.- Taiwan
- Indian Oil Corporation Limited
- Merrill Lynch Commodities Europe
- Australian Commodity Traders Exchange
- Thiess Contractors Indonesia
- Rio Tinto Coal - Australia
- Orica Mining Services - Indonesia
- Energy Link Ltd, New Zealand
- Essar Steel Hazira Ltd - India
- Parry Sugars Refinery, India
- Siam City Cement - Thailand
- Altura Mining Limited, Indonesia
- GMR Energy Limited - India
- Central Electricity Authority - India
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