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