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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, 16 October 18
A PRACTICAL OVERVIEW OF THE IMO 2020 SULPHUR CAP - CLYDE&CO
KNOWLEDGE TO ELEVATE
With less than eighteen months before Regulation 14.1.3 of Annex VI of the MARPOL Convention comes into effect, there are ...
Saturday, 13 October 18
SUPRAMAX: SIGNIFICANT ACTIVITY IN THE INDIAN OCEAN WAS EVIDENT AND RATES JUMPED - BALTIC BRIEFING
Capesize
A sharp reversal of fortunes for the big ships as the week closed after a depressed beginning. To start with drops were sudden, with t ...
Wednesday, 10 October 18
SHIPPING MARKET INSIGHT - ILIAS M. LALAOUNIS
During the end of last month the BHSI was hovering around 630 points, while the last observed sale on a 10-yr old Japanese Handy was the M/V Van Im ...
Monday, 08 October 18
INDONESIAN THERMAL COAL PRICE REFERENCE FELL 3.74% IN OCTOBER 2018
COALspot.com: The Ministry of Energy and Mineral Resources of the Republic of Indonesia has revised down the benchmark price of Indonesian thermal ...
Monday, 08 October 18
KOMIPO INVITES BIDS FOR 520,000 TONS OF COLOMBIAN ORIGIN OF 5,700 NAR COAL
COALspot.com: South Korea state-owned utility Korea Midland Power (KOMIPO) issued a tender for 520,000 MT of min. 5700 NAR coal of Colombian origin ...
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- The University of Queensland
- Karaikal Port Pvt Ltd - India
- Ceylon Electricity Board - Sri Lanka
- GVK Power & Infra Limited - India
- Kepco SPC Power Corporation, Philippines
- PTC India Limited - India
- Chamber of Mines of South Africa
- Vizag Seaport Private Limited - India
- Intertek Mineral Services - Indonesia
- Cement Manufacturers Association - India
- Ambuja Cements Ltd - India
- Directorate General of MIneral and Coal - Indonesia
- Power Finance Corporation Ltd., India
- White Energy Company Limited
- Oldendorff Carriers - Singapore
- Directorate Of Revenue Intelligence - India
- Bharathi Cement Corporation - India
- Coastal Gujarat Power Limited - India
- Baramulti Group, Indonesia
- Jindal Steel & Power Ltd - India
- Singapore Mercantile Exchange
- Africa Commodities Group - South Africa
- Eastern Coal Council - USA
- Sinarmas Energy and Mining - Indonesia
- Samtan Co., Ltd - South Korea
- Mercator Lines Limited - India
- Coalindo Energy - Indonesia
- Binh Thuan Hamico - Vietnam
- Iligan Light & Power Inc, Philippines
- Port Waratah Coal Services - Australia
- Ind-Barath Power Infra Limited - India
- McConnell Dowell - Australia
- India Bulls Power Limited - India
- Uttam Galva Steels Limited - India
- Grasim Industreis Ltd - India
- Standard Chartered Bank - UAE
- Romanian Commodities Exchange
- Coal and Oil Company - UAE
- GN Power Mariveles Coal Plant, Philippines
- Gujarat Sidhee Cement - India
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Kartika Selabumi Mining - Indonesia
- Tata Chemicals Ltd - India
- Petron Corporation, Philippines
- Maheswari Brothers Coal Limited - India
- Orica Mining Services - Indonesia
- Kapuas Tunggal Persada - Indonesia
- MS Steel International - UAE
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Indo Tambangraya Megah - Indonesia
- ASAPP Information Group - India
- Ministry of Transport, Egypt
- Australian Commodity Traders Exchange
- Economic Council, Georgia
- Alfred C Toepfer International GmbH - Germany
- Globalindo Alam Lestari - Indonesia
- Dalmia Cement Bharat India
- Australian Coal Association
- Planning Commission, India
- Latin American Coal - Colombia
- Krishnapatnam Port Company Ltd. - India
- Malabar Cements Ltd - India
- Indika Energy - Indonesia
- Agrawal Coal Company - India
- Maharashtra Electricity Regulatory Commission - India
- Interocean Group of Companies - India
- Metalloyd Limited - United Kingdom
- SMG Consultants - Indonesia
- Medco Energi Mining Internasional
- Energy Link Ltd, New Zealand
- European Bulk Services B.V. - Netherlands
- CNBM International Corporation - China
- ICICI Bank Limited - India
- Wood Mackenzie - Singapore
- Bhoruka Overseas - Indonesia
- Merrill Lynch Commodities Europe
- PetroVietnam Power Coal Import and Supply Company
- Deloitte Consulting - India
- Global Green Power PLC Corporation, Philippines
- Xindia Steels Limited - India
- Orica Australia Pty. Ltd.
- PNOC Exploration Corporation - Philippines
- Renaissance Capital - South Africa
- Antam Resourcindo - Indonesia
- Siam City Cement - Thailand
- Vijayanagar Sugar Pvt Ltd - India
- Banpu Public Company Limited - Thailand
- Sarangani Energy Corporation, Philippines
- Tamil Nadu electricity Board
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Makarim & Taira - Indonesia
- TeaM Sual Corporation - Philippines
- Bulk Trading Sa - Switzerland
- Kalimantan Lumbung Energi - Indonesia
- Straits Asia Resources Limited - Singapore
- Edison Trading Spa - Italy
- Electricity Authority, New Zealand
- Borneo Indobara - Indonesia
- Barasentosa Lestari - Indonesia
- Ministry of Finance - Indonesia
- Sojitz Corporation - Japan
- Rio Tinto Coal - Australia
- Miang Besar Coal Terminal - Indonesia
- Posco Energy - South Korea
- Minerals Council of Australia
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Timah Investasi Mineral - Indoneisa
- Siam City Cement PLC, Thailand
- Karbindo Abesyapradhi - Indoneisa
- Attock Cement Pakistan Limited
- Vedanta Resources Plc - India
- Bhushan Steel Limited - India
- LBH Netherlands Bv - Netherlands
- Indian Energy Exchange, India
- Parliament of New Zealand
- Bukit Baiduri Energy - Indonesia
- Riau Bara Harum - Indonesia
- Gujarat Electricity Regulatory Commission - India
- Electricity Generating Authority of Thailand
- Semirara Mining Corp, Philippines
- Thai Mozambique Logistica
- SN Aboitiz Power Inc, Philippines
- South Luzon Thermal Energy Corporation
- Billiton Holdings Pty Ltd - Australia
- IHS Mccloskey Coal Group - USA
- OPG Power Generation Pvt Ltd - India
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Bukit Makmur.PT - Indonesia
- Neyveli Lignite Corporation Ltd, - India
- IEA Clean Coal Centre - UK
- Trasteel International SA, Italy
- Mintek Dendrill Indonesia
- Carbofer General Trading SA - India
- The Treasury - Australian Government
- Pendopo Energi Batubara - Indonesia
- Lanco Infratech Ltd - India
- Star Paper Mills Limited - India
- Therma Luzon, Inc, Philippines
- Kideco Jaya Agung - Indonesia
- Sindya Power Generating Company Private Ltd
- Manunggal Multi Energi - Indonesia
- New Zealand Coal & Carbon
- Kohat Cement Company Ltd. - Pakistan
- Goldman Sachs - Singapore
- Indonesian Coal Mining Association
- Kobexindo Tractors - Indoneisa
- Salva Resources Pvt Ltd - India
- Offshore Bulk Terminal Pte Ltd, Singapore
- Ministry of Mines - Canada
- Parry Sugars Refinery, India
- Savvy Resources Ltd - HongKong
- Global Business Power Corporation, Philippines
- CIMB Investment Bank - Malaysia
- Kaltim Prima Coal - Indonesia
- Bukit Asam (Persero) Tbk - Indonesia
- Price Waterhouse Coopers - Russia
- Asmin Koalindo Tuhup - Indonesia
- San Jose City I Power Corp, Philippines
- Simpson Spence & Young - Indonesia
- Sree Jayajothi Cements Limited - India
- Bangladesh Power Developement Board
- Bhatia International Limited - India
- Heidelberg Cement - Germany
- Essar Steel Hazira Ltd - India
- Central Electricity Authority - India
- Mercuria Energy - Indonesia
- Chettinad Cement Corporation Ltd - India
- Eastern Energy - Thailand
- Thiess Contractors Indonesia
- Sical Logistics Limited - India
- Aditya Birla Group - India
- SMC Global Power, Philippines
- The State Trading Corporation of India Ltd
- Semirara Mining and Power Corporation, Philippines
- Bank of Tokyo Mitsubishi UFJ Ltd
- Meralco Power Generation, Philippines
- Holcim Trading Pte Ltd - Singapore
- Georgia Ports Authority, United States
- Sakthi Sugars Limited - India
- Wilmar Investment Holdings
- Global Coal Blending Company Limited - Australia
- Pipit Mutiara Jaya. PT, Indonesia
- Bahari Cakrawala Sebuku - Indonesia
- Mjunction Services Limited - India
- Toyota Tsusho Corporation, Japan
- Larsen & Toubro Limited - India
- Central Java Power - Indonesia
- Commonwealth Bank - Australia
- Jorong Barutama Greston.PT - Indonesia
- Videocon Industries ltd - India
- Indogreen Group - Indonesia
- International Coal Ventures Pvt Ltd - India
- Leighton Contractors Pty Ltd - Australia
- Meenaskhi Energy Private Limited - India
- GMR Energy Limited - India
- Altura Mining Limited, Indonesia
- Energy Development Corp, Philippines
- Petrochimia International Co. Ltd.- Taiwan
- Anglo American - United Kingdom
- AsiaOL BioFuels Corp., Philippines
- Aboitiz Power Corporation - Philippines
- Madhucon Powers Ltd - India
- VISA Power Limited - India
- Rashtriya Ispat Nigam Limited - India
- Gujarat Mineral Development Corp Ltd - India
- Formosa Plastics Group - Taiwan
- Kumho Petrochemical, South Korea
- PowerSource Philippines DevCo
- TNB Fuel Sdn Bhd - Malaysia
- Bayan Resources Tbk. - Indonesia
- London Commodity Brokers - England
- Marubeni Corporation - India
- Independent Power Producers Association of India
- GAC Shipping (India) Pvt Ltd
- Indian Oil Corporation Limited
- Cigading International Bulk Terminal - Indonesia
- Jaiprakash Power Ventures ltd
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