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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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Monday, 29 October 18
IMPLEMENTATION OF SULPHUR 2020 LIMIT - CARRIAGE BAN ADOPTED - IMO
An amendment to support consistent implementation of the forthcoming 0.50% limit on sulphur in ships fuel oil was adopted by the International Mari ...
Monday, 29 October 18
SUPRAMAX: THE ASIAN AREA SAW FALLING RATES, WITH A 61,000DWT FIXING DELIVERY KOHSICHANG TRIP VIA INDONESIA, REDELIVERY INDIA, AT $10,500 - BALTIC BRIEFING
Capesize
A market of two halves for most of the week with rates in the Atlantic firming and easing in the East for most of the week, but then, ...
Friday, 26 October 18
SHIP OPERATING COSTS EXPECTED TO RISE IN 2018 AND 2019 - MOORE STEPHENS
Total vessel operating costs in the shipping industry are expected to rise by 2.7% in 2018 and by 3.1% in 2019, according to our latest survey.
...
Friday, 26 October 18
SEVERAL CONTRACTIONS IN GLOBAL STEEL PRODUCTION - JEFFREY LANDSBERG
World Steel Association data released today shows that global crude steel production totaled approximately 151.7 million tons in September. T ...
Thursday, 25 October 18
WHAT DOES THE "IMO 2020" REGULATION REALLY SAY? A QUICK GUIDE - BIMCO
KNOWLEDGE TO ELEVATE
The shipping industry has all eyes firmly fixed on the topic, but what exactly do the “IMO 2020” global sulph ...
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- Karaikal Port Pvt Ltd - India
- South Luzon Thermal Energy Corporation
- Aboitiz Power Corporation - Philippines
- Indika Energy - Indonesia
- Posco Energy - South Korea
- Medco Energi Mining Internasional
- Binh Thuan Hamico - Vietnam
- Indian Energy Exchange, India
- PetroVietnam Power Coal Import and Supply Company
- White Energy Company Limited
- Kaltim Prima Coal - Indonesia
- Borneo Indobara - Indonesia
- Larsen & Toubro Limited - India
- Karbindo Abesyapradhi - Indoneisa
- Mjunction Services Limited - India
- Jorong Barutama Greston.PT - Indonesia
- Trasteel International SA, Italy
- Latin American Coal - Colombia
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Maharashtra Electricity Regulatory Commission - India
- The University of Queensland
- Anglo American - United Kingdom
- Marubeni Corporation - India
- Sinarmas Energy and Mining - Indonesia
- PTC India Limited - India
- Directorate General of MIneral and Coal - Indonesia
- Petrochimia International Co. Ltd.- Taiwan
- Mercator Lines Limited - India
- Interocean Group of Companies - India
- Agrawal Coal Company - India
- Rio Tinto Coal - Australia
- Baramulti Group, Indonesia
- The Treasury - Australian Government
- Attock Cement Pakistan Limited
- Star Paper Mills Limited - India
- Indonesian Coal Mining Association
- Uttam Galva Steels Limited - India
- Kohat Cement Company Ltd. - Pakistan
- Semirara Mining Corp, Philippines
- Simpson Spence & Young - Indonesia
- Kideco Jaya Agung - Indonesia
- European Bulk Services B.V. - Netherlands
- Coal and Oil Company - UAE
- Salva Resources Pvt Ltd - India
- Sindya Power Generating Company Private Ltd
- Pipit Mutiara Jaya. PT, Indonesia
- Chamber of Mines of South Africa
- Sree Jayajothi Cements Limited - India
- Thiess Contractors Indonesia
- Planning Commission, India
- Lanco Infratech Ltd - India
- IHS Mccloskey Coal Group - USA
- Gujarat Sidhee Cement - India
- PowerSource Philippines DevCo
- Grasim Industreis Ltd - India
- Energy Link Ltd, New Zealand
- SN Aboitiz Power Inc, Philippines
- Price Waterhouse Coopers - Russia
- Energy Development Corp, Philippines
- Australian Coal Association
- Makarim & Taira - Indonesia
- OPG Power Generation Pvt Ltd - India
- Romanian Commodities Exchange
- Sojitz Corporation - Japan
- Alfred C Toepfer International GmbH - Germany
- Altura Mining Limited, Indonesia
- Georgia Ports Authority, United States
- Essar Steel Hazira Ltd - India
- Iligan Light & Power Inc, Philippines
- Cigading International Bulk Terminal - Indonesia
- India Bulls Power Limited - India
- PNOC Exploration Corporation - Philippines
- Africa Commodities Group - South Africa
- Asmin Koalindo Tuhup - Indonesia
- Sakthi Sugars Limited - India
- Maheswari Brothers Coal Limited - India
- Heidelberg Cement - Germany
- Rashtriya Ispat Nigam Limited - India
- Kartika Selabumi Mining - Indonesia
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Miang Besar Coal Terminal - Indonesia
- Neyveli Lignite Corporation Ltd, - India
- Meralco Power Generation, Philippines
- SMG Consultants - Indonesia
- Eastern Coal Council - USA
- Meenaskhi Energy Private Limited - India
- Videocon Industries ltd - India
- Bayan Resources Tbk. - Indonesia
- Leighton Contractors Pty Ltd - Australia
- Holcim Trading Pte Ltd - Singapore
- Bukit Makmur.PT - Indonesia
- Standard Chartered Bank - UAE
- Banpu Public Company Limited - Thailand
- Gujarat Mineral Development Corp Ltd - India
- Siam City Cement PLC, Thailand
- Mintek Dendrill Indonesia
- Savvy Resources Ltd - HongKong
- Tata Chemicals Ltd - India
- Ceylon Electricity Board - Sri Lanka
- Indian Oil Corporation Limited
- Parliament of New Zealand
- Global Business Power Corporation, Philippines
- Singapore Mercantile Exchange
- Port Waratah Coal Services - Australia
- London Commodity Brokers - England
- IEA Clean Coal Centre - UK
- Central Java Power - Indonesia
- Thai Mozambique Logistica
- Coastal Gujarat Power Limited - India
- Global Coal Blending Company Limited - Australia
- Wilmar Investment Holdings
- TNB Fuel Sdn Bhd - Malaysia
- LBH Netherlands Bv - Netherlands
- Malabar Cements Ltd - India
- Vijayanagar Sugar Pvt Ltd - India
- International Coal Ventures Pvt Ltd - India
- Kalimantan Lumbung Energi - Indonesia
- Tamil Nadu electricity Board
- MS Steel International - UAE
- Chettinad Cement Corporation Ltd - India
- Jindal Steel & Power Ltd - India
- Riau Bara Harum - Indonesia
- Cement Manufacturers Association - India
- Renaissance Capital - South Africa
- Bhushan Steel Limited - India
- TeaM Sual Corporation - Philippines
- Bhoruka Overseas - Indonesia
- Economic Council, Georgia
- Eastern Energy - Thailand
- VISA Power Limited - India
- Straits Asia Resources Limited - Singapore
- Krishnapatnam Port Company Ltd. - India
- Kapuas Tunggal Persada - Indonesia
- Dalmia Cement Bharat India
- GMR Energy Limited - India
- Wood Mackenzie - Singapore
- New Zealand Coal & Carbon
- Mercuria Energy - Indonesia
- Kobexindo Tractors - Indoneisa
- Minerals Council of Australia
- Electricity Authority, New Zealand
- Goldman Sachs - Singapore
- ICICI Bank Limited - India
- Electricity Generating Authority of Thailand
- Directorate Of Revenue Intelligence - India
- Coalindo Energy - Indonesia
- Central Electricity Authority - India
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Barasentosa Lestari - Indonesia
- Semirara Mining and Power Corporation, Philippines
- Power Finance Corporation Ltd., India
- ASAPP Information Group - India
- Xindia Steels Limited - India
- Gujarat Electricity Regulatory Commission - India
- Siam City Cement - Thailand
- Orica Mining Services - Indonesia
- McConnell Dowell - Australia
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Ambuja Cements Ltd - India
- Toyota Tsusho Corporation, Japan
- Samtan Co., Ltd - South Korea
- Pendopo Energi Batubara - Indonesia
- Vedanta Resources Plc - India
- Kepco SPC Power Corporation, Philippines
- Carbofer General Trading SA - India
- Ministry of Mines - Canada
- Bahari Cakrawala Sebuku - Indonesia
- Ministry of Finance - Indonesia
- The State Trading Corporation of India Ltd
- Independent Power Producers Association of India
- Bhatia International Limited - India
- Jaiprakash Power Ventures ltd
- Ind-Barath Power Infra Limited - India
- Globalindo Alam Lestari - Indonesia
- Offshore Bulk Terminal Pte Ltd, Singapore
- Bharathi Cement Corporation - India
- Timah Investasi Mineral - Indoneisa
- Aditya Birla Group - India
- Petron Corporation, Philippines
- Kumho Petrochemical, South Korea
- Bukit Asam (Persero) Tbk - Indonesia
- Australian Commodity Traders Exchange
- Intertek Mineral Services - Indonesia
- Merrill Lynch Commodities Europe
- Parry Sugars Refinery, India
- Billiton Holdings Pty Ltd - Australia
- Oldendorff Carriers - Singapore
- Formosa Plastics Group - Taiwan
- Bulk Trading Sa - Switzerland
- CNBM International Corporation - China
- Bukit Baiduri Energy - Indonesia
- GAC Shipping (India) Pvt Ltd
- Sical Logistics Limited - India
- Madhucon Powers Ltd - India
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- GN Power Mariveles Coal Plant, Philippines
- Metalloyd Limited - United Kingdom
- Ministry of Transport, Egypt
- San Jose City I Power Corp, Philippines
- Edison Trading Spa - Italy
- Sarangani Energy Corporation, Philippines
- Commonwealth Bank - Australia
- Orica Australia Pty. Ltd.
- Vizag Seaport Private Limited - India
- SMC Global Power, Philippines
- CIMB Investment Bank - Malaysia
- Global Green Power PLC Corporation, Philippines
- Deloitte Consulting - India
- Bangladesh Power Developement Board
- Therma Luzon, Inc, Philippines
- AsiaOL BioFuels Corp., Philippines
- Manunggal Multi Energi - Indonesia
- Antam Resourcindo - Indonesia
- Indo Tambangraya Megah - Indonesia
- Indogreen Group - Indonesia
- Bank of Tokyo Mitsubishi UFJ Ltd
- GVK Power & Infra Limited - India
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