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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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- Vizag Seaport Private Limited - India
- Uttam Galva Steels Limited - India
- Jaiprakash Power Ventures ltd
- TeaM Sual Corporation - Philippines
- Mjunction Services Limited - India
- Bhoruka Overseas - Indonesia
- PTC India Limited - India
- India Bulls Power Limited - India
- Manunggal Multi Energi - Indonesia
- Gujarat Sidhee Cement - India
- Coastal Gujarat Power Limited - India
- Georgia Ports Authority, United States
- International Coal Ventures Pvt Ltd - India
- Australian Commodity Traders Exchange
- Timah Investasi Mineral - Indoneisa
- Petron Corporation, Philippines
- Oldendorff Carriers - Singapore
- Chettinad Cement Corporation Ltd - India
- Mercuria Energy - Indonesia
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Thai Mozambique Logistica
- Eastern Coal Council - USA
- Jorong Barutama Greston.PT - Indonesia
- CIMB Investment Bank - Malaysia
- McConnell Dowell - Australia
- Cement Manufacturers Association - India
- Offshore Bulk Terminal Pte Ltd, Singapore
- Aditya Birla Group - India
- Karaikal Port Pvt Ltd - India
- Indika Energy - Indonesia
- Gujarat Electricity Regulatory Commission - India
- Siam City Cement - Thailand
- Singapore Mercantile Exchange
- Altura Mining Limited, Indonesia
- Meralco Power Generation, Philippines
- Therma Luzon, Inc, Philippines
- Global Green Power PLC Corporation, Philippines
- Madhucon Powers Ltd - India
- Kartika Selabumi Mining - Indonesia
- ASAPP Information Group - India
- Power Finance Corporation Ltd., India
- Intertek Mineral Services - Indonesia
- Central Java Power - Indonesia
- Kalimantan Lumbung Energi - Indonesia
- Mintek Dendrill Indonesia
- Star Paper Mills Limited - India
- Riau Bara Harum - Indonesia
- OPG Power Generation Pvt Ltd - India
- Simpson Spence & Young - Indonesia
- Barasentosa Lestari - Indonesia
- Sarangani Energy Corporation, Philippines
- Agrawal Coal Company - India
- Indonesian Coal Mining Association
- White Energy Company Limited
- Maharashtra Electricity Regulatory Commission - India
- Edison Trading Spa - Italy
- Mercator Lines Limited - India
- Bharathi Cement Corporation - India
- Bank of Tokyo Mitsubishi UFJ Ltd
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Salva Resources Pvt Ltd - India
- Carbofer General Trading SA - India
- Xindia Steels Limited - India
- Price Waterhouse Coopers - Russia
- Sinarmas Energy and Mining - Indonesia
- Attock Cement Pakistan Limited
- AsiaOL BioFuels Corp., Philippines
- Bangladesh Power Developement Board
- GN Power Mariveles Coal Plant, Philippines
- Karbindo Abesyapradhi - Indoneisa
- Malabar Cements Ltd - India
- Maheswari Brothers Coal Limited - India
- TNB Fuel Sdn Bhd - Malaysia
- PetroVietnam Power Coal Import and Supply Company
- Neyveli Lignite Corporation Ltd, - India
- Latin American Coal - Colombia
- Central Electricity Authority - India
- Electricity Authority, New Zealand
- Thiess Contractors Indonesia
- Chamber of Mines of South Africa
- Directorate General of MIneral and Coal - Indonesia
- Banpu Public Company Limited - Thailand
- Vedanta Resources Plc - India
- Sojitz Corporation - Japan
- Medco Energi Mining Internasional
- Miang Besar Coal Terminal - Indonesia
- MS Steel International - UAE
- GMR Energy Limited - India
- SMG Consultants - Indonesia
- Global Business Power Corporation, Philippines
- Indian Energy Exchange, India
- GVK Power & Infra Limited - India
- Kapuas Tunggal Persada - Indonesia
- Toyota Tsusho Corporation, Japan
- Port Waratah Coal Services - Australia
- Ministry of Mines - Canada
- Ministry of Transport, Egypt
- Australian Coal Association
- Heidelberg Cement - Germany
- San Jose City I Power Corp, Philippines
- Marubeni Corporation - India
- IHS Mccloskey Coal Group - USA
- Makarim & Taira - Indonesia
- Bhushan Steel Limited - India
- Planning Commission, India
- Cigading International Bulk Terminal - Indonesia
- Kepco SPC Power Corporation, Philippines
- Anglo American - United Kingdom
- Sindya Power Generating Company Private Ltd
- Ind-Barath Power Infra Limited - India
- South Luzon Thermal Energy Corporation
- Tata Chemicals Ltd - India
- Minerals Council of Australia
- Wilmar Investment Holdings
- Bahari Cakrawala Sebuku - Indonesia
- Meenaskhi Energy Private Limited - India
- Krishnapatnam Port Company Ltd. - India
- Interocean Group of Companies - India
- Sical Logistics Limited - India
- Samtan Co., Ltd - South Korea
- PowerSource Philippines DevCo
- Bhatia International Limited - India
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Ministry of Finance - Indonesia
- Directorate Of Revenue Intelligence - India
- Baramulti Group, Indonesia
- Energy Development Corp, Philippines
- Larsen & Toubro Limited - India
- Goldman Sachs - Singapore
- Leighton Contractors Pty Ltd - Australia
- Formosa Plastics Group - Taiwan
- Bulk Trading Sa - Switzerland
- Borneo Indobara - Indonesia
- Dalmia Cement Bharat India
- Essar Steel Hazira Ltd - India
- PNOC Exploration Corporation - Philippines
- Kumho Petrochemical, South Korea
- The Treasury - Australian Government
- Iligan Light & Power Inc, Philippines
- Renaissance Capital - South Africa
- Antam Resourcindo - Indonesia
- Rashtriya Ispat Nigam Limited - India
- VISA Power Limited - India
- Sree Jayajothi Cements Limited - India
- Standard Chartered Bank - UAE
- Romanian Commodities Exchange
- Bukit Makmur.PT - Indonesia
- Parliament of New Zealand
- LBH Netherlands Bv - Netherlands
- Metalloyd Limited - United Kingdom
- Ceylon Electricity Board - Sri Lanka
- Pendopo Energi Batubara - Indonesia
- Indian Oil Corporation Limited
- Bukit Asam (Persero) Tbk - Indonesia
- Africa Commodities Group - South Africa
- Independent Power Producers Association of India
- Orica Australia Pty. Ltd.
- Globalindo Alam Lestari - Indonesia
- ICICI Bank Limited - India
- Deloitte Consulting - India
- Grasim Industreis Ltd - India
- Merrill Lynch Commodities Europe
- European Bulk Services B.V. - Netherlands
- Electricity Generating Authority of Thailand
- Videocon Industries ltd - India
- Kideco Jaya Agung - Indonesia
- Semirara Mining Corp, Philippines
- Coal and Oil Company - UAE
- Semirara Mining and Power Corporation, Philippines
- Lanco Infratech Ltd - India
- Vijayanagar Sugar Pvt Ltd - India
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- The University of Queensland
- Asmin Koalindo Tuhup - Indonesia
- Coalindo Energy - Indonesia
- New Zealand Coal & Carbon
- SN Aboitiz Power Inc, Philippines
- Indo Tambangraya Megah - Indonesia
- Billiton Holdings Pty Ltd - Australia
- Wood Mackenzie - Singapore
- Economic Council, Georgia
- Savvy Resources Ltd - HongKong
- GAC Shipping (India) Pvt Ltd
- Gujarat Mineral Development Corp Ltd - India
- Siam City Cement PLC, Thailand
- Holcim Trading Pte Ltd - Singapore
- Binh Thuan Hamico - Vietnam
- The State Trading Corporation of India Ltd
- Trasteel International SA, Italy
- Kobexindo Tractors - Indoneisa
- Sakthi Sugars Limited - India
- Commonwealth Bank - Australia
- Parry Sugars Refinery, India
- Petrochimia International Co. Ltd.- Taiwan
- Eastern Energy - Thailand
- Ambuja Cements Ltd - India
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Orica Mining Services - Indonesia
- Bukit Baiduri Energy - Indonesia
- Straits Asia Resources Limited - Singapore
- Alfred C Toepfer International GmbH - Germany
- Jindal Steel & Power Ltd - India
- London Commodity Brokers - England
- Bayan Resources Tbk. - Indonesia
- Indogreen Group - Indonesia
- Aboitiz Power Corporation - Philippines
- Global Coal Blending Company Limited - Australia
- CNBM International Corporation - China
- Posco Energy - South Korea
- Rio Tinto Coal - Australia
- SMC Global Power, Philippines
- Kaltim Prima Coal - Indonesia
- IEA Clean Coal Centre - UK
- Tamil Nadu electricity Board
- Pipit Mutiara Jaya. PT, Indonesia
- Energy Link Ltd, New Zealand
- Kohat Cement Company Ltd. - Pakistan
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