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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, 02 November 18
COAL FETCHES 102% PREMIUM IN E-AUCTION, SURPASSING THE EARLIER HIGHEST OF 95% - FINANCIAL EXPRESS
Coal prices have received a premium of 102% in spot e-auction during September 2018, surpassing the earlier highest of 95% premium during the spot ...
Friday, 02 November 18
CHINA: COAL CONSUMPTION POSTS STRONG GROWTH ON BACK OF POWER GENERATION DEMAND - CHINA DAILY
China’s energy consumption experienced continuous rebound during the first three quarters in 2018, National Energy Administration announced o ...
Thursday, 01 November 18
IMO 2020 - EXPLORING THE OPTION OF SOX SCRUBBERS - SIDDHARTH MAHAJAN, GARD
KNOWLEDGE TO ELEVATE
There are four possible methods of compliance:
1.use VLSFO (very low Sulphur oil) or blends;
2,use dis ...
Wednesday, 31 October 18
INDIA: COAL IMPORTS SURGE ON DOMESTIC SHORT SUPPLY - HINDU
Shortage of thermal coal supply in India has pushed imports up to 85 million tonnes (mt) in the first half of the current fiscal compared to 75 mt ...
Wednesday, 31 October 18
SHIPPING MARKET INSIGHT - APOSTOLOS ROMPOPOULOS
Since the IMO’s 2020 global cap on sulphur in marine fuels is coming into force, ship-owners have to decide whether they will operate using e ...
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- Samtan Co., Ltd - South Korea
- GVK Power & Infra Limited - India
- Interocean Group of Companies - India
- Chettinad Cement Corporation Ltd - India
- Goldman Sachs - Singapore
- Meralco Power Generation, Philippines
- Holcim Trading Pte Ltd - Singapore
- Indogreen Group - Indonesia
- Eastern Coal Council - USA
- Rashtriya Ispat Nigam Limited - India
- Renaissance Capital - South Africa
- Australian Coal Association
- Africa Commodities Group - South Africa
- Sindya Power Generating Company Private Ltd
- Bukit Makmur.PT - Indonesia
- LBH Netherlands Bv - Netherlands
- Ceylon Electricity Board - Sri Lanka
- Central Electricity Authority - India
- Global Business Power Corporation, Philippines
- South Luzon Thermal Energy Corporation
- Rio Tinto Coal - Australia
- Larsen & Toubro Limited - India
- Sojitz Corporation - Japan
- Mjunction Services Limited - India
- Orica Australia Pty. Ltd.
- Attock Cement Pakistan Limited
- Formosa Plastics Group - Taiwan
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Leighton Contractors Pty Ltd - Australia
- Lanco Infratech Ltd - India
- Savvy Resources Ltd - HongKong
- Electricity Authority, New Zealand
- Altura Mining Limited, Indonesia
- Asmin Koalindo Tuhup - Indonesia
- Uttam Galva Steels Limited - India
- Energy Development Corp, Philippines
- Indika Energy - Indonesia
- Indian Oil Corporation Limited
- Kumho Petrochemical, South Korea
- Deloitte Consulting - India
- Bangladesh Power Developement Board
- Standard Chartered Bank - UAE
- Borneo Indobara - Indonesia
- Australian Commodity Traders Exchange
- PNOC Exploration Corporation - Philippines
- Binh Thuan Hamico - Vietnam
- Xindia Steels Limited - India
- Sree Jayajothi Cements Limited - India
- Bhoruka Overseas - Indonesia
- Thiess Contractors Indonesia
- Billiton Holdings Pty Ltd - Australia
- Timah Investasi Mineral - Indoneisa
- Aboitiz Power Corporation - Philippines
- Malabar Cements Ltd - India
- Aditya Birla Group - India
- Chamber of Mines of South Africa
- Economic Council, Georgia
- Makarim & Taira - Indonesia
- Tamil Nadu electricity Board
- The Treasury - Australian Government
- Electricity Generating Authority of Thailand
- Vijayanagar Sugar Pvt Ltd - India
- CIMB Investment Bank - Malaysia
- Jindal Steel & Power Ltd - India
- Pipit Mutiara Jaya. PT, Indonesia
- Kobexindo Tractors - Indoneisa
- Semirara Mining Corp, Philippines
- Latin American Coal - Colombia
- Petrochimia International Co. Ltd.- Taiwan
- Indo Tambangraya Megah - Indonesia
- VISA Power Limited - India
- Sakthi Sugars Limited - India
- Ministry of Transport, Egypt
- Marubeni Corporation - India
- Metalloyd Limited - United Kingdom
- SMC Global Power, Philippines
- PTC India Limited - India
- McConnell Dowell - Australia
- AsiaOL BioFuels Corp., Philippines
- Edison Trading Spa - Italy
- Maheswari Brothers Coal Limited - India
- Antam Resourcindo - Indonesia
- Planning Commission, India
- Directorate Of Revenue Intelligence - India
- Bank of Tokyo Mitsubishi UFJ Ltd
- CNBM International Corporation - China
- Sarangani Energy Corporation, Philippines
- Jaiprakash Power Ventures ltd
- The University of Queensland
- Heidelberg Cement - Germany
- Medco Energi Mining Internasional
- Pendopo Energi Batubara - Indonesia
- Trasteel International SA, Italy
- Wilmar Investment Holdings
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Coal and Oil Company - UAE
- Miang Besar Coal Terminal - Indonesia
- Indonesian Coal Mining Association
- Banpu Public Company Limited - Thailand
- IHS Mccloskey Coal Group - USA
- Barasentosa Lestari - Indonesia
- GN Power Mariveles Coal Plant, Philippines
- White Energy Company Limited
- Siam City Cement - Thailand
- ASAPP Information Group - India
- Maharashtra Electricity Regulatory Commission - India
- TNB Fuel Sdn Bhd - Malaysia
- Port Waratah Coal Services - Australia
- Mintek Dendrill Indonesia
- Madhucon Powers Ltd - India
- London Commodity Brokers - England
- Dalmia Cement Bharat India
- ICICI Bank Limited - India
- IEA Clean Coal Centre - UK
- Indian Energy Exchange, India
- Anglo American - United Kingdom
- Orica Mining Services - Indonesia
- Minerals Council of Australia
- Karaikal Port Pvt Ltd - India
- Merrill Lynch Commodities Europe
- Kartika Selabumi Mining - Indonesia
- Bukit Baiduri Energy - Indonesia
- Romanian Commodities Exchange
- PetroVietnam Power Coal Import and Supply Company
- Essar Steel Hazira Ltd - India
- Agrawal Coal Company - India
- SN Aboitiz Power Inc, Philippines
- Global Green Power PLC Corporation, Philippines
- Directorate General of MIneral and Coal - Indonesia
- Ministry of Mines - Canada
- Bahari Cakrawala Sebuku - Indonesia
- GAC Shipping (India) Pvt Ltd
- Parliament of New Zealand
- Straits Asia Resources Limited - Singapore
- Petron Corporation, Philippines
- Alfred C Toepfer International GmbH - Germany
- Salva Resources Pvt Ltd - India
- Vedanta Resources Plc - India
- Coastal Gujarat Power Limited - India
- International Coal Ventures Pvt Ltd - India
- Kepco SPC Power Corporation, Philippines
- Star Paper Mills Limited - India
- The State Trading Corporation of India Ltd
- Simpson Spence & Young - Indonesia
- Videocon Industries ltd - India
- Georgia Ports Authority, United States
- Kapuas Tunggal Persada - Indonesia
- Bhushan Steel Limited - India
- Ind-Barath Power Infra Limited - India
- TeaM Sual Corporation - Philippines
- GMR Energy Limited - India
- Gujarat Electricity Regulatory Commission - India
- Singapore Mercantile Exchange
- Gujarat Sidhee Cement - India
- Kideco Jaya Agung - Indonesia
- Krishnapatnam Port Company Ltd. - India
- Parry Sugars Refinery, India
- Independent Power Producers Association of India
- San Jose City I Power Corp, Philippines
- Semirara Mining and Power Corporation, Philippines
- Eastern Energy - Thailand
- Central Java Power - Indonesia
- Coalindo Energy - Indonesia
- Wood Mackenzie - Singapore
- Baramulti Group, Indonesia
- European Bulk Services B.V. - Netherlands
- Power Finance Corporation Ltd., India
- Tata Chemicals Ltd - India
- Vizag Seaport Private Limited - India
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Toyota Tsusho Corporation, Japan
- Grasim Industreis Ltd - India
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Thai Mozambique Logistica
- Mercuria Energy - Indonesia
- Ambuja Cements Ltd - India
- Gujarat Mineral Development Corp Ltd - India
- Ministry of Finance - Indonesia
- Mercator Lines Limited - India
- SMG Consultants - Indonesia
- Siam City Cement PLC, Thailand
- Sical Logistics Limited - India
- Manunggal Multi Energi - Indonesia
- Kohat Cement Company Ltd. - Pakistan
- Therma Luzon, Inc, Philippines
- Bhatia International Limited - India
- Offshore Bulk Terminal Pte Ltd, Singapore
- Global Coal Blending Company Limited - Australia
- Iligan Light & Power Inc, Philippines
- Posco Energy - South Korea
- Karbindo Abesyapradhi - Indoneisa
- Jorong Barutama Greston.PT - Indonesia
- Intertek Mineral Services - Indonesia
- Meenaskhi Energy Private Limited - India
- Globalindo Alam Lestari - Indonesia
- Riau Bara Harum - Indonesia
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- MS Steel International - UAE
- Energy Link Ltd, New Zealand
- Cigading International Bulk Terminal - Indonesia
- PowerSource Philippines DevCo
- Kaltim Prima Coal - Indonesia
- Commonwealth Bank - Australia
- Cement Manufacturers Association - India
- Oldendorff Carriers - Singapore
- Sinarmas Energy and Mining - Indonesia
- Bulk Trading Sa - Switzerland
- New Zealand Coal & Carbon
- Bayan Resources Tbk. - Indonesia
- Kalimantan Lumbung Energi - Indonesia
- India Bulls Power Limited - India
- Carbofer General Trading SA - India
- OPG Power Generation Pvt Ltd - India
- Bukit Asam (Persero) Tbk - Indonesia
- Bharathi Cement Corporation - India
- Price Waterhouse Coopers - Russia
- Neyveli Lignite Corporation Ltd, - India
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