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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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Tuesday, 13 November 18
INDIA: POWER DEMAND UP; COAL STOCKS AT MINES AT A 5-YEAR LOW - FINANCIAL EXPRESS
Stocks at Coal India mines plunged to a five-year low of 21 million tonne (mt) in October, as a sudden surge in demand for the fuel from the power ...
Monday, 12 November 18
COAL BUSINESS REMAINS PROSPECTIVE - ANTARA
Coal business happened to be sluggish in the 2012-2015 period because coal prices in the world market fell sharply, but it has begun to crawl up si ...
Monday, 12 November 18
INDONESIA'S HBA ENDS DECLINE IN NOVEMBER
COALspot.com: The Ministry of Energy and Mineral Resources of the Republic of Indonesia has revised down the benchmark price of Indonesian thermal ...
Wednesday, 07 November 18
SHIPPING MARKET INSIGHT - VASILIS MOIRIS
This has been another active week in the second-hand market for both the dry bulk and tanker sectors. Buying interest has recently increased, which ...
Friday, 02 November 18
COAL FETCHES 102% PREMIUM IN E-AUCTION, SURPASSING THE EARLIER HIGHEST OF 95% - FINANCIAL EXPRESS
Coal prices have received a premium of 102% in spot e-auction during September 2018, surpassing the earlier highest of 95% premium during the spot ...
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- Holcim Trading Pte Ltd - Singapore
- Thai Mozambique Logistica
- Kumho Petrochemical, South Korea
- Bhushan Steel Limited - India
- Semirara Mining and Power Corporation, Philippines
- Uttam Galva Steels Limited - India
- Coal and Oil Company - UAE
- Simpson Spence & Young - Indonesia
- Aditya Birla Group - India
- Georgia Ports Authority, United States
- VISA Power Limited - India
- Sree Jayajothi Cements Limited - India
- Parry Sugars Refinery, India
- Indian Oil Corporation Limited
- London Commodity Brokers - England
- Formosa Plastics Group - Taiwan
- Mercuria Energy - Indonesia
- Manunggal Multi Energi - Indonesia
- Kaltim Prima Coal - Indonesia
- Indo Tambangraya Megah - Indonesia
- Posco Energy - South Korea
- Jaiprakash Power Ventures ltd
- Kideco Jaya Agung - Indonesia
- Indogreen Group - Indonesia
- Agrawal Coal Company - India
- Kohat Cement Company Ltd. - Pakistan
- McConnell Dowell - Australia
- Global Green Power PLC Corporation, Philippines
- White Energy Company Limited
- Commonwealth Bank - Australia
- MS Steel International - UAE
- Interocean Group of Companies - India
- Dalmia Cement Bharat India
- Kobexindo Tractors - Indoneisa
- New Zealand Coal & Carbon
- Savvy Resources Ltd - HongKong
- Banpu Public Company Limited - Thailand
- Kapuas Tunggal Persada - Indonesia
- Electricity Generating Authority of Thailand
- International Coal Ventures Pvt Ltd - India
- Bulk Trading Sa - Switzerland
- Minerals Council of Australia
- Chamber of Mines of South Africa
- Australian Commodity Traders Exchange
- Ministry of Mines - Canada
- Indika Energy - Indonesia
- Power Finance Corporation Ltd., India
- Sical Logistics Limited - India
- Gujarat Sidhee Cement - India
- Alfred C Toepfer International GmbH - Germany
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Sinarmas Energy and Mining - Indonesia
- Singapore Mercantile Exchange
- Pipit Mutiara Jaya. PT, Indonesia
- Gujarat Electricity Regulatory Commission - India
- Marubeni Corporation - India
- Central Electricity Authority - India
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Directorate Of Revenue Intelligence - India
- Independent Power Producers Association of India
- Coastal Gujarat Power Limited - India
- Petrochimia International Co. Ltd.- Taiwan
- Larsen & Toubro Limited - India
- SN Aboitiz Power Inc, Philippines
- Gujarat Mineral Development Corp Ltd - India
- Cigading International Bulk Terminal - Indonesia
- PetroVietnam Power Coal Import and Supply Company
- Price Waterhouse Coopers - Russia
- GN Power Mariveles Coal Plant, Philippines
- IHS Mccloskey Coal Group - USA
- Economic Council, Georgia
- Vedanta Resources Plc - India
- Australian Coal Association
- Bayan Resources Tbk. - Indonesia
- Siam City Cement PLC, Thailand
- Tata Chemicals Ltd - India
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Ministry of Finance - Indonesia
- Vizag Seaport Private Limited - India
- Oldendorff Carriers - Singapore
- Cement Manufacturers Association - India
- Anglo American - United Kingdom
- Kalimantan Lumbung Energi - Indonesia
- Bharathi Cement Corporation - India
- Sojitz Corporation - Japan
- Bank of Tokyo Mitsubishi UFJ Ltd
- Straits Asia Resources Limited - Singapore
- Orica Mining Services - Indonesia
- Rio Tinto Coal - Australia
- Billiton Holdings Pty Ltd - Australia
- Ministry of Transport, Egypt
- Xindia Steels Limited - India
- Meenaskhi Energy Private Limited - India
- Makarim & Taira - Indonesia
- Latin American Coal - Colombia
- Energy Link Ltd, New Zealand
- Krishnapatnam Port Company Ltd. - India
- GAC Shipping (India) Pvt Ltd
- Tamil Nadu electricity Board
- Borneo Indobara - Indonesia
- ASAPP Information Group - India
- Aboitiz Power Corporation - Philippines
- The Treasury - Australian Government
- Globalindo Alam Lestari - Indonesia
- Intertek Mineral Services - Indonesia
- Malabar Cements Ltd - India
- Goldman Sachs - Singapore
- Bukit Makmur.PT - Indonesia
- SMG Consultants - Indonesia
- Salva Resources Pvt Ltd - India
- Global Coal Blending Company Limited - Australia
- Parliament of New Zealand
- Mjunction Services Limited - India
- Samtan Co., Ltd - South Korea
- Neyveli Lignite Corporation Ltd, - India
- LBH Netherlands Bv - Netherlands
- Ceylon Electricity Board - Sri Lanka
- Binh Thuan Hamico - Vietnam
- Directorate General of MIneral and Coal - Indonesia
- Mintek Dendrill Indonesia
- Bukit Asam (Persero) Tbk - Indonesia
- Asmin Koalindo Tuhup - Indonesia
- Pendopo Energi Batubara - Indonesia
- Port Waratah Coal Services - Australia
- OPG Power Generation Pvt Ltd - India
- Barasentosa Lestari - Indonesia
- Standard Chartered Bank - UAE
- Maheswari Brothers Coal Limited - India
- Chettinad Cement Corporation Ltd - India
- Antam Resourcindo - Indonesia
- Central Java Power - Indonesia
- Merrill Lynch Commodities Europe
- CNBM International Corporation - China
- IEA Clean Coal Centre - UK
- Energy Development Corp, Philippines
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Timah Investasi Mineral - Indoneisa
- Videocon Industries ltd - India
- Orica Australia Pty. Ltd.
- Sarangani Energy Corporation, Philippines
- Maharashtra Electricity Regulatory Commission - India
- Star Paper Mills Limited - India
- The State Trading Corporation of India Ltd
- Africa Commodities Group - South Africa
- Eastern Coal Council - USA
- Lanco Infratech Ltd - India
- Karaikal Port Pvt Ltd - India
- Jindal Steel & Power Ltd - India
- Planning Commission, India
- Bhoruka Overseas - Indonesia
- Wood Mackenzie - Singapore
- Semirara Mining Corp, Philippines
- AsiaOL BioFuels Corp., Philippines
- Riau Bara Harum - Indonesia
- Meralco Power Generation, Philippines
- Ambuja Cements Ltd - India
- Siam City Cement - Thailand
- Thiess Contractors Indonesia
- Carbofer General Trading SA - India
- Sindya Power Generating Company Private Ltd
- Leighton Contractors Pty Ltd - Australia
- Petron Corporation, Philippines
- Miang Besar Coal Terminal - Indonesia
- Heidelberg Cement - Germany
- Trasteel International SA, Italy
- Grasim Industreis Ltd - India
- Bahari Cakrawala Sebuku - Indonesia
- Bukit Baiduri Energy - Indonesia
- Attock Cement Pakistan Limited
- Vijayanagar Sugar Pvt Ltd - India
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Indonesian Coal Mining Association
- Karbindo Abesyapradhi - Indoneisa
- GVK Power & Infra Limited - India
- CIMB Investment Bank - Malaysia
- Eastern Energy - Thailand
- Bhatia International Limited - India
- Essar Steel Hazira Ltd - India
- Wilmar Investment Holdings
- Indian Energy Exchange, India
- Electricity Authority, New Zealand
- Offshore Bulk Terminal Pte Ltd, Singapore
- Metalloyd Limited - United Kingdom
- GMR Energy Limited - India
- Rashtriya Ispat Nigam Limited - India
- Therma Luzon, Inc, Philippines
- San Jose City I Power Corp, Philippines
- PNOC Exploration Corporation - Philippines
- ICICI Bank Limited - India
- Deloitte Consulting - India
- India Bulls Power Limited - India
- TeaM Sual Corporation - Philippines
- Global Business Power Corporation, Philippines
- Medco Energi Mining Internasional
- Altura Mining Limited, Indonesia
- Toyota Tsusho Corporation, Japan
- The University of Queensland
- Kartika Selabumi Mining - Indonesia
- Baramulti Group, Indonesia
- TNB Fuel Sdn Bhd - Malaysia
- Madhucon Powers Ltd - India
- Mercator Lines Limited - India
- Coalindo Energy - Indonesia
- Edison Trading Spa - Italy
- Kepco SPC Power Corporation, Philippines
- PTC India Limited - India
- PowerSource Philippines DevCo
- Sakthi Sugars Limited - India
- Iligan Light & Power Inc, Philippines
- Romanian Commodities Exchange
- SMC Global Power, Philippines
- Ind-Barath Power Infra Limited - India
- Bangladesh Power Developement Board
- South Luzon Thermal Energy Corporation
- Jorong Barutama Greston.PT - Indonesia
- European Bulk Services B.V. - Netherlands
- Renaissance Capital - South Africa
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