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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, 02 December 18
TRADE WAR LEADING TO HEADWINDS FOR THE FRAGILE DRY BULK RECOVERY - PETER SAND, BIMCO
The first twelve weeks of the 2018/19 marketing year, which started on 1 September 2018, have painted a dire picture for US soya bean exports which ...
Friday, 30 November 18
GOVT MULLS REQUIRING MINERS TO TURN COAL INTO GAS - THE JAKARTA POST
The government is considering requiring all coal miners to turn the raw commodity into dimethylether (DME) as a substitute for liquefied petroleum ...
Friday, 30 November 18
SUPRAMAX: N. CHINA TO INDIA OR SE ASIA SUPRAS ARE GETTING PAID AROUND US$ 6000 - FEARNLEYS
Capesize
Sharp rise in spot activity and income, admittedly from very low levels, for the big ships. West Australia/China and Brazil/Far East b ...
Thursday, 29 November 18
NEW IMSBC CODE REQUIREMENTS AIM TO CONTROL LIQUEFACTION OF COAL CARGOES - GARD
KNOWLEDGE TO ELEVATE
The International Maritime Solid Bulk Cargoes (IMSBC) Code describes coal as a natural, solid, combustible material consi ...
Wednesday, 28 November 18
SHIPPING MARKET INSIGHT - GEORGE LAIOS
Last week I had the privilege to attend the SingularityU Greece Summit, in Athens. It was a privilege because you do not often have the chance to s ...
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- Bharathi Cement Corporation - India
- McConnell Dowell - Australia
- Binh Thuan Hamico - Vietnam
- Sindya Power Generating Company Private Ltd
- Attock Cement Pakistan Limited
- Miang Besar Coal Terminal - Indonesia
- Essar Steel Hazira Ltd - India
- Goldman Sachs - Singapore
- TeaM Sual Corporation - Philippines
- Siam City Cement - Thailand
- Gujarat Electricity Regulatory Commission - India
- Star Paper Mills Limited - India
- Orica Mining Services - Indonesia
- Dalmia Cement Bharat India
- AsiaOL BioFuels Corp., Philippines
- Posco Energy - South Korea
- Straits Asia Resources Limited - Singapore
- Ind-Barath Power Infra Limited - India
- CNBM International Corporation - China
- IHS Mccloskey Coal Group - USA
- Mercator Lines Limited - India
- Coalindo Energy - Indonesia
- Central Java Power - Indonesia
- Maheswari Brothers Coal Limited - India
- Heidelberg Cement - Germany
- Africa Commodities Group - South Africa
- Formosa Plastics Group - Taiwan
- India Bulls Power Limited - India
- Meralco Power Generation, Philippines
- Georgia Ports Authority, United States
- Savvy Resources Ltd - HongKong
- Timah Investasi Mineral - Indoneisa
- Barasentosa Lestari - Indonesia
- Kartika Selabumi Mining - Indonesia
- Sree Jayajothi Cements Limited - India
- Global Coal Blending Company Limited - Australia
- Indian Energy Exchange, India
- Chettinad Cement Corporation Ltd - India
- Renaissance Capital - South Africa
- Bahari Cakrawala Sebuku - Indonesia
- Therma Luzon, Inc, Philippines
- Singapore Mercantile Exchange
- Malabar Cements Ltd - India
- Electricity Authority, New Zealand
- European Bulk Services B.V. - Netherlands
- Deloitte Consulting - India
- Sinarmas Energy and Mining - Indonesia
- Thai Mozambique Logistica
- London Commodity Brokers - England
- Mjunction Services Limited - India
- Thiess Contractors Indonesia
- Chamber of Mines of South Africa
- Vijayanagar Sugar Pvt Ltd - India
- Intertek Mineral Services - Indonesia
- Alfred C Toepfer International GmbH - Germany
- Maharashtra Electricity Regulatory Commission - India
- SN Aboitiz Power Inc, Philippines
- Larsen & Toubro Limited - India
- Semirara Mining and Power Corporation, Philippines
- Oldendorff Carriers - Singapore
- Edison Trading Spa - Italy
- Bank of Tokyo Mitsubishi UFJ Ltd
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Energy Development Corp, Philippines
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Medco Energi Mining Internasional
- Sakthi Sugars Limited - India
- Indika Energy - Indonesia
- Global Green Power PLC Corporation, Philippines
- Karaikal Port Pvt Ltd - India
- Bhushan Steel Limited - India
- Kepco SPC Power Corporation, Philippines
- Interocean Group of Companies - India
- Wood Mackenzie - Singapore
- LBH Netherlands Bv - Netherlands
- ASAPP Information Group - India
- South Luzon Thermal Energy Corporation
- Lanco Infratech Ltd - India
- Kalimantan Lumbung Energi - Indonesia
- Antam Resourcindo - Indonesia
- Rio Tinto Coal - Australia
- Grasim Industreis Ltd - India
- OPG Power Generation Pvt Ltd - India
- Vizag Seaport Private Limited - India
- Global Business Power Corporation, Philippines
- Vedanta Resources Plc - India
- Eastern Coal Council - USA
- Mintek Dendrill Indonesia
- Ambuja Cements Ltd - India
- Coastal Gujarat Power Limited - India
- GVK Power & Infra Limited - India
- Standard Chartered Bank - UAE
- IEA Clean Coal Centre - UK
- Minerals Council of Australia
- Karbindo Abesyapradhi - Indoneisa
- VISA Power Limited - India
- Ministry of Transport, Egypt
- Meenaskhi Energy Private Limited - India
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Wilmar Investment Holdings
- Salva Resources Pvt Ltd - India
- Xindia Steels Limited - India
- Gujarat Sidhee Cement - India
- Independent Power Producers Association of India
- Simpson Spence & Young - Indonesia
- Kobexindo Tractors - Indoneisa
- Eastern Energy - Thailand
- Port Waratah Coal Services - Australia
- Globalindo Alam Lestari - Indonesia
- Parry Sugars Refinery, India
- Central Electricity Authority - India
- White Energy Company Limited
- Romanian Commodities Exchange
- International Coal Ventures Pvt Ltd - India
- Coal and Oil Company - UAE
- Indogreen Group - Indonesia
- Petron Corporation, Philippines
- Siam City Cement PLC, Thailand
- Latin American Coal - Colombia
- Holcim Trading Pte Ltd - Singapore
- Merrill Lynch Commodities Europe
- Anglo American - United Kingdom
- Rashtriya Ispat Nigam Limited - India
- Parliament of New Zealand
- Commonwealth Bank - Australia
- Aditya Birla Group - India
- Bhatia International Limited - India
- Mercuria Energy - Indonesia
- Riau Bara Harum - Indonesia
- Krishnapatnam Port Company Ltd. - India
- Offshore Bulk Terminal Pte Ltd, Singapore
- GAC Shipping (India) Pvt Ltd
- Ceylon Electricity Board - Sri Lanka
- Directorate Of Revenue Intelligence - India
- SMG Consultants - Indonesia
- Iligan Light & Power Inc, Philippines
- San Jose City I Power Corp, Philippines
- Economic Council, Georgia
- Uttam Galva Steels Limited - India
- Sojitz Corporation - Japan
- Australian Commodity Traders Exchange
- Energy Link Ltd, New Zealand
- Neyveli Lignite Corporation Ltd, - India
- Indo Tambangraya Megah - Indonesia
- The State Trading Corporation of India Ltd
- Jaiprakash Power Ventures ltd
- MS Steel International - UAE
- Electricity Generating Authority of Thailand
- Billiton Holdings Pty Ltd - Australia
- Gujarat Mineral Development Corp Ltd - India
- Australian Coal Association
- Kapuas Tunggal Persada - Indonesia
- Planning Commission, India
- Samtan Co., Ltd - South Korea
- Kumho Petrochemical, South Korea
- Ministry of Finance - Indonesia
- SMC Global Power, Philippines
- The University of Queensland
- Marubeni Corporation - India
- Kaltim Prima Coal - Indonesia
- New Zealand Coal & Carbon
- Indian Oil Corporation Limited
- Aboitiz Power Corporation - Philippines
- Altura Mining Limited, Indonesia
- Sarangani Energy Corporation, Philippines
- Cement Manufacturers Association - India
- Bhoruka Overseas - Indonesia
- Power Finance Corporation Ltd., India
- Asmin Koalindo Tuhup - Indonesia
- Bangladesh Power Developement Board
- Ministry of Mines - Canada
- Leighton Contractors Pty Ltd - Australia
- Jorong Barutama Greston.PT - Indonesia
- PNOC Exploration Corporation - Philippines
- Semirara Mining Corp, Philippines
- Kideco Jaya Agung - Indonesia
- Price Waterhouse Coopers - Russia
- GN Power Mariveles Coal Plant, Philippines
- PTC India Limited - India
- Pendopo Energi Batubara - Indonesia
- Bukit Makmur.PT - Indonesia
- Cigading International Bulk Terminal - Indonesia
- Baramulti Group, Indonesia
- GMR Energy Limited - India
- Borneo Indobara - Indonesia
- The Treasury - Australian Government
- Manunggal Multi Energi - Indonesia
- Videocon Industries ltd - India
- Makarim & Taira - Indonesia
- Metalloyd Limited - United Kingdom
- Bayan Resources Tbk. - Indonesia
- Trasteel International SA, Italy
- CIMB Investment Bank - Malaysia
- Sical Logistics Limited - India
- Carbofer General Trading SA - India
- PetroVietnam Power Coal Import and Supply Company
- Pipit Mutiara Jaya. PT, Indonesia
- Banpu Public Company Limited - Thailand
- Indonesian Coal Mining Association
- Bukit Asam (Persero) Tbk - Indonesia
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- ICICI Bank Limited - India
- Agrawal Coal Company - India
- Tata Chemicals Ltd - India
- Bukit Baiduri Energy - Indonesia
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Directorate General of MIneral and Coal - Indonesia
- Bulk Trading Sa - Switzerland
- Petrochimia International Co. Ltd.- Taiwan
- Kohat Cement Company Ltd. - Pakistan
- PowerSource Philippines DevCo
- Tamil Nadu electricity Board
- Orica Australia Pty. Ltd.
- Toyota Tsusho Corporation, Japan
- Madhucon Powers Ltd - India
- TNB Fuel Sdn Bhd - Malaysia
- Jindal Steel & Power Ltd - India
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