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