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