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Monday, 05 November 18
TIGHTER FUEL RULES COULD RAISE SHIPOWNERS' COSTS AND CAPEX - FITCH RATINGS
 More stringent fuel regulations regarding sulphur content could significantly increase global shipping companies’ operating costs and capex needs, Fitch Ratings says. This may negatively affect their credit quality unless they manage to pass these costs to customers. Many shipping companies have started implementing fuel surcharges to recover costs associated with the new sulphur cap regulation, but their ability to sustain these will depend on market fundamentals, which remain challenging.
Competitive dynamics may change in the longer term with companies that are less financially able to absorb additional costs, especially given higher oil prices, withdrawing from the market. Reduced competitive pressures could then support a better supply-demand balance and allow the remaining shipping companies to raise freight rates in a bid to recoup some of the extra costs. The change in shipping fuel consumption could also affect refineries.
International Maritime Organization rules requiring ships to use fuel with sulphur content no higher than 0.5% (compared with 3.5% currently) come into effect on 1 January 2020. This means that shipping companies need to switch to higher-quality and more expensive marine fuel, use special equipment (“scrubbers”) to reduce sulphur emissions or switch to alternative fuels, such as liquefied natural gas (LNG). The new regulation will apply globally. Sulphur Emission Control Areas were established in a limited number of sea areas in 2005 and the sulphur content limit for fuel in those areas was tightened to 0.1% in 2015.
The global shipping industry fuel cost bill could increase by up to USD60 billion a year as a result of the new rules from 2020 for a total merchant fleet of 60,000 vessels, according to Wood Mackenzie. According to Maersk Line, its additional fuel costs would be over USD2 billion with a cost for the container shipping industry as a whole of up to USD15 billion, based on the difference in price of fuel with 3.5% and 0.5% sulphur content.
Scrubbers could be a viable alternative for some companies, but require several million dollars in upfront investments for each ship. Furthermore, scrubbers’ manufacturing and installing capacity is limited to fitting only about 2,000 scrubbers by 2020, according to Norwegian bank SEB. The LNG option will also require investments to retrofit ship engines and capacity to carry high-volume LNG tanks. In addition, LNG refuelling infrastructure may not be readily available globally.
The impact of the new regulation is unlikely to be uniform across segments. Ship owners that lease out ships with fuel costs borne by the charterer will be significantly less affected than operators that cover the fuel bill themselves if fuel surcharges related to the sulphur cap are not sustained.
If a significant proportion of shipping companies opt for higher-quality, low-sulphur fuel to comply with the regulations, the balance in the oil products market, and therefore refineries, may be affected. The 4 million barrel a day marine fuel market has been absorbing residue from the refining process, so there may be a need for refineries to adjust processes if demand for heavy fuel drops.
Demand for higher-quality fuel could lead to higher prices and widen pricing differentials between low- and high-sulphur products. Refineries with a higher share of middle distillates in their output, which are required to produce low-sulphur marine fuel, will benefit from the change. Low-complexity refineries will be hit and may need to invest in upgrades to shift their output towards middle distillates.
Source: Fitch Ratings
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Thursday, 22 November 18
SHUT OUT OF CHINA, U.S. COAL EXPORTERS FIND FAVOUR IN INDIA, FOR NOW - REUTERS
U.S. coal exporters have effectively lost a promising market in China since the imposition of tariffs as part of the ongoing trade dispute, but so ...
Wednesday, 21 November 18
SHIPPING MARKET INSIGHT - DIMITRIS KOURTESIS
Halfway through the fourth and last quarter of the year, we spot a significant change in freight rates for tankers trading dirty, as well as on the ...
Tuesday, 20 November 18
FREIGHT RATES IN THE CRUDE OIL MARKET HAVE ALREADY PICKED UP OVER THE PAST COUPLE OF WEEKS - YIANNIS VAMVAKAS
Current geopolitical developments between Iran and the US, which have led the latter to re-impose its sanctions, have significantly affected oil pr ...
Tuesday, 20 November 18
GOLDEN ENERGY AND RESOURCES LEADS A$249M BID FOR AUSTRALIA-LISTED STANMORE COAL - THE STRAITS TIMES
Singapore-listed Golden Energy and Resources (GEAR) is leading deals worth up to A$249 million (S$250 million) to acquire Australia-listed Stanmore ...
Monday, 19 November 18
INDONESIA'S LEADING EIGHT COAL MINER'S COAL MINING CONTRACTS ARE EXPECTED TO EXPIRE BETWEEN YEAR 2019 - 2025
The Ministry of Energy and Mineral Resources (ESDM) said, eight Coal Contract of Works (CCoW) will expected to expire between 2019 to 2026, Liputan ...
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- TNB Fuel Sdn Bhd - Malaysia
- Indika Energy - Indonesia
- Electricity Generating Authority of Thailand
- GVK Power & Infra Limited - India
- Sojitz Corporation - Japan
- Vijayanagar Sugar Pvt Ltd - India
- Ind-Barath Power Infra Limited - India
- Ministry of Mines - Canada
- Bharathi Cement Corporation - India
- Globalindo Alam Lestari - Indonesia
- Larsen & Toubro Limited - India
- Semirara Mining and Power Corporation, Philippines
- Sree Jayajothi Cements Limited - India
- Gujarat Sidhee Cement - India
- Global Business Power Corporation, Philippines
- Baramulti Group, Indonesia
- Samtan Co., Ltd - South Korea
- Timah Investasi Mineral - Indoneisa
- Deloitte Consulting - India
- Energy Development Corp, Philippines
- Petrochimia International Co. Ltd.- Taiwan
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Medco Energi Mining Internasional
- Binh Thuan Hamico - Vietnam
- New Zealand Coal & Carbon
- White Energy Company Limited
- Asmin Koalindo Tuhup - Indonesia
- Siam City Cement - Thailand
- Sindya Power Generating Company Private Ltd
- Siam City Cement PLC, Thailand
- Vedanta Resources Plc - India
- OPG Power Generation Pvt Ltd - India
- TeaM Sual Corporation - Philippines
- Standard Chartered Bank - UAE
- Salva Resources Pvt Ltd - India
- South Luzon Thermal Energy Corporation
- Singapore Mercantile Exchange
- Iligan Light & Power Inc, Philippines
- Port Waratah Coal Services - Australia
- Price Waterhouse Coopers - Russia
- The University of Queensland
- MS Steel International - UAE
- Bhatia International Limited - India
- Bhushan Steel Limited - India
- Indian Oil Corporation Limited
- Semirara Mining Corp, Philippines
- Parry Sugars Refinery, India
- Grasim Industreis Ltd - India
- Indian Energy Exchange, India
- VISA Power Limited - India
- Chettinad Cement Corporation Ltd - India
- Power Finance Corporation Ltd., India
- International Coal Ventures Pvt Ltd - India
- ICICI Bank Limited - India
- The State Trading Corporation of India Ltd
- Bulk Trading Sa - Switzerland
- PNOC Exploration Corporation - Philippines
- Kalimantan Lumbung Energi - Indonesia
- Metalloyd Limited - United Kingdom
- Banpu Public Company Limited - Thailand
- Sinarmas Energy and Mining - Indonesia
- Electricity Authority, New Zealand
- Karaikal Port Pvt Ltd - India
- Ministry of Finance - Indonesia
- Aditya Birla Group - India
- Borneo Indobara - Indonesia
- Orica Mining Services - Indonesia
- Wilmar Investment Holdings
- Miang Besar Coal Terminal - Indonesia
- Savvy Resources Ltd - HongKong
- Xindia Steels Limited - India
- Mjunction Services Limited - India
- Manunggal Multi Energi - Indonesia
- Straits Asia Resources Limited - Singapore
- Barasentosa Lestari - Indonesia
- Central Java Power - Indonesia
- Chamber of Mines of South Africa
- Gujarat Mineral Development Corp Ltd - India
- Oldendorff Carriers - Singapore
- Holcim Trading Pte Ltd - Singapore
- Alfred C Toepfer International GmbH - Germany
- Pendopo Energi Batubara - Indonesia
- Simpson Spence & Young - Indonesia
- Bahari Cakrawala Sebuku - Indonesia
- Independent Power Producers Association of India
- Sarangani Energy Corporation, Philippines
- Intertek Mineral Services - Indonesia
- GN Power Mariveles Coal Plant, Philippines
- Petron Corporation, Philippines
- Krishnapatnam Port Company Ltd. - India
- Ambuja Cements Ltd - India
- Jorong Barutama Greston.PT - Indonesia
- Therma Luzon, Inc, Philippines
- Planning Commission, India
- PTC India Limited - India
- Posco Energy - South Korea
- India Bulls Power Limited - India
- Renaissance Capital - South Africa
- Parliament of New Zealand
- Offshore Bulk Terminal Pte Ltd, Singapore
- Formosa Plastics Group - Taiwan
- Directorate Of Revenue Intelligence - India
- European Bulk Services B.V. - Netherlands
- Cigading International Bulk Terminal - Indonesia
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Africa Commodities Group - South Africa
- SN Aboitiz Power Inc, Philippines
- Makarim & Taira - Indonesia
- Coalindo Energy - Indonesia
- London Commodity Brokers - England
- Central Electricity Authority - India
- Jindal Steel & Power Ltd - India
- Meenaskhi Energy Private Limited - India
- Gujarat Electricity Regulatory Commission - India
- GMR Energy Limited - India
- Eastern Energy - Thailand
- Energy Link Ltd, New Zealand
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- PetroVietnam Power Coal Import and Supply Company
- Toyota Tsusho Corporation, Japan
- The Treasury - Australian Government
- Videocon Industries ltd - India
- Coal and Oil Company - UAE
- Heidelberg Cement - Germany
- Pipit Mutiara Jaya. PT, Indonesia
- Romanian Commodities Exchange
- Kideco Jaya Agung - Indonesia
- Bukit Makmur.PT - Indonesia
- Meralco Power Generation, Philippines
- Agrawal Coal Company - India
- Commonwealth Bank - Australia
- Mercator Lines Limited - India
- Kapuas Tunggal Persada - Indonesia
- Dalmia Cement Bharat India
- Vizag Seaport Private Limited - India
- San Jose City I Power Corp, Philippines
- Riau Bara Harum - Indonesia
- Directorate General of MIneral and Coal - Indonesia
- Tamil Nadu electricity Board
- IEA Clean Coal Centre - UK
- ASAPP Information Group - India
- SMG Consultants - Indonesia
- Indo Tambangraya Megah - Indonesia
- PowerSource Philippines DevCo
- Attock Cement Pakistan Limited
- Georgia Ports Authority, United States
- Marubeni Corporation - India
- Ministry of Transport, Egypt
- Merrill Lynch Commodities Europe
- SMC Global Power, Philippines
- Madhucon Powers Ltd - India
- McConnell Dowell - Australia
- Mercuria Energy - Indonesia
- Global Green Power PLC Corporation, Philippines
- Economic Council, Georgia
- Australian Coal Association
- Neyveli Lignite Corporation Ltd, - India
- CIMB Investment Bank - Malaysia
- Karbindo Abesyapradhi - Indoneisa
- Rio Tinto Coal - Australia
- Sical Logistics Limited - India
- Uttam Galva Steels Limited - India
- Maharashtra Electricity Regulatory Commission - India
- Edison Trading Spa - Italy
- Interocean Group of Companies - India
- Leighton Contractors Pty Ltd - Australia
- Thiess Contractors Indonesia
- LBH Netherlands Bv - Netherlands
- Rashtriya Ispat Nigam Limited - India
- Trasteel International SA, Italy
- Jaiprakash Power Ventures ltd
- Orica Australia Pty. Ltd.
- GAC Shipping (India) Pvt Ltd
- Indogreen Group - Indonesia
- Altura Mining Limited, Indonesia
- Cement Manufacturers Association - India
- Lanco Infratech Ltd - India
- Global Coal Blending Company Limited - Australia
- Kartika Selabumi Mining - Indonesia
- Bukit Baiduri Energy - Indonesia
- Essar Steel Hazira Ltd - India
- CNBM International Corporation - China
- Antam Resourcindo - Indonesia
- Kepco SPC Power Corporation, Philippines
- Tata Chemicals Ltd - India
- Wood Mackenzie - Singapore
- Australian Commodity Traders Exchange
- Bank of Tokyo Mitsubishi UFJ Ltd
- Maheswari Brothers Coal Limited - India
- Bayan Resources Tbk. - Indonesia
- Latin American Coal - Colombia
- Kobexindo Tractors - Indoneisa
- Kumho Petrochemical, South Korea
- IHS Mccloskey Coal Group - USA
- Kaltim Prima Coal - Indonesia
- Sakthi Sugars Limited - India
- Anglo American - United Kingdom
- Mintek Dendrill Indonesia
- Minerals Council of Australia
- Kohat Cement Company Ltd. - Pakistan
- Indonesian Coal Mining Association
- Aboitiz Power Corporation - Philippines
- Billiton Holdings Pty Ltd - Australia
- Bukit Asam (Persero) Tbk - Indonesia
- Goldman Sachs - Singapore
- Malabar Cements Ltd - India
- Coastal Gujarat Power Limited - India
- Carbofer General Trading SA - India
- Eastern Coal Council - USA
- Thai Mozambique Logistica
- Bangladesh Power Developement Board
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Ceylon Electricity Board - Sri Lanka
- Bhoruka Overseas - Indonesia
- Star Paper Mills Limited - India
- AsiaOL BioFuels Corp., Philippines
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
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