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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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Friday, 02 November 18
CHINA: COAL CONSUMPTION POSTS STRONG GROWTH ON BACK OF POWER GENERATION DEMAND - CHINA DAILY
China’s energy consumption experienced continuous rebound during the first three quarters in 2018, National Energy Administration announced o ...
Thursday, 01 November 18
IMO 2020 - EXPLORING THE OPTION OF SOX SCRUBBERS - SIDDHARTH MAHAJAN, GARD
KNOWLEDGE TO ELEVATE
There are four possible methods of compliance:
1.use VLSFO (very low Sulphur oil) or blends;
2,use dis ...
Wednesday, 31 October 18
INDIA: COAL IMPORTS SURGE ON DOMESTIC SHORT SUPPLY - HINDU
Shortage of thermal coal supply in India has pushed imports up to 85 million tonnes (mt) in the first half of the current fiscal compared to 75 mt ...
Wednesday, 31 October 18
SHIPPING MARKET INSIGHT - APOSTOLOS ROMPOPOULOS
Since the IMO’s 2020 global cap on sulphur in marine fuels is coming into force, ship-owners have to decide whether they will operate using e ...
Monday, 29 October 18
IMPLEMENTATION OF SULPHUR 2020 LIMIT - CARRIAGE BAN ADOPTED - IMO
An amendment to support consistent implementation of the forthcoming 0.50% limit on sulphur in ships fuel oil was adopted by the International Mari ...
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- Billiton Holdings Pty Ltd - Australia
- Riau Bara Harum - Indonesia
- Indogreen Group - Indonesia
- Grasim Industreis Ltd - India
- Chamber of Mines of South Africa
- Chettinad Cement Corporation Ltd - India
- Aboitiz Power Corporation - Philippines
- Indonesian Coal Mining Association
- Australian Commodity Traders Exchange
- Carbofer General Trading SA - India
- Georgia Ports Authority, United States
- Goldman Sachs - Singapore
- Orica Mining Services - Indonesia
- Bahari Cakrawala Sebuku - Indonesia
- Binh Thuan Hamico - Vietnam
- Attock Cement Pakistan Limited
- Vizag Seaport Private Limited - India
- Iligan Light & Power Inc, Philippines
- IEA Clean Coal Centre - UK
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Kalimantan Lumbung Energi - Indonesia
- Renaissance Capital - South Africa
- McConnell Dowell - Australia
- Agrawal Coal Company - India
- Sindya Power Generating Company Private Ltd
- Altura Mining Limited, Indonesia
- The Treasury - Australian Government
- Larsen & Toubro Limited - India
- Edison Trading Spa - Italy
- Interocean Group of Companies - India
- India Bulls Power Limited - India
- Eastern Energy - Thailand
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Bukit Asam (Persero) Tbk - Indonesia
- Globalindo Alam Lestari - Indonesia
- Samtan Co., Ltd - South Korea
- Sojitz Corporation - Japan
- Leighton Contractors Pty Ltd - Australia
- PetroVietnam Power Coal Import and Supply Company
- Energy Link Ltd, New Zealand
- Uttam Galva Steels Limited - India
- Baramulti Group, Indonesia
- New Zealand Coal & Carbon
- International Coal Ventures Pvt Ltd - India
- Central Electricity Authority - India
- Banpu Public Company Limited - Thailand
- Electricity Authority, New Zealand
- Salva Resources Pvt Ltd - India
- Antam Resourcindo - Indonesia
- PNOC Exploration Corporation - Philippines
- Karaikal Port Pvt Ltd - India
- San Jose City I Power Corp, Philippines
- Central Java Power - Indonesia
- Ministry of Transport, Egypt
- Miang Besar Coal Terminal - Indonesia
- Marubeni Corporation - India
- Oldendorff Carriers - Singapore
- Cigading International Bulk Terminal - Indonesia
- Offshore Bulk Terminal Pte Ltd, Singapore
- White Energy Company Limited
- Bharathi Cement Corporation - India
- Ministry of Mines - Canada
- Videocon Industries ltd - India
- European Bulk Services B.V. - Netherlands
- Anglo American - United Kingdom
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Bhushan Steel Limited - India
- Global Coal Blending Company Limited - Australia
- CIMB Investment Bank - Malaysia
- Holcim Trading Pte Ltd - Singapore
- The University of Queensland
- TNB Fuel Sdn Bhd - Malaysia
- Bhatia International Limited - India
- Indian Oil Corporation Limited
- Xindia Steels Limited - India
- IHS Mccloskey Coal Group - USA
- London Commodity Brokers - England
- Maheswari Brothers Coal Limited - India
- Mintek Dendrill Indonesia
- Asia Pacific Energy Resources Ventures Inc, Philippines
- GMR Energy Limited - India
- MS Steel International - UAE
- Lanco Infratech Ltd - India
- Gujarat Sidhee Cement - India
- Latin American Coal - Colombia
- Heidelberg Cement - Germany
- Therma Luzon, Inc, Philippines
- Global Green Power PLC Corporation, Philippines
- ICICI Bank Limited - India
- Meenaskhi Energy Private Limited - India
- Bayan Resources Tbk. - Indonesia
- Bukit Baiduri Energy - Indonesia
- Power Finance Corporation Ltd., India
- Ind-Barath Power Infra Limited - India
- GN Power Mariveles Coal Plant, Philippines
- Petrochimia International Co. Ltd.- Taiwan
- Meralco Power Generation, Philippines
- Aditya Birla Group - India
- Wilmar Investment Holdings
- Siam City Cement PLC, Thailand
- GVK Power & Infra Limited - India
- Thiess Contractors Indonesia
- Coal and Oil Company - UAE
- Minerals Council of Australia
- Alfred C Toepfer International GmbH - Germany
- Merrill Lynch Commodities Europe
- Kohat Cement Company Ltd. - Pakistan
- Kepco SPC Power Corporation, Philippines
- Madhucon Powers Ltd - India
- Kapuas Tunggal Persada - Indonesia
- LBH Netherlands Bv - Netherlands
- Jorong Barutama Greston.PT - Indonesia
- Simpson Spence & Young - Indonesia
- Tata Chemicals Ltd - India
- Intertek Mineral Services - Indonesia
- Kobexindo Tractors - Indoneisa
- OPG Power Generation Pvt Ltd - India
- Ambuja Cements Ltd - India
- Tamil Nadu electricity Board
- Sakthi Sugars Limited - India
- Sarangani Energy Corporation, Philippines
- Eastern Coal Council - USA
- Planning Commission, India
- Semirara Mining Corp, Philippines
- Ceylon Electricity Board - Sri Lanka
- Indika Energy - Indonesia
- Vedanta Resources Plc - India
- Economic Council, Georgia
- Jindal Steel & Power Ltd - India
- Sical Logistics Limited - India
- Savvy Resources Ltd - HongKong
- Kumho Petrochemical, South Korea
- PTC India Limited - India
- Sinarmas Energy and Mining - Indonesia
- Price Waterhouse Coopers - Russia
- Gujarat Electricity Regulatory Commission - India
- PowerSource Philippines DevCo
- Formosa Plastics Group - Taiwan
- Standard Chartered Bank - UAE
- Pendopo Energi Batubara - Indonesia
- Independent Power Producers Association of India
- Bulk Trading Sa - Switzerland
- Ministry of Finance - Indonesia
- Maharashtra Electricity Regulatory Commission - India
- Bangladesh Power Developement Board
- Karbindo Abesyapradhi - Indoneisa
- GAC Shipping (India) Pvt Ltd
- Rio Tinto Coal - Australia
- Directorate General of MIneral and Coal - Indonesia
- Sree Jayajothi Cements Limited - India
- Africa Commodities Group - South Africa
- Singapore Mercantile Exchange
- Vijayanagar Sugar Pvt Ltd - India
- Commonwealth Bank - Australia
- Kartika Selabumi Mining - Indonesia
- SN Aboitiz Power Inc, Philippines
- Parliament of New Zealand
- Cement Manufacturers Association - India
- Thai Mozambique Logistica
- Mercator Lines Limited - India
- Mercuria Energy - Indonesia
- Coastal Gujarat Power Limited - India
- SMG Consultants - Indonesia
- Malabar Cements Ltd - India
- Indo Tambangraya Megah - Indonesia
- Rashtriya Ispat Nigam Limited - India
- Kaltim Prima Coal - Indonesia
- Star Paper Mills Limited - India
- Asmin Koalindo Tuhup - Indonesia
- Metalloyd Limited - United Kingdom
- VISA Power Limited - India
- The State Trading Corporation of India Ltd
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Essar Steel Hazira Ltd - India
- Barasentosa Lestari - Indonesia
- AsiaOL BioFuels Corp., Philippines
- Bukit Makmur.PT - Indonesia
- Electricity Generating Authority of Thailand
- Romanian Commodities Exchange
- Neyveli Lignite Corporation Ltd, - India
- TeaM Sual Corporation - Philippines
- South Luzon Thermal Energy Corporation
- Siam City Cement - Thailand
- Orica Australia Pty. Ltd.
- SMC Global Power, Philippines
- Port Waratah Coal Services - Australia
- Bhoruka Overseas - Indonesia
- Trasteel International SA, Italy
- Indian Energy Exchange, India
- Straits Asia Resources Limited - Singapore
- Gujarat Mineral Development Corp Ltd - India
- Krishnapatnam Port Company Ltd. - India
- Jaiprakash Power Ventures ltd
- Directorate Of Revenue Intelligence - India
- Bank of Tokyo Mitsubishi UFJ Ltd
- Petron Corporation, Philippines
- Pipit Mutiara Jaya. PT, Indonesia
- Toyota Tsusho Corporation, Japan
- Dalmia Cement Bharat India
- Mjunction Services Limited - India
- Deloitte Consulting - India
- Global Business Power Corporation, Philippines
- Manunggal Multi Energi - Indonesia
- Wood Mackenzie - Singapore
- Coalindo Energy - Indonesia
- Borneo Indobara - Indonesia
- Timah Investasi Mineral - Indoneisa
- Semirara Mining and Power Corporation, Philippines
- Posco Energy - South Korea
- Parry Sugars Refinery, India
- CNBM International Corporation - China
- Makarim & Taira - Indonesia
- Australian Coal Association
- ASAPP Information Group - India
- Kideco Jaya Agung - Indonesia
- Medco Energi Mining Internasional
- Energy Development Corp, Philippines
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