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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, 11 December 18
SHIPPING MARKET ANALYSIS - ALLIED
A lot of discussions have been made as to the effects of the IMO 2020 regulation on OPEX levels, investment feasibility of& ...
Tuesday, 11 December 18
PORT OF NEWCASTLE SHIPPED 10.849 MMT OF COAL IN NOVEMBER DOWN 23.44 PERCENT MOM
COALspot.com: The Port of Newcastle, Australia’s major trading port and the world’s largest coal export port has shipped A$ 1,574.8 mil ...
Thursday, 06 December 18
IN THE EAST, BIGGER SUPRA WAS FIXED CA US$ 10K FOR INDO-CHINA COAL ROUND - FEARNLEYS
Capesize
There is cautious optimism for the Capes, with healthier volumes and improving rates in the Pacific. West Australia round is gradually ...
Thursday, 06 December 18
U.S. COAL CONSUMPTION IN 2018 EXPECTED TO BE THE LOWEST IN 39 YEARS - EIA
EIA expects total U.S. coal consumption in 2018 to fall to 691 million short tons (MMst), a 4% decline from 2017 and the lowest level since 1979. U ...
Thursday, 06 December 18
DEMAND RISKS WEIGH ON GLOBAL SHIPPING SECTOR OUTLOOK - FITCH RATINGS
The global shipping sector outlook remains negative reflecting the demand-side risks of protectionism and slower economic growth, Fitch Ratings say ...
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- Kideco Jaya Agung - Indonesia
- Miang Besar Coal Terminal - Indonesia
- Tata Chemicals Ltd - India
- Bharathi Cement Corporation - India
- Indogreen Group - Indonesia
- Siam City Cement PLC, Thailand
- Interocean Group of Companies - India
- Global Green Power PLC Corporation, Philippines
- Barasentosa Lestari - Indonesia
- TNB Fuel Sdn Bhd - Malaysia
- Mintek Dendrill Indonesia
- Leighton Contractors Pty Ltd - Australia
- Straits Asia Resources Limited - Singapore
- OPG Power Generation Pvt Ltd - India
- Kepco SPC Power Corporation, Philippines
- Asmin Koalindo Tuhup - Indonesia
- Bhushan Steel Limited - India
- Antam Resourcindo - Indonesia
- Savvy Resources Ltd - HongKong
- Sindya Power Generating Company Private Ltd
- GAC Shipping (India) Pvt Ltd
- Thiess Contractors Indonesia
- Merrill Lynch Commodities Europe
- Holcim Trading Pte Ltd - Singapore
- Offshore Bulk Terminal Pte Ltd, Singapore
- The Treasury - Australian Government
- Electricity Authority, New Zealand
- Billiton Holdings Pty Ltd - Australia
- Semirara Mining Corp, Philippines
- Rio Tinto Coal - Australia
- Meralco Power Generation, Philippines
- Borneo Indobara - Indonesia
- VISA Power Limited - India
- IHS Mccloskey Coal Group - USA
- Toyota Tsusho Corporation, Japan
- Ceylon Electricity Board - Sri Lanka
- ASAPP Information Group - India
- Bahari Cakrawala Sebuku - Indonesia
- Orica Mining Services - Indonesia
- European Bulk Services B.V. - Netherlands
- Bayan Resources Tbk. - Indonesia
- ICICI Bank Limited - India
- Videocon Industries ltd - India
- Sree Jayajothi Cements Limited - India
- Sarangani Energy Corporation, Philippines
- Anglo American - United Kingdom
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- CNBM International Corporation - China
- Pipit Mutiara Jaya. PT, Indonesia
- Manunggal Multi Energi - Indonesia
- Energy Development Corp, Philippines
- Aditya Birla Group - India
- Thai Mozambique Logistica
- Australian Coal Association
- Africa Commodities Group - South Africa
- TeaM Sual Corporation - Philippines
- Commonwealth Bank - Australia
- PowerSource Philippines DevCo
- Grasim Industreis Ltd - India
- Bhatia International Limited - India
- Samtan Co., Ltd - South Korea
- Vizag Seaport Private Limited - India
- Bukit Baiduri Energy - Indonesia
- CIMB Investment Bank - Malaysia
- Wilmar Investment Holdings
- Trasteel International SA, Italy
- Directorate General of MIneral and Coal - Indonesia
- MS Steel International - UAE
- McConnell Dowell - Australia
- Banpu Public Company Limited - Thailand
- Minerals Council of Australia
- Petrochimia International Co. Ltd.- Taiwan
- Salva Resources Pvt Ltd - India
- Power Finance Corporation Ltd., India
- GVK Power & Infra Limited - India
- Aboitiz Power Corporation - Philippines
- GN Power Mariveles Coal Plant, Philippines
- Siam City Cement - Thailand
- Karbindo Abesyapradhi - Indoneisa
- Chamber of Mines of South Africa
- Edison Trading Spa - Italy
- Binh Thuan Hamico - Vietnam
- The University of Queensland
- Pendopo Energi Batubara - Indonesia
- Bhoruka Overseas - Indonesia
- IEA Clean Coal Centre - UK
- SN Aboitiz Power Inc, Philippines
- Maheswari Brothers Coal Limited - India
- Central Electricity Authority - India
- PetroVietnam Power Coal Import and Supply Company
- Makarim & Taira - Indonesia
- Riau Bara Harum - Indonesia
- Kaltim Prima Coal - Indonesia
- Larsen & Toubro Limited - India
- Semirara Mining and Power Corporation, Philippines
- Attock Cement Pakistan Limited
- Indika Energy - Indonesia
- Indonesian Coal Mining Association
- Maharashtra Electricity Regulatory Commission - India
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Eastern Coal Council - USA
- Kohat Cement Company Ltd. - Pakistan
- Bukit Makmur.PT - Indonesia
- Coalindo Energy - Indonesia
- Carbofer General Trading SA - India
- SMC Global Power, Philippines
- Petron Corporation, Philippines
- Indian Oil Corporation Limited
- Bank of Tokyo Mitsubishi UFJ Ltd
- Bulk Trading Sa - Switzerland
- Wood Mackenzie - Singapore
- Ministry of Finance - Indonesia
- International Coal Ventures Pvt Ltd - India
- Economic Council, Georgia
- SMG Consultants - Indonesia
- San Jose City I Power Corp, Philippines
- Vijayanagar Sugar Pvt Ltd - India
- Directorate Of Revenue Intelligence - India
- Therma Luzon, Inc, Philippines
- Agrawal Coal Company - India
- Meenaskhi Energy Private Limited - India
- Altura Mining Limited, Indonesia
- Goldman Sachs - Singapore
- Kapuas Tunggal Persada - Indonesia
- Deloitte Consulting - India
- Jindal Steel & Power Ltd - India
- The State Trading Corporation of India Ltd
- Romanian Commodities Exchange
- Kumho Petrochemical, South Korea
- Port Waratah Coal Services - Australia
- Karaikal Port Pvt Ltd - India
- Renaissance Capital - South Africa
- Cement Manufacturers Association - India
- Rashtriya Ispat Nigam Limited - India
- Indo Tambangraya Megah - Indonesia
- AsiaOL BioFuels Corp., Philippines
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Parliament of New Zealand
- Kobexindo Tractors - Indoneisa
- White Energy Company Limited
- Sojitz Corporation - Japan
- Coal and Oil Company - UAE
- Sakthi Sugars Limited - India
- Independent Power Producers Association of India
- Bukit Asam (Persero) Tbk - Indonesia
- Global Coal Blending Company Limited - Australia
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- India Bulls Power Limited - India
- PNOC Exploration Corporation - Philippines
- Parry Sugars Refinery, India
- Coastal Gujarat Power Limited - India
- Singapore Mercantile Exchange
- Lanco Infratech Ltd - India
- Orica Australia Pty. Ltd.
- Eastern Energy - Thailand
- London Commodity Brokers - England
- Gujarat Mineral Development Corp Ltd - India
- Electricity Generating Authority of Thailand
- Chettinad Cement Corporation Ltd - India
- Metalloyd Limited - United Kingdom
- Ministry of Transport, Egypt
- Heidelberg Cement - Germany
- Neyveli Lignite Corporation Ltd, - India
- Intertek Mineral Services - Indonesia
- Marubeni Corporation - India
- Mercator Lines Limited - India
- South Luzon Thermal Energy Corporation
- Jaiprakash Power Ventures ltd
- Standard Chartered Bank - UAE
- Central Java Power - Indonesia
- Essar Steel Hazira Ltd - India
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Krishnapatnam Port Company Ltd. - India
- Latin American Coal - Colombia
- Sical Logistics Limited - India
- Malabar Cements Ltd - India
- Kalimantan Lumbung Energi - Indonesia
- Baramulti Group, Indonesia
- Georgia Ports Authority, United States
- Indian Energy Exchange, India
- Planning Commission, India
- Formosa Plastics Group - Taiwan
- Dalmia Cement Bharat India
- Globalindo Alam Lestari - Indonesia
- Ind-Barath Power Infra Limited - India
- LBH Netherlands Bv - Netherlands
- Bangladesh Power Developement Board
- Energy Link Ltd, New Zealand
- Uttam Galva Steels Limited - India
- GMR Energy Limited - India
- Madhucon Powers Ltd - India
- Gujarat Electricity Regulatory Commission - India
- Star Paper Mills Limited - India
- Oldendorff Carriers - Singapore
- Timah Investasi Mineral - Indoneisa
- Gujarat Sidhee Cement - India
- Mercuria Energy - Indonesia
- New Zealand Coal & Carbon
- Australian Commodity Traders Exchange
- Jorong Barutama Greston.PT - Indonesia
- Mjunction Services Limited - India
- Cigading International Bulk Terminal - Indonesia
- Ministry of Mines - Canada
- Kartika Selabumi Mining - Indonesia
- PTC India Limited - India
- Tamil Nadu electricity Board
- Price Waterhouse Coopers - Russia
- Vedanta Resources Plc - India
- Xindia Steels Limited - India
- Iligan Light & Power Inc, Philippines
- Global Business Power Corporation, Philippines
- Posco Energy - South Korea
- Sinarmas Energy and Mining - Indonesia
- Ambuja Cements Ltd - India
- Alfred C Toepfer International GmbH - Germany
- Medco Energi Mining Internasional
- Simpson Spence & Young - Indonesia
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