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Wednesday, 27 February 19
SHIPPING MARKET INSIGHT - INTERMODAL
 With the IMO 2020 approaching, it becomes challenging for the market to accurately explore the run-up to the deadline given that marine fuel-oil of 0.5% sulphur content does not yet exist physically nor financially. Thus, there is technical and financial planning to be involved and as reported the current global crude streams enable the production of about 15mill bl/d of final 0.5% sulphur content marine fuel if refineries maximize output. The market is currently using Gasoil 0.1% sulphur content price as a proxy for the upcoming 0.5%S MFO. Accordingly, it is estimated that between 2020 and 2022 it will trade at USD 90/ton discount to the Gasoil 0.1% price. Later, it is projected that the 0.5% MFO price will settle closer to the HFO 3.5% price, at a USD 90/ton premium to HFO 3.5%.
As seen, many ship-owners have rushed to order scrubbers and as reported in 2020 there will be more than 1600 scrubbers installed and on order. It is projected that between 2021 and 2022 demand will be much higher always subject to the order books. As discussed in 2020, the global bunker oil consumption will be mainly MFO of 0.5% sulphur content and almost 95% of vessels will not have scrubbers fitted. Unavoidably, in order for refineries to produce MFO of 0.5% sulphur content there will be a great availability of HFO 3.5% fuel. This is because high sulphur residue fuel is a by product in the production of MFO 0.5%. Rationally HFO 3.5% will be available in larger ports and most probably will be utilized by container vessels in certain routes or product carriers that will trade between refineries. Therefore, for these routes and specific trade, scrubber installation will certainly advance. In general, it is forecasted that more than 2.0m bl/d of HFO 3.5% surplus will be produced in 2020 and the question remains where and how this amount of fuel will be stored. The increased inventory will lead to HFO 3.5% prices being low for some time until the supply/demand balances and thus prices will be restored in the later years.
Furthermore, as the new fuel is yet unknown there is a discussion by ship-owners whether blending MFO 0.5% from various suppliers will be stable and not likely to damage engines. Overall, most shippers are installing scrubbers to part of their fleet to build up step by step knowledge. Scrubber installation has led many to believe that “early movers will make a scrubber profit” while “late movers will make a scrubber saving”. Last but not least, many ship-owners that have their vessels on long time charters have considered the option to include a clause in their charter parties, for Charterers requesting a scrubber vessel, to pay for it through hire agreement.
The next couple of years will not be short of interesting developments for sure. The second half of 2019 and closer to 2020 will lead to more confident conclusions towards the MFO 0.5%, Gasoil 0.1% and HFO 3.5% price spreads with the maritime industry’s bunker fuel shift. It is expected that concerns related to volatility of the MFO 0.5% product will progressively dissolve as more users will be able to test it during 2019 leading to the understanding that it will not be a gasoil-based product but instead a fuel-based bunker. Finally, it is expected that scrubber installation for bigger vessels will be hurried while for fleets with smaller vessels it will take longer. The main question to be answered is whether scrubber installation will generate profits or just savings.
By Katerina Resti
Tanker Chartering
Compiled by:
Intermodal Research & Valuations
Analysts:
Ms Eva Tzima
George Panagopoulos
Disclaimer and legal disclosure: For any further queries please do not hesitate to contact our Research & Valuations Department. The information contained in this report has been obtained from various sources, as reported in the market. Intermodal Shipbrokers Co. believes such information to be factual and reliable without making guarantees regarding its accuracy or completeness. Whilst every care has been taken in the production of the above review, no liability can be accepted for any loss or damage incurred in any way whatsoever by any person who may seek to rely on the information and views contained in this material. This report is being produced for the internal use of the intended recipients only and no reproducing is allowed, without the prior written authorization of Intermodal Shipbrokers Co.
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Wednesday, 17 April 19
ONCE AGAIN WE FACED WITH THE SITUATION OF THE DRY BALTIC INDEX BEING BELOW 1,000 POINTS - INTERMODAL
Once again we are faced with the situation of the Dry Baltic Index being below 1,000 points. In a market where the feeling of insecurity is almost ...
Wednesday, 17 April 19
LNG WESTERN AFRICA CONFERENCE 2019
The only LNG Focus Platform to Accelerate Investment and Cooperation in Western African Countries
LNG Western Africa Conference 2019 ...
Saturday, 13 April 19
IMO 2020 - DON'T SCRUB IT! - IVAR MYKLEBUST
KNOWLEDGE TO ELEVATE
Höegh Autoliners stands firm on its decision not to implement scrubbers but comply with the IMO 2020 regulations by ...
Saturday, 13 April 19
CAPESIZE: WEST AUSTRALIA TO CHINA IRON ORE CARGOES LIFTING FROM $4.60 PMT TO ABOVE $5.00 - BALTIC BRIEFING
Capesize
The market saw a steep ascent from the depths of last week. The Baltic Capesize Index (BCI) 5TC opened on Monday at $5,099, although b ...
Friday, 12 April 19
OIL MARKET REPORT: MIXED SIGNALS - IEA
The huge increase in oil production we saw in 2H18 has reversed following the implementation of the new Vienna Agreement and the increasing effecti ...
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- Asia Pacific Energy Resources Ventures Inc, Philippines
- Karbindo Abesyapradhi - Indoneisa
- Neyveli Lignite Corporation Ltd, - India
- Mjunction Services Limited - India
- Cigading International Bulk Terminal - Indonesia
- Tata Chemicals Ltd - India
- Global Green Power PLC Corporation, Philippines
- Price Waterhouse Coopers - Russia
- Heidelberg Cement - Germany
- Central Electricity Authority - India
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Madhucon Powers Ltd - India
- MS Steel International - UAE
- Ministry of Transport, Egypt
- Indika Energy - Indonesia
- Ambuja Cements Ltd - India
- CNBM International Corporation - China
- Bahari Cakrawala Sebuku - Indonesia
- London Commodity Brokers - England
- Posco Energy - South Korea
- Medco Energi Mining Internasional
- Goldman Sachs - Singapore
- GAC Shipping (India) Pvt Ltd
- Intertek Mineral Services - Indonesia
- Bhoruka Overseas - Indonesia
- International Coal Ventures Pvt Ltd - India
- Baramulti Group, Indonesia
- Energy Development Corp, Philippines
- Aboitiz Power Corporation - Philippines
- Independent Power Producers Association of India
- Bulk Trading Sa - Switzerland
- Port Waratah Coal Services - Australia
- SMG Consultants - Indonesia
- Indian Energy Exchange, India
- Salva Resources Pvt Ltd - India
- Eastern Energy - Thailand
- Marubeni Corporation - India
- Riau Bara Harum - Indonesia
- Therma Luzon, Inc, Philippines
- New Zealand Coal & Carbon
- Miang Besar Coal Terminal - Indonesia
- Xindia Steels Limited - India
- VISA Power Limited - India
- Gujarat Mineral Development Corp Ltd - India
- Kalimantan Lumbung Energi - Indonesia
- SMC Global Power, Philippines
- Coastal Gujarat Power Limited - India
- Cement Manufacturers Association - India
- ICICI Bank Limited - India
- PNOC Exploration Corporation - Philippines
- Alfred C Toepfer International GmbH - Germany
- Agrawal Coal Company - India
- Electricity Authority, New Zealand
- Leighton Contractors Pty Ltd - Australia
- Mintek Dendrill Indonesia
- Gujarat Sidhee Cement - India
- Indonesian Coal Mining Association
- Offshore Bulk Terminal Pte Ltd, Singapore
- Vizag Seaport Private Limited - India
- Global Business Power Corporation, Philippines
- The University of Queensland
- Oldendorff Carriers - Singapore
- Ind-Barath Power Infra Limited - India
- Ministry of Finance - Indonesia
- Ministry of Mines - Canada
- Sarangani Energy Corporation, Philippines
- South Luzon Thermal Energy Corporation
- Manunggal Multi Energi - Indonesia
- Coal and Oil Company - UAE
- Bukit Asam (Persero) Tbk - Indonesia
- Parry Sugars Refinery, India
- Essar Steel Hazira Ltd - India
- Wood Mackenzie - Singapore
- Jindal Steel & Power Ltd - India
- Carbofer General Trading SA - India
- Parliament of New Zealand
- Bharathi Cement Corporation - India
- PowerSource Philippines DevCo
- PetroVietnam Power Coal Import and Supply Company
- Meenaskhi Energy Private Limited - India
- Africa Commodities Group - South Africa
- LBH Netherlands Bv - Netherlands
- Interocean Group of Companies - India
- Pendopo Energi Batubara - Indonesia
- Vedanta Resources Plc - India
- Trasteel International SA, Italy
- Rio Tinto Coal - Australia
- Bukit Baiduri Energy - Indonesia
- SN Aboitiz Power Inc, Philippines
- Semirara Mining Corp, Philippines
- Edison Trading Spa - Italy
- Holcim Trading Pte Ltd - Singapore
- Pipit Mutiara Jaya. PT, Indonesia
- Energy Link Ltd, New Zealand
- Orica Australia Pty. Ltd.
- Jaiprakash Power Ventures ltd
- Thiess Contractors Indonesia
- Directorate Of Revenue Intelligence - India
- White Energy Company Limited
- Kohat Cement Company Ltd. - Pakistan
- Malabar Cements Ltd - India
- Kumho Petrochemical, South Korea
- Sree Jayajothi Cements Limited - India
- Karaikal Port Pvt Ltd - India
- Chettinad Cement Corporation Ltd - India
- Attock Cement Pakistan Limited
- Australian Commodity Traders Exchange
- The State Trading Corporation of India Ltd
- GN Power Mariveles Coal Plant, Philippines
- Directorate General of MIneral and Coal - Indonesia
- Jorong Barutama Greston.PT - Indonesia
- Siam City Cement - Thailand
- Petrochimia International Co. Ltd.- Taiwan
- European Bulk Services B.V. - Netherlands
- Indo Tambangraya Megah - Indonesia
- Power Finance Corporation Ltd., India
- Meralco Power Generation, Philippines
- IEA Clean Coal Centre - UK
- Kartika Selabumi Mining - Indonesia
- ASAPP Information Group - India
- The Treasury - Australian Government
- Indian Oil Corporation Limited
- Metalloyd Limited - United Kingdom
- TNB Fuel Sdn Bhd - Malaysia
- GMR Energy Limited - India
- CIMB Investment Bank - Malaysia
- Bhushan Steel Limited - India
- Simpson Spence & Young - Indonesia
- Altura Mining Limited, Indonesia
- Anglo American - United Kingdom
- Barasentosa Lestari - Indonesia
- Economic Council, Georgia
- Bukit Makmur.PT - Indonesia
- Bhatia International Limited - India
- Makarim & Taira - Indonesia
- San Jose City I Power Corp, Philippines
- Gujarat Electricity Regulatory Commission - India
- Sical Logistics Limited - India
- Coalindo Energy - Indonesia
- Kideco Jaya Agung - Indonesia
- Iligan Light & Power Inc, Philippines
- Asmin Koalindo Tuhup - Indonesia
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Bank of Tokyo Mitsubishi UFJ Ltd
- Australian Coal Association
- Straits Asia Resources Limited - Singapore
- Latin American Coal - Colombia
- GVK Power & Infra Limited - India
- Uttam Galva Steels Limited - India
- Binh Thuan Hamico - Vietnam
- TeaM Sual Corporation - Philippines
- Indogreen Group - Indonesia
- PTC India Limited - India
- AsiaOL BioFuels Corp., Philippines
- Formosa Plastics Group - Taiwan
- McConnell Dowell - Australia
- Rashtriya Ispat Nigam Limited - India
- Bangladesh Power Developement Board
- Tamil Nadu electricity Board
- Planning Commission, India
- Banpu Public Company Limited - Thailand
- Global Coal Blending Company Limited - Australia
- Petron Corporation, Philippines
- Billiton Holdings Pty Ltd - Australia
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Dalmia Cement Bharat India
- Eastern Coal Council - USA
- Renaissance Capital - South Africa
- Timah Investasi Mineral - Indoneisa
- India Bulls Power Limited - India
- Antam Resourcindo - Indonesia
- Sinarmas Energy and Mining - Indonesia
- Sakthi Sugars Limited - India
- Mercator Lines Limited - India
- Kapuas Tunggal Persada - Indonesia
- Singapore Mercantile Exchange
- Kobexindo Tractors - Indoneisa
- Georgia Ports Authority, United States
- Krishnapatnam Port Company Ltd. - India
- Orica Mining Services - Indonesia
- Bayan Resources Tbk. - Indonesia
- Electricity Generating Authority of Thailand
- OPG Power Generation Pvt Ltd - India
- Thai Mozambique Logistica
- Sojitz Corporation - Japan
- Videocon Industries ltd - India
- Star Paper Mills Limited - India
- Aditya Birla Group - India
- Larsen & Toubro Limited - India
- IHS Mccloskey Coal Group - USA
- Kaltim Prima Coal - Indonesia
- Grasim Industreis Ltd - India
- Mercuria Energy - Indonesia
- Savvy Resources Ltd - HongKong
- Standard Chartered Bank - UAE
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Sindya Power Generating Company Private Ltd
- Maheswari Brothers Coal Limited - India
- Maharashtra Electricity Regulatory Commission - India
- Minerals Council of Australia
- Kepco SPC Power Corporation, Philippines
- Deloitte Consulting - India
- Vijayanagar Sugar Pvt Ltd - India
- Borneo Indobara - Indonesia
- Romanian Commodities Exchange
- Globalindo Alam Lestari - Indonesia
- Chamber of Mines of South Africa
- Toyota Tsusho Corporation, Japan
- Wilmar Investment Holdings
- Merrill Lynch Commodities Europe
- Commonwealth Bank - Australia
- Semirara Mining and Power Corporation, Philippines
- Samtan Co., Ltd - South Korea
- Siam City Cement PLC, Thailand
- Ceylon Electricity Board - Sri Lanka
- Central Java Power - Indonesia
- Lanco Infratech Ltd - India
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