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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, 17 October 18
SHIPPING MARKET INSIGHT - TIMOS PAPADIMITRIOU
In the last three months approximately 72 tankers changed hands involving ships larger than 33kdwt up to VLCC. 43 of those vessels had to do ...
Tuesday, 16 October 18
A PRACTICAL OVERVIEW OF THE IMO 2020 SULPHUR CAP - CLYDE&CO
KNOWLEDGE TO ELEVATE
With less than eighteen months before Regulation 14.1.3 of Annex VI of the MARPOL Convention comes into effect, there are ...
Saturday, 13 October 18
SUPRAMAX: SIGNIFICANT ACTIVITY IN THE INDIAN OCEAN WAS EVIDENT AND RATES JUMPED - BALTIC BRIEFING
Capesize
A sharp reversal of fortunes for the big ships as the week closed after a depressed beginning. To start with drops were sudden, with t ...
Wednesday, 10 October 18
SHIPPING MARKET INSIGHT - ILIAS M. LALAOUNIS
During the end of last month the BHSI was hovering around 630 points, while the last observed sale on a 10-yr old Japanese Handy was the M/V Van Im ...
Monday, 08 October 18
INDONESIAN THERMAL COAL PRICE REFERENCE FELL 3.74% IN OCTOBER 2018
COALspot.com: The Ministry of Energy and Mineral Resources of the Republic of Indonesia has revised down the benchmark price of Indonesian thermal ...
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- Thiess Contractors Indonesia
- Bulk Trading Sa - Switzerland
- Siam City Cement PLC, Thailand
- Latin American Coal - Colombia
- Bhoruka Overseas - Indonesia
- IEA Clean Coal Centre - UK
- Savvy Resources Ltd - HongKong
- Parry Sugars Refinery, India
- MS Steel International - UAE
- Indika Energy - Indonesia
- Directorate Of Revenue Intelligence - India
- Bukit Asam (Persero) Tbk - Indonesia
- Attock Cement Pakistan Limited
- Price Waterhouse Coopers - Russia
- Samtan Co., Ltd - South Korea
- Pipit Mutiara Jaya. PT, Indonesia
- Binh Thuan Hamico - Vietnam
- Medco Energi Mining Internasional
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Kobexindo Tractors - Indoneisa
- Coal and Oil Company - UAE
- Krishnapatnam Port Company Ltd. - India
- Maharashtra Electricity Regulatory Commission - India
- Global Coal Blending Company Limited - Australia
- Minerals Council of Australia
- Leighton Contractors Pty Ltd - Australia
- Grasim Industreis Ltd - India
- Meenaskhi Energy Private Limited - India
- Toyota Tsusho Corporation, Japan
- Essar Steel Hazira Ltd - India
- Timah Investasi Mineral - Indoneisa
- Xindia Steels Limited - India
- Petron Corporation, Philippines
- Cement Manufacturers Association - India
- Mjunction Services Limited - India
- Indo Tambangraya Megah - Indonesia
- SMG Consultants - Indonesia
- Energy Link Ltd, New Zealand
- Bukit Baiduri Energy - Indonesia
- Kapuas Tunggal Persada - Indonesia
- Thai Mozambique Logistica
- Pendopo Energi Batubara - Indonesia
- Rio Tinto Coal - Australia
- Electricity Generating Authority of Thailand
- Salva Resources Pvt Ltd - India
- Parliament of New Zealand
- Orica Australia Pty. Ltd.
- Electricity Authority, New Zealand
- GVK Power & Infra Limited - India
- Cigading International Bulk Terminal - Indonesia
- Bahari Cakrawala Sebuku - Indonesia
- Straits Asia Resources Limited - Singapore
- International Coal Ventures Pvt Ltd - India
- Wilmar Investment Holdings
- Holcim Trading Pte Ltd - Singapore
- Miang Besar Coal Terminal - Indonesia
- Madhucon Powers Ltd - India
- Bank of Tokyo Mitsubishi UFJ Ltd
- Sojitz Corporation - Japan
- Carbofer General Trading SA - India
- Coastal Gujarat Power Limited - India
- Semirara Mining and Power Corporation, Philippines
- SMC Global Power, Philippines
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Jindal Steel & Power Ltd - India
- Vijayanagar Sugar Pvt Ltd - India
- Alfred C Toepfer International GmbH - Germany
- Ceylon Electricity Board - Sri Lanka
- Indian Energy Exchange, India
- Offshore Bulk Terminal Pte Ltd, Singapore
- Georgia Ports Authority, United States
- Banpu Public Company Limited - Thailand
- Indogreen Group - Indonesia
- Altura Mining Limited, Indonesia
- PNOC Exploration Corporation - Philippines
- Africa Commodities Group - South Africa
- Eastern Energy - Thailand
- Iligan Light & Power Inc, Philippines
- Bangladesh Power Developement Board
- South Luzon Thermal Energy Corporation
- Indian Oil Corporation Limited
- Ambuja Cements Ltd - India
- Power Finance Corporation Ltd., India
- LBH Netherlands Bv - Netherlands
- Anglo American - United Kingdom
- Ministry of Finance - Indonesia
- India Bulls Power Limited - India
- Mercuria Energy - Indonesia
- Singapore Mercantile Exchange
- Port Waratah Coal Services - Australia
- Tamil Nadu electricity Board
- Meralco Power Generation, Philippines
- Jorong Barutama Greston.PT - Indonesia
- Chettinad Cement Corporation Ltd - India
- Eastern Coal Council - USA
- PowerSource Philippines DevCo
- CNBM International Corporation - China
- GMR Energy Limited - India
- Deloitte Consulting - India
- Marubeni Corporation - India
- Edison Trading Spa - Italy
- Maheswari Brothers Coal Limited - India
- Trasteel International SA, Italy
- McConnell Dowell - Australia
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- The Treasury - Australian Government
- Kalimantan Lumbung Energi - Indonesia
- GN Power Mariveles Coal Plant, Philippines
- Sindya Power Generating Company Private Ltd
- Merrill Lynch Commodities Europe
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Karaikal Port Pvt Ltd - India
- New Zealand Coal & Carbon
- Baramulti Group, Indonesia
- Asmin Koalindo Tuhup - Indonesia
- Vedanta Resources Plc - India
- London Commodity Brokers - England
- San Jose City I Power Corp, Philippines
- Dalmia Cement Bharat India
- Ind-Barath Power Infra Limited - India
- Mercator Lines Limited - India
- Sakthi Sugars Limited - India
- Kaltim Prima Coal - Indonesia
- Indonesian Coal Mining Association
- Oldendorff Carriers - Singapore
- Independent Power Producers Association of India
- Therma Luzon, Inc, Philippines
- Heidelberg Cement - Germany
- Simpson Spence & Young - Indonesia
- ASAPP Information Group - India
- OPG Power Generation Pvt Ltd - India
- Coalindo Energy - Indonesia
- Uttam Galva Steels Limited - India
- Star Paper Mills Limited - India
- The State Trading Corporation of India Ltd
- Lanco Infratech Ltd - India
- Sree Jayajothi Cements Limited - India
- Bhushan Steel Limited - India
- Gujarat Mineral Development Corp Ltd - India
- VISA Power Limited - India
- Sarangani Energy Corporation, Philippines
- Larsen & Toubro Limited - India
- Planning Commission, India
- Commonwealth Bank - Australia
- Ministry of Transport, Egypt
- Central Java Power - Indonesia
- Borneo Indobara - Indonesia
- Energy Development Corp, Philippines
- TeaM Sual Corporation - Philippines
- Kumho Petrochemical, South Korea
- Aboitiz Power Corporation - Philippines
- Bayan Resources Tbk. - Indonesia
- Neyveli Lignite Corporation Ltd, - India
- Wood Mackenzie - Singapore
- Australian Commodity Traders Exchange
- Bharathi Cement Corporation - India
- Jaiprakash Power Ventures ltd
- Sinarmas Energy and Mining - Indonesia
- Malabar Cements Ltd - India
- Vizag Seaport Private Limited - India
- Intertek Mineral Services - Indonesia
- Tata Chemicals Ltd - India
- Central Electricity Authority - India
- Global Green Power PLC Corporation, Philippines
- Kohat Cement Company Ltd. - Pakistan
- Rashtriya Ispat Nigam Limited - India
- Petrochimia International Co. Ltd.- Taiwan
- Manunggal Multi Energi - Indonesia
- Gujarat Sidhee Cement - India
- Riau Bara Harum - Indonesia
- Goldman Sachs - Singapore
- Formosa Plastics Group - Taiwan
- Orica Mining Services - Indonesia
- White Energy Company Limited
- IHS Mccloskey Coal Group - USA
- Renaissance Capital - South Africa
- GAC Shipping (India) Pvt Ltd
- Chamber of Mines of South Africa
- Gujarat Electricity Regulatory Commission - India
- AsiaOL BioFuels Corp., Philippines
- Bhatia International Limited - India
- The University of Queensland
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Antam Resourcindo - Indonesia
- Mintek Dendrill Indonesia
- Makarim & Taira - Indonesia
- Billiton Holdings Pty Ltd - Australia
- Videocon Industries ltd - India
- Globalindo Alam Lestari - Indonesia
- Directorate General of MIneral and Coal - Indonesia
- Kideco Jaya Agung - Indonesia
- Metalloyd Limited - United Kingdom
- SN Aboitiz Power Inc, Philippines
- Interocean Group of Companies - India
- Standard Chartered Bank - UAE
- Karbindo Abesyapradhi - Indoneisa
- Agrawal Coal Company - India
- ICICI Bank Limited - India
- Sical Logistics Limited - India
- Ministry of Mines - Canada
- European Bulk Services B.V. - Netherlands
- PetroVietnam Power Coal Import and Supply Company
- TNB Fuel Sdn Bhd - Malaysia
- Kepco SPC Power Corporation, Philippines
- Romanian Commodities Exchange
- Barasentosa Lestari - Indonesia
- Australian Coal Association
- Posco Energy - South Korea
- Kartika Selabumi Mining - Indonesia
- Semirara Mining Corp, Philippines
- Global Business Power Corporation, Philippines
- CIMB Investment Bank - Malaysia
- PTC India Limited - India
- Economic Council, Georgia
- Aditya Birla Group - India
- Bukit Makmur.PT - Indonesia
- Siam City Cement - Thailand
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