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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, 08 October 18
KOMIPO INVITES BIDS FOR 520,000 TONS OF COLOMBIAN ORIGIN OF 5,700 NAR COAL
COALspot.com: South Korea state-owned utility Korea Midland Power (KOMIPO) issued a tender for 520,000 MT of min. 5700 NAR coal of Colombian origin ...
Sunday, 07 October 18
SUPRAMAX: INDO-INDIA USUAL COAL RUNS WERE COVERED AT US$ 12K - FEARNLEYS
Capesize
Average daily earnings up close to 15 pct in 5 trading days, thus patience finally paying off for owners of the big ships - Chinese play ...
Sunday, 07 October 18
A CASE FOR 20/20 VISION? IMO'S LOW SULPHUR FUEL LIMIT UNDER MARPOL ANNEX VI WHICH COMES INTO FORCE ON 1ST JANUARY 2020
KNOWLEDGE TO ELEVATE
The implementation of the global 0.5% sulphur cap for bunker fuel under MARPOL Annex VI in just under 18 months’ ti ...
Friday, 05 October 18
COAL PRODUCTION REACHES 64% OF 2018 TARGET : THE JAKARTA POST
National coal production up to August has already reached 311 million tons, or 64 percent of this year's total target of 485 million tons, acco ...
Wednesday, 03 October 18
VALUE OF AUSTRALIAN COAL EXPORTS TIPPED TO DECLINE SHARPLY OVER NEXT 18 MONTHS - THE GUARDIAN
Thermal coal prices forecast to drop 25% and metallurgical coal prices 23% as value of iron ore exports also falls
The value of Aust ...
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- Ministry of Finance - Indonesia
- SMG Consultants - Indonesia
- Mercuria Energy - Indonesia
- CNBM International Corporation - China
- Meralco Power Generation, Philippines
- GMR Energy Limited - India
- The University of Queensland
- Larsen & Toubro Limited - India
- Wood Mackenzie - Singapore
- Straits Asia Resources Limited - Singapore
- Kaltim Prima Coal - Indonesia
- LBH Netherlands Bv - Netherlands
- Sojitz Corporation - Japan
- Commonwealth Bank - Australia
- Chamber of Mines of South Africa
- Madhucon Powers Ltd - India
- Eastern Energy - Thailand
- Vijayanagar Sugar Pvt Ltd - India
- Port Waratah Coal Services - Australia
- Timah Investasi Mineral - Indoneisa
- Thai Mozambique Logistica
- Gujarat Mineral Development Corp Ltd - India
- Kepco SPC Power Corporation, Philippines
- GAC Shipping (India) Pvt Ltd
- San Jose City I Power Corp, Philippines
- Borneo Indobara - Indonesia
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Coal and Oil Company - UAE
- Wilmar Investment Holdings
- Karaikal Port Pvt Ltd - India
- Ministry of Mines - Canada
- Aboitiz Power Corporation - Philippines
- Leighton Contractors Pty Ltd - Australia
- Jaiprakash Power Ventures ltd
- Kobexindo Tractors - Indoneisa
- Maharashtra Electricity Regulatory Commission - India
- Electricity Authority, New Zealand
- Bulk Trading Sa - Switzerland
- Baramulti Group, Indonesia
- Sinarmas Energy and Mining - Indonesia
- Anglo American - United Kingdom
- PNOC Exploration Corporation - Philippines
- Ceylon Electricity Board - Sri Lanka
- Indonesian Coal Mining Association
- Marubeni Corporation - India
- Parry Sugars Refinery, India
- Kartika Selabumi Mining - Indonesia
- Bukit Makmur.PT - Indonesia
- Global Green Power PLC Corporation, Philippines
- Sical Logistics Limited - India
- Sree Jayajothi Cements Limited - India
- Samtan Co., Ltd - South Korea
- IHS Mccloskey Coal Group - USA
- Vizag Seaport Private Limited - India
- Kohat Cement Company Ltd. - Pakistan
- Jindal Steel & Power Ltd - India
- Attock Cement Pakistan Limited
- Australian Commodity Traders Exchange
- Gujarat Electricity Regulatory Commission - India
- Goldman Sachs - Singapore
- MS Steel International - UAE
- PetroVietnam Power Coal Import and Supply Company
- Romanian Commodities Exchange
- Trasteel International SA, Italy
- Gujarat Sidhee Cement - India
- Global Coal Blending Company Limited - Australia
- Kapuas Tunggal Persada - Indonesia
- Minerals Council of Australia
- Singapore Mercantile Exchange
- Semirara Mining Corp, Philippines
- Makarim & Taira - Indonesia
- Bayan Resources Tbk. - Indonesia
- Savvy Resources Ltd - HongKong
- European Bulk Services B.V. - Netherlands
- Maheswari Brothers Coal Limited - India
- SN Aboitiz Power Inc, Philippines
- Posco Energy - South Korea
- Simpson Spence & Young - Indonesia
- Standard Chartered Bank - UAE
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- GN Power Mariveles Coal Plant, Philippines
- Alfred C Toepfer International GmbH - Germany
- Power Finance Corporation Ltd., India
- Kalimantan Lumbung Energi - Indonesia
- ASAPP Information Group - India
- Semirara Mining and Power Corporation, Philippines
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Indo Tambangraya Megah - Indonesia
- Directorate Of Revenue Intelligence - India
- Metalloyd Limited - United Kingdom
- Billiton Holdings Pty Ltd - Australia
- IEA Clean Coal Centre - UK
- Uttam Galva Steels Limited - India
- Bukit Asam (Persero) Tbk - Indonesia
- Siam City Cement PLC, Thailand
- Ambuja Cements Ltd - India
- Lanco Infratech Ltd - India
- Coastal Gujarat Power Limited - India
- Videocon Industries ltd - India
- Star Paper Mills Limited - India
- Medco Energi Mining Internasional
- TeaM Sual Corporation - Philippines
- Holcim Trading Pte Ltd - Singapore
- Petrochimia International Co. Ltd.- Taiwan
- Indogreen Group - Indonesia
- Therma Luzon, Inc, Philippines
- Mercator Lines Limited - India
- Directorate General of MIneral and Coal - Indonesia
- Bahari Cakrawala Sebuku - Indonesia
- Miang Besar Coal Terminal - Indonesia
- Tamil Nadu electricity Board
- Interocean Group of Companies - India
- Kumho Petrochemical, South Korea
- Bhatia International Limited - India
- Renaissance Capital - South Africa
- Neyveli Lignite Corporation Ltd, - India
- Pendopo Energi Batubara - Indonesia
- Binh Thuan Hamico - Vietnam
- South Luzon Thermal Energy Corporation
- Independent Power Producers Association of India
- Malabar Cements Ltd - India
- Siam City Cement - Thailand
- Africa Commodities Group - South Africa
- Meenaskhi Energy Private Limited - India
- Bhushan Steel Limited - India
- Globalindo Alam Lestari - Indonesia
- White Energy Company Limited
- London Commodity Brokers - England
- Orica Australia Pty. Ltd.
- Central Electricity Authority - India
- Thiess Contractors Indonesia
- Jorong Barutama Greston.PT - Indonesia
- Bhoruka Overseas - Indonesia
- Oldendorff Carriers - Singapore
- Sakthi Sugars Limited - India
- Bangladesh Power Developement Board
- Bharathi Cement Corporation - India
- Bank of Tokyo Mitsubishi UFJ Ltd
- Banpu Public Company Limited - Thailand
- Toyota Tsusho Corporation, Japan
- PTC India Limited - India
- AsiaOL BioFuels Corp., Philippines
- ICICI Bank Limited - India
- Bukit Baiduri Energy - Indonesia
- Indika Energy - Indonesia
- Central Java Power - Indonesia
- Manunggal Multi Energi - Indonesia
- Cigading International Bulk Terminal - Indonesia
- Riau Bara Harum - Indonesia
- PowerSource Philippines DevCo
- Merrill Lynch Commodities Europe
- Vedanta Resources Plc - India
- TNB Fuel Sdn Bhd - Malaysia
- Latin American Coal - Colombia
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- CIMB Investment Bank - Malaysia
- Petron Corporation, Philippines
- McConnell Dowell - Australia
- Grasim Industreis Ltd - India
- Salva Resources Pvt Ltd - India
- Indian Oil Corporation Limited
- Dalmia Cement Bharat India
- Formosa Plastics Group - Taiwan
- Essar Steel Hazira Ltd - India
- Electricity Generating Authority of Thailand
- Mjunction Services Limited - India
- Mintek Dendrill Indonesia
- Heidelberg Cement - Germany
- Carbofer General Trading SA - India
- Iligan Light & Power Inc, Philippines
- Ministry of Transport, Egypt
- New Zealand Coal & Carbon
- Agrawal Coal Company - India
- Australian Coal Association
- Coalindo Energy - Indonesia
- Antam Resourcindo - Indonesia
- Cement Manufacturers Association - India
- GVK Power & Infra Limited - India
- Eastern Coal Council - USA
- Sarangani Energy Corporation, Philippines
- Offshore Bulk Terminal Pte Ltd, Singapore
- Parliament of New Zealand
- Barasentosa Lestari - Indonesia
- India Bulls Power Limited - India
- Rio Tinto Coal - Australia
- Chettinad Cement Corporation Ltd - India
- VISA Power Limited - India
- Ind-Barath Power Infra Limited - India
- OPG Power Generation Pvt Ltd - India
- Economic Council, Georgia
- Rashtriya Ispat Nigam Limited - India
- Orica Mining Services - Indonesia
- Sindya Power Generating Company Private Ltd
- Xindia Steels Limited - India
- Global Business Power Corporation, Philippines
- Karbindo Abesyapradhi - Indoneisa
- Krishnapatnam Port Company Ltd. - India
- Intertek Mineral Services - Indonesia
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Pipit Mutiara Jaya. PT, Indonesia
- Altura Mining Limited, Indonesia
- SMC Global Power, Philippines
- Energy Link Ltd, New Zealand
- Edison Trading Spa - Italy
- Asmin Koalindo Tuhup - Indonesia
- Kideco Jaya Agung - Indonesia
- Energy Development Corp, Philippines
- Tata Chemicals Ltd - India
- The State Trading Corporation of India Ltd
- Georgia Ports Authority, United States
- Indian Energy Exchange, India
- The Treasury - Australian Government
- Planning Commission, India
- Deloitte Consulting - India
- International Coal Ventures Pvt Ltd - India
- Price Waterhouse Coopers - Russia
- Aditya Birla Group - India
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