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Wednesday, 07 January 15
FUEL EFFICIENT SHIPS MAKE LESS SENSE IN LOWER BUNKER PRICE MARKET, BUT FUEL COSTS ARE BOUND TO RISE AGAIN
 The shipping industry entered 2015 on mixed emotions, as a relatively buoyant tanker market is met by a rather lackluster dry bulk market. Still, all ship owners will undoubtedly be happy about the fact that the most important cost driving factor, bunker prices, are way down since the same period of last year. In fact, bunker prices are down by more than 30% since last year, as already, by the end of November of 2014, the cost of Heavy Fuel Oil (HFO) in Fujairah had declined to $460 per metric ton from an average of $609/mt over the first six months of 2014. That’s already a reduction of 24% and more has come since then, on the back of constantly declining crude prices.
Given the fact that bunker prices is the biggest factor in a ship’s operating costs, that kind of reduction is rather significant and one which can offset any loss in terms of freight rates. Thus, ship owners can take advantage of this low cost environment and increase their earnings, through the subsequent fall of OPEX. On the other hand, other factor like the new fuel efficient vessels, or slow steaming are coming into play.
According to a recent report from Poten & Partners, “due to the high oil prices over the last couple of years and the anticipation of continuing high prices in the future, owners have made operational adjustments by utilizing slow steaming on the ballast leg of a voyage, while shipyards and engine manufacturers have worked hard to improve the fuel efficiency of new ships. Using a VLCC as the basis for such analysis as the longer voyages benefit relatively more from fuel efficiency, we use a 2007 built VLCC ordered when HFO prices were around $160/MT and a modern 2013 built VLCC. Vessels can vary significantly in their fuel consumption, both through design and over time, dependent on the condition of the hull paint, etc. The modern vessel in our example saves 7 tons/day in laden condition compared to the older design and 4 tons/day while in ballast. For the comparison we will use the typical VLCC round trip voyage from Ras Tanura to Chiba using the current fuel price ($460/MT) and the average price during the first 6 months of 2014 ($609/MT). On the round trip, the fuel efficient vessel saves $116,200 in fuel with current prices and $151,500 in the higher price environment compared to the 2007 built vessel. This represents savings of $2,179/day in time charter equivalent (TCE) at current bunker prices and $2,839 at 2014H1 bunker prices”.
Poten added that “in order to improve TCE, owners have made operational adjustments by slow steaming during the ballast leg of the voyages, and during the laden leg where it was permitted in the charter party. This helps the owners by improving the economics on individual voyages as the fuel cost savings more than offset the longer steaming time when the market is low. An added benefit is that slow steaming reduces the efficiency or the fleet as more vessels are needed to move the same volume of cargo. Earlier in the year, when the rates were lower, slow steaming made more sense as the additional revenue that could be earned during the additional 3.9 ballasting days was lower than the fuel savings. At current market rates and lower bunker prices, this situation has shifted. At least for the vessel and voyage combination in our example, increasing the ballast speed could prove to be beneficial. The situation could be different for other vessels and voyages, but it makes the case for owners to run the numbers. The benefits of fuel efficient designs might have been reduced for now but the investment is for 20+ years and fuel prices are likely to increase again in the future”, the analyst concluded.
Source: Nikos Roussanoglou, Hellenic Shipping News
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Tuesday, 13 January 15
MORE PITFALLS FOR OWNERS LOOKING TO TERMINATE FOR UNPAID HIRE - INCE & CO
KNOWLEDGE TO ELEVATE
It is a debatable point whether or not the obligation to pay hire under a time charter is a condition of the contract or ...
Tuesday, 13 January 15
Q2 CFR SOUTH CHINA COAL SWAP DECLINED 8.66% M-O-M
COALspot.com: API 8 CFR South China Coal swap for Q1’ 2015 delivery declined by US$ 3.48 (-5.73%) month over month and US$ 2.35 (-3.94%) week ...
Tuesday, 13 January 15
Q1' 2015 RICHARDS BAY COAL SWAP SLIGHTLY HIGHER THAN Q2 & Q4 2015 SWAPS
COALspot.com: API 4 FOB Richards Bay Coal swap for delivery Q1' 2015 lost month on month and week over week.
The Q1 swap has lost US$ 7.21 ...
Monday, 12 January 15
COAL: LOW PRICES ARE EXPECTED TO DRIVE A SUPPLY-DRIVEN RECOVERY IN THE MEDIUM TERM - SGX
COALspot.com: Thermal coal prices dropped to six-year lows in 2014 driven by persistent oversupply, SGX says in its “ Commodities 2014 - A ye ...
Monday, 12 January 15
FREIGHT MARKET: 2015 FLEET SUPPLY GROWTH IS EXPECTED TO REMAIN SLIGHTLY AHEAD OF CARGO GROWTH - SGX
COALspot.com: The dry bulk freight market was forced to digest a number of negatives in 2014 leading the Baltic Dry Index to fall 66% through the y ...
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- Agrawal Coal Company - India
- Krishnapatnam Port Company Ltd. - India
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Therma Luzon, Inc, Philippines
- Kartika Selabumi Mining - Indonesia
- Wood Mackenzie - Singapore
- India Bulls Power Limited - India
- VISA Power Limited - India
- Timah Investasi Mineral - Indoneisa
- San Jose City I Power Corp, Philippines
- Trasteel International SA, Italy
- Rashtriya Ispat Nigam Limited - India
- Sakthi Sugars Limited - India
- Ceylon Electricity Board - Sri Lanka
- Samtan Co., Ltd - South Korea
- TeaM Sual Corporation - Philippines
- Offshore Bulk Terminal Pte Ltd, Singapore
- Carbofer General Trading SA - India
- Medco Energi Mining Internasional
- Altura Mining Limited, Indonesia
- MS Steel International - UAE
- Rio Tinto Coal - Australia
- Ministry of Transport, Egypt
- Bahari Cakrawala Sebuku - Indonesia
- Wilmar Investment Holdings
- Aboitiz Power Corporation - Philippines
- Karaikal Port Pvt Ltd - India
- Aditya Birla Group - India
- Australian Commodity Traders Exchange
- Bhoruka Overseas - Indonesia
- Directorate General of MIneral and Coal - Indonesia
- Parliament of New Zealand
- Sindya Power Generating Company Private Ltd
- Vizag Seaport Private Limited - India
- Grasim Industreis Ltd - India
- Jorong Barutama Greston.PT - Indonesia
- Leighton Contractors Pty Ltd - Australia
- Borneo Indobara - Indonesia
- International Coal Ventures Pvt Ltd - India
- Kumho Petrochemical, South Korea
- Indonesian Coal Mining Association
- Simpson Spence & Young - Indonesia
- Vedanta Resources Plc - India
- Standard Chartered Bank - UAE
- The University of Queensland
- Attock Cement Pakistan Limited
- Cement Manufacturers Association - India
- Coalindo Energy - Indonesia
- Anglo American - United Kingdom
- Lanco Infratech Ltd - India
- Kaltim Prima Coal - Indonesia
- Bhushan Steel Limited - India
- Banpu Public Company Limited - Thailand
- The State Trading Corporation of India Ltd
- Romanian Commodities Exchange
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Renaissance Capital - South Africa
- Price Waterhouse Coopers - Russia
- Electricity Generating Authority of Thailand
- ICICI Bank Limited - India
- GAC Shipping (India) Pvt Ltd
- White Energy Company Limited
- Chamber of Mines of South Africa
- Planning Commission, India
- Ministry of Mines - Canada
- Malabar Cements Ltd - India
- Jindal Steel & Power Ltd - India
- Ministry of Finance - Indonesia
- Deloitte Consulting - India
- OPG Power Generation Pvt Ltd - India
- South Luzon Thermal Energy Corporation
- Oldendorff Carriers - Singapore
- Asmin Koalindo Tuhup - Indonesia
- Videocon Industries ltd - India
- AsiaOL BioFuels Corp., Philippines
- SN Aboitiz Power Inc, Philippines
- Pipit Mutiara Jaya. PT, Indonesia
- TNB Fuel Sdn Bhd - Malaysia
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Energy Link Ltd, New Zealand
- Goldman Sachs - Singapore
- Bukit Makmur.PT - Indonesia
- Singapore Mercantile Exchange
- IEA Clean Coal Centre - UK
- Gujarat Electricity Regulatory Commission - India
- London Commodity Brokers - England
- Central Java Power - Indonesia
- Economic Council, Georgia
- Dalmia Cement Bharat India
- Mjunction Services Limited - India
- Riau Bara Harum - Indonesia
- Global Coal Blending Company Limited - Australia
- Orica Mining Services - Indonesia
- GVK Power & Infra Limited - India
- European Bulk Services B.V. - Netherlands
- Sical Logistics Limited - India
- Madhucon Powers Ltd - India
- Independent Power Producers Association of India
- Antam Resourcindo - Indonesia
- Australian Coal Association
- Ambuja Cements Ltd - India
- The Treasury - Australian Government
- Miang Besar Coal Terminal - Indonesia
- Georgia Ports Authority, United States
- Indika Energy - Indonesia
- Africa Commodities Group - South Africa
- Bukit Asam (Persero) Tbk - Indonesia
- Karbindo Abesyapradhi - Indoneisa
- Bharathi Cement Corporation - India
- Bayan Resources Tbk. - Indonesia
- Jaiprakash Power Ventures ltd
- Coastal Gujarat Power Limited - India
- Ind-Barath Power Infra Limited - India
- Star Paper Mills Limited - India
- Formosa Plastics Group - Taiwan
- Bhatia International Limited - India
- Xindia Steels Limited - India
- Sojitz Corporation - Japan
- Petron Corporation, Philippines
- Maheswari Brothers Coal Limited - India
- New Zealand Coal & Carbon
- PTC India Limited - India
- Semirara Mining and Power Corporation, Philippines
- Global Green Power PLC Corporation, Philippines
- Kobexindo Tractors - Indoneisa
- Tata Chemicals Ltd - India
- Semirara Mining Corp, Philippines
- Essar Steel Hazira Ltd - India
- Metalloyd Limited - United Kingdom
- Uttam Galva Steels Limited - India
- ASAPP Information Group - India
- Eastern Coal Council - USA
- Orica Australia Pty. Ltd.
- PNOC Exploration Corporation - Philippines
- Latin American Coal - Colombia
- Posco Energy - South Korea
- Port Waratah Coal Services - Australia
- Mercator Lines Limited - India
- Marubeni Corporation - India
- Global Business Power Corporation, Philippines
- Chettinad Cement Corporation Ltd - India
- Alfred C Toepfer International GmbH - Germany
- Kideco Jaya Agung - Indonesia
- Siam City Cement - Thailand
- PetroVietnam Power Coal Import and Supply Company
- Bukit Baiduri Energy - Indonesia
- Meenaskhi Energy Private Limited - India
- Indogreen Group - Indonesia
- Commonwealth Bank - Australia
- Tamil Nadu electricity Board
- GMR Energy Limited - India
- Bank of Tokyo Mitsubishi UFJ Ltd
- Salva Resources Pvt Ltd - India
- Vijayanagar Sugar Pvt Ltd - India
- Mercuria Energy - Indonesia
- SMC Global Power, Philippines
- Larsen & Toubro Limited - India
- Merrill Lynch Commodities Europe
- Central Electricity Authority - India
- Interocean Group of Companies - India
- Meralco Power Generation, Philippines
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Intertek Mineral Services - Indonesia
- GN Power Mariveles Coal Plant, Philippines
- Gujarat Sidhee Cement - India
- Indo Tambangraya Megah - Indonesia
- Holcim Trading Pte Ltd - Singapore
- Thai Mozambique Logistica
- Cigading International Bulk Terminal - Indonesia
- Kapuas Tunggal Persada - Indonesia
- Edison Trading Spa - Italy
- Heidelberg Cement - Germany
- Neyveli Lignite Corporation Ltd, - India
- Directorate Of Revenue Intelligence - India
- Makarim & Taira - Indonesia
- Coal and Oil Company - UAE
- Petrochimia International Co. Ltd.- Taiwan
- Baramulti Group, Indonesia
- Bulk Trading Sa - Switzerland
- Binh Thuan Hamico - Vietnam
- Minerals Council of Australia
- Sree Jayajothi Cements Limited - India
- Kalimantan Lumbung Energi - Indonesia
- Indian Energy Exchange, India
- Toyota Tsusho Corporation, Japan
- Kohat Cement Company Ltd. - Pakistan
- Parry Sugars Refinery, India
- SMG Consultants - Indonesia
- Barasentosa Lestari - Indonesia
- Gujarat Mineral Development Corp Ltd - India
- Globalindo Alam Lestari - Indonesia
- LBH Netherlands Bv - Netherlands
- IHS Mccloskey Coal Group - USA
- Pendopo Energi Batubara - Indonesia
- Mintek Dendrill Indonesia
- Indian Oil Corporation Limited
- Sinarmas Energy and Mining - Indonesia
- McConnell Dowell - Australia
- Savvy Resources Ltd - HongKong
- CNBM International Corporation - China
- Power Finance Corporation Ltd., India
- Maharashtra Electricity Regulatory Commission - India
- Eastern Energy - Thailand
- Electricity Authority, New Zealand
- Energy Development Corp, Philippines
- Asia Pacific Energy Resources Ventures Inc, Philippines
- PowerSource Philippines DevCo
- Straits Asia Resources Limited - Singapore
- Iligan Light & Power Inc, Philippines
- Siam City Cement PLC, Thailand
- Sarangani Energy Corporation, Philippines
- Thiess Contractors Indonesia
- Bangladesh Power Developement Board
- Billiton Holdings Pty Ltd - Australia
- Manunggal Multi Energi - Indonesia
- Kepco SPC Power Corporation, Philippines
- CIMB Investment Bank - Malaysia
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