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