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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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Wednesday, 24 October 18
MARKET INSIGHT - NASSOS SOULAKIS
Looking at 2018 SnP activity, it is evident that Greek, Chinese and North European (German and Norwegian) owners are the top buying nationalities, ...
Wednesday, 24 October 18
CHINESE POWER PLANT STOCKPILES AT HIGHEST LEVEL SINCE 2015 - JEFFREY LANDSBERG
Chinese power plant coal stockpiles have climbed to approximately 83.3 million tons as of the middle of this month, said Jeffrey Landsberg in his e ...
Tuesday, 23 October 18
WILL THE U.S. COAL DECLINE CONTINUE? - FORBES
What’s Trump’s new coal proposal?
Adding to its controversial plan to leverage federal authority to keep retiring baselo ...
Monday, 22 October 18
CONTINUED HIGH LNG PRICES; TRADE WAR IMPACT LIMITED - FITCH RATINGS
Fitch Ratings expects sustained high spot liquefied natural gas (LNG) and contract prices over the next two quarters on limited investment in LNG e ...
Monday, 22 October 18
WINTER OIL MARKET OUTLOOK - OPEC
The oil market in the winter season is generally characterized by demand for diesel, particularly in the northern hemisphere, leaving product marke ...
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- Cigading International Bulk Terminal - Indonesia
- Posco Energy - South Korea
- Ministry of Transport, Egypt
- Petron Corporation, Philippines
- Kumho Petrochemical, South Korea
- CNBM International Corporation - China
- Madhucon Powers Ltd - India
- Sakthi Sugars Limited - India
- GAC Shipping (India) Pvt Ltd
- Gujarat Sidhee Cement - India
- Deloitte Consulting - India
- Leighton Contractors Pty Ltd - Australia
- Africa Commodities Group - South Africa
- MS Steel International - UAE
- Xindia Steels Limited - India
- SN Aboitiz Power Inc, Philippines
- TeaM Sual Corporation - Philippines
- Kobexindo Tractors - Indoneisa
- Jorong Barutama Greston.PT - Indonesia
- Lanco Infratech Ltd - India
- Energy Development Corp, Philippines
- Altura Mining Limited, Indonesia
- Latin American Coal - Colombia
- Bukit Makmur.PT - Indonesia
- SMC Global Power, Philippines
- IEA Clean Coal Centre - UK
- Planning Commission, India
- Indo Tambangraya Megah - Indonesia
- Economic Council, Georgia
- Globalindo Alam Lestari - Indonesia
- Minerals Council of Australia
- International Coal Ventures Pvt Ltd - India
- Straits Asia Resources Limited - Singapore
- Central Java Power - Indonesia
- Bahari Cakrawala Sebuku - Indonesia
- Ministry of Finance - Indonesia
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Commonwealth Bank - Australia
- Australian Commodity Traders Exchange
- Global Green Power PLC Corporation, Philippines
- Meenaskhi Energy Private Limited - India
- Kaltim Prima Coal - Indonesia
- Marubeni Corporation - India
- Australian Coal Association
- Kepco SPC Power Corporation, Philippines
- Essar Steel Hazira Ltd - India
- Rashtriya Ispat Nigam Limited - India
- Renaissance Capital - South Africa
- Banpu Public Company Limited - Thailand
- Independent Power Producers Association of India
- Goldman Sachs - Singapore
- GMR Energy Limited - India
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Sojitz Corporation - Japan
- Coal and Oil Company - UAE
- Salva Resources Pvt Ltd - India
- Orica Mining Services - Indonesia
- Bulk Trading Sa - Switzerland
- Metalloyd Limited - United Kingdom
- Gujarat Mineral Development Corp Ltd - India
- Kartika Selabumi Mining - Indonesia
- Maharashtra Electricity Regulatory Commission - India
- Global Coal Blending Company Limited - Australia
- Formosa Plastics Group - Taiwan
- Aboitiz Power Corporation - Philippines
- Ceylon Electricity Board - Sri Lanka
- Anglo American - United Kingdom
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Jaiprakash Power Ventures ltd
- Semirara Mining Corp, Philippines
- Bhushan Steel Limited - India
- Bank of Tokyo Mitsubishi UFJ Ltd
- Sree Jayajothi Cements Limited - India
- Mercuria Energy - Indonesia
- Coastal Gujarat Power Limited - India
- OPG Power Generation Pvt Ltd - India
- Sarangani Energy Corporation, Philippines
- Pendopo Energi Batubara - Indonesia
- The University of Queensland
- Price Waterhouse Coopers - Russia
- ICICI Bank Limited - India
- Parry Sugars Refinery, India
- Bhatia International Limited - India
- PTC India Limited - India
- Jindal Steel & Power Ltd - India
- Electricity Generating Authority of Thailand
- Coalindo Energy - Indonesia
- Thiess Contractors Indonesia
- VISA Power Limited - India
- IHS Mccloskey Coal Group - USA
- Eastern Coal Council - USA
- Eastern Energy - Thailand
- Riau Bara Harum - Indonesia
- Pipit Mutiara Jaya. PT, Indonesia
- Standard Chartered Bank - UAE
- CIMB Investment Bank - Malaysia
- Karbindo Abesyapradhi - Indoneisa
- LBH Netherlands Bv - Netherlands
- Alfred C Toepfer International GmbH - Germany
- Directorate Of Revenue Intelligence - India
- Asmin Koalindo Tuhup - Indonesia
- Thai Mozambique Logistica
- Medco Energi Mining Internasional
- Miang Besar Coal Terminal - Indonesia
- Kalimantan Lumbung Energi - Indonesia
- Sinarmas Energy and Mining - Indonesia
- White Energy Company Limited
- Singapore Mercantile Exchange
- Electricity Authority, New Zealand
- Chamber of Mines of South Africa
- Star Paper Mills Limited - India
- Iligan Light & Power Inc, Philippines
- Bhoruka Overseas - Indonesia
- AsiaOL BioFuels Corp., Philippines
- ASAPP Information Group - India
- Parliament of New Zealand
- Kapuas Tunggal Persada - Indonesia
- Chettinad Cement Corporation Ltd - India
- European Bulk Services B.V. - Netherlands
- Maheswari Brothers Coal Limited - India
- Kohat Cement Company Ltd. - Pakistan
- San Jose City I Power Corp, Philippines
- Power Finance Corporation Ltd., India
- Agrawal Coal Company - India
- GVK Power & Infra Limited - India
- Vizag Seaport Private Limited - India
- Energy Link Ltd, New Zealand
- Indonesian Coal Mining Association
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Gujarat Electricity Regulatory Commission - India
- Malabar Cements Ltd - India
- Rio Tinto Coal - Australia
- PNOC Exploration Corporation - Philippines
- Interocean Group of Companies - India
- Bayan Resources Tbk. - Indonesia
- PowerSource Philippines DevCo
- Ambuja Cements Ltd - India
- PetroVietnam Power Coal Import and Supply Company
- Intertek Mineral Services - Indonesia
- Bangladesh Power Developement Board
- Binh Thuan Hamico - Vietnam
- Trasteel International SA, Italy
- McConnell Dowell - Australia
- Sindya Power Generating Company Private Ltd
- Makarim & Taira - Indonesia
- Samtan Co., Ltd - South Korea
- Georgia Ports Authority, United States
- Romanian Commodities Exchange
- Barasentosa Lestari - Indonesia
- Oldendorff Carriers - Singapore
- Siam City Cement PLC, Thailand
- Semirara Mining and Power Corporation, Philippines
- Baramulti Group, Indonesia
- Sical Logistics Limited - India
- Bukit Asam (Persero) Tbk - Indonesia
- Indian Oil Corporation Limited
- Billiton Holdings Pty Ltd - Australia
- Holcim Trading Pte Ltd - Singapore
- The State Trading Corporation of India Ltd
- Global Business Power Corporation, Philippines
- Larsen & Toubro Limited - India
- Heidelberg Cement - Germany
- Savvy Resources Ltd - HongKong
- Carbofer General Trading SA - India
- New Zealand Coal & Carbon
- Tata Chemicals Ltd - India
- Neyveli Lignite Corporation Ltd, - India
- Mintek Dendrill Indonesia
- Grasim Industreis Ltd - India
- Simpson Spence & Young - Indonesia
- Offshore Bulk Terminal Pte Ltd, Singapore
- Ministry of Mines - Canada
- Therma Luzon, Inc, Philippines
- Port Waratah Coal Services - Australia
- Orica Australia Pty. Ltd.
- Indian Energy Exchange, India
- Wilmar Investment Holdings
- Bharathi Cement Corporation - India
- Krishnapatnam Port Company Ltd. - India
- London Commodity Brokers - England
- Tamil Nadu electricity Board
- Toyota Tsusho Corporation, Japan
- Mjunction Services Limited - India
- Timah Investasi Mineral - Indoneisa
- Ind-Barath Power Infra Limited - India
- Petrochimia International Co. Ltd.- Taiwan
- Vijayanagar Sugar Pvt Ltd - India
- Indogreen Group - Indonesia
- Central Electricity Authority - India
- Videocon Industries ltd - India
- GN Power Mariveles Coal Plant, Philippines
- Wood Mackenzie - Singapore
- Bukit Baiduri Energy - Indonesia
- South Luzon Thermal Energy Corporation
- Borneo Indobara - Indonesia
- Siam City Cement - Thailand
- Kideco Jaya Agung - Indonesia
- Aditya Birla Group - India
- India Bulls Power Limited - India
- Edison Trading Spa - Italy
- The Treasury - Australian Government
- Merrill Lynch Commodities Europe
- Attock Cement Pakistan Limited
- Indika Energy - Indonesia
- Dalmia Cement Bharat India
- SMG Consultants - Indonesia
- Manunggal Multi Energi - Indonesia
- Cement Manufacturers Association - India
- Meralco Power Generation, Philippines
- Mercator Lines Limited - India
- Directorate General of MIneral and Coal - Indonesia
- Vedanta Resources Plc - India
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- TNB Fuel Sdn Bhd - Malaysia
- Antam Resourcindo - Indonesia
- Uttam Galva Steels Limited - India
- Karaikal Port Pvt Ltd - India
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