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Wednesday, 30 May 18
SHIPPING MARKET INSIGHT - ILIAS M. LALAOUNIS
 Among several hot topics that will be discussed during the Posidonia week, the International Maritime Organization regulation that will be enforced on Jan 2020 and calls for ships to reduce the maximum sulphur content of their fuels to 0.5 percent, will definitely be on the spotlight. The fuel discussion becomes even more interesting following the recent oil rally that drove global benchmark Brent to the highest level late 2014, near 80usd last week before settling back to around 75usd. According to Morgan Stanley’s latest report, besides key fundamentals and political externalities, oil prices will be severely impacted as new international shipping regulations takes effect, overhauling the types of fuels produced by refiners, and will push Brent crude reaching $90 a barrel by 2020. An increase in demand of low sulphur fuels will hike demand of middle distillate products (diesel and marine gasoil), that will result a significant need for more crude; this will drive crack spreads higher and will boost oil prices. Consequently, several hybrid fuels (Ultra low sulphur Fuel oils) will be marketed by refineries and traders; however they have several red flags (compatibility issues among others). Hence, it seems very unlikely that refiners, traders and bunker suppliers will manage to market a "one spec fits all" low sulphur fuel oil product. This will create an oversupply of high sulphur fuel oil that is expected to put pressure on refineries to produce more distillate fuels.
Data from the report suggests that middle distillate markets are already pretty tight in matters of supply; i.e. diesel and gasoil stockpiles in key storage hubs in Europe, the U.S. and Asia are currently below their 5-yr seasonal averages. At the same time, demand for these distillates is growing annually by 600k barrels/day since 2011, accelerating to 800,000 barrels/day in recent quarters. According to recent studies, the IMO regulation is expected to boost demand by an additional 1.5 million barrels/day by 2020, which should boost crude prices. While global crude production will most likely rise, it probably won’t increase by the 5.7 million barrels/day needed by 2020 to meet the additional demand for fuels. Since current fundamentals as well as the IMO regulation impact point to higher bunker prices, speed & consumptions of ships are once again on the spotlight. Consequently, the instalment (or not) of scrubbers is already a big debate among owners and charterers. If the above analysis is proven correct, and a sudden increase in demand of middle distillates is combined with tight distillate product supply as well as high crude oil prices and an oversupply of high sulphur fuel oil, then the price differential between low sulphur marine gasoil and high sulphur fuel oil will be definitely significant. The question is how long will a large price gap exist for and if it will suffice for the payback of the initial investment cost to install a scrubber. In other words, will this price differential incentivize refiners to invest in high cost cocker installations and upgrade their current infrastructure and how long will this process take.
Amid the high cost of bunkers post 2020, charterers will most likely request owners to slow steam; whereas ships with scrubbers will enjoy the flexibility and maximize ton-mile revenue. Similarly, if the majority of the fleet is slow steaming, and in combination with a possible increase of scrapping tonnage that can’t adapt on the new environmental regulations, we see less vessels competing over cargos; that will probably drive the market upwards. All in all, although the advantages of installing scrubbers especially on thirsty ships are clear, we see only a few owners and newbuilding orders that include scrubbers on board, with the vast majority of orders being “scrubber ready”. Our feeling is that due to current market condition, most owners adopt a “wait and see approach” and currently hold their horses.
By Ilias M. Lalaounis
SnP Broker
Compiled by:
Intermodal Research & Valuations
Analysts:
Ms Eva Tzima
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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Tuesday, 26 June 18
"ALWAYS ACCESSIBLE": ARRIVAL, DEPARTURE OR BOTH? - INCE & CO
KNOWLEDGE TO ELEVATE
An “always accessible” berth warranty is often used by an owner to transfer the risk of delays in berthing to ...
Tuesday, 26 June 18
A SHARP RISE IN THE PRICE OF CRUDE OIL WAS TO BE SEEN ON FRIDAY, ITS BIGGEST DAILY GAIN IN TWO YEARS - GEORGE LAZARIDIS
A sharp rise in the price of crude oil was to be seen on Friday, its biggest daily gain in two years, as OPEC reached a deal to raise output. Despi ...
Monday, 25 June 18
AUSTRALIA'S NEWCASTLE PORT SHIPPED 12.179 MT OF COAL IN MAY; DOWN 14.77% M/M
COALspot.com: The Port of Newcastle, Australia’s major trading ports and the world’s largest coal export port has shipped $AU1,453.6 Mi ...
Monday, 25 June 18
COAL IN THE CROSSFIRE: CHINESE TRADERS WARY OF BEING BURNT BY TRADE WAR - REUTERS
At least three U.S. coal shipments on their way to China may end up casualties of the escalating trade dispute after Beijing said it would impose s ...
Saturday, 23 June 18
COAL GROUP TARGETS 9 PER CENT REVENUE SPIKE - VIET NAM NEWS
Viet Nam News reported, the Viet Nam National Coal and Mineral Industries Group (Vinacomin or TKV) is targeting VNĐ116.9 trillion (US$5.1 billion) ...
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- ASAPP Information Group - India
- Pipit Mutiara Jaya. PT, Indonesia
- Vedanta Resources Plc - India
- VISA Power Limited - India
- Maharashtra Electricity Regulatory Commission - India
- Mercator Lines Limited - India
- Eastern Coal Council - USA
- Petrochimia International Co. Ltd.- Taiwan
- Tamil Nadu electricity Board
- White Energy Company Limited
- Marubeni Corporation - India
- Global Green Power PLC Corporation, Philippines
- Ambuja Cements Ltd - India
- Kaltim Prima Coal - Indonesia
- PowerSource Philippines DevCo
- Petron Corporation, Philippines
- Salva Resources Pvt Ltd - India
- Antam Resourcindo - Indonesia
- Ministry of Mines - Canada
- Ministry of Finance - Indonesia
- Kobexindo Tractors - Indoneisa
- Bahari Cakrawala Sebuku - Indonesia
- Sojitz Corporation - Japan
- Jaiprakash Power Ventures ltd
- OPG Power Generation Pvt Ltd - India
- Coastal Gujarat Power Limited - India
- PNOC Exploration Corporation - Philippines
- Latin American Coal - Colombia
- Alfred C Toepfer International GmbH - Germany
- Singapore Mercantile Exchange
- Simpson Spence & Young - Indonesia
- Semirara Mining and Power Corporation, Philippines
- Planning Commission, India
- Chettinad Cement Corporation Ltd - India
- PetroVietnam Power Coal Import and Supply Company
- Indonesian Coal Mining Association
- Meralco Power Generation, Philippines
- Directorate Of Revenue Intelligence - India
- Central Java Power - Indonesia
- Jindal Steel & Power Ltd - India
- Samtan Co., Ltd - South Korea
- Renaissance Capital - South Africa
- Indo Tambangraya Megah - Indonesia
- Global Coal Blending Company Limited - Australia
- Port Waratah Coal Services - Australia
- Bukit Asam (Persero) Tbk - Indonesia
- Wood Mackenzie - Singapore
- Tata Chemicals Ltd - India
- Vizag Seaport Private Limited - India
- Altura Mining Limited, Indonesia
- Rio Tinto Coal - Australia
- Parry Sugars Refinery, India
- Bulk Trading Sa - Switzerland
- Savvy Resources Ltd - HongKong
- Global Business Power Corporation, Philippines
- India Bulls Power Limited - India
- Formosa Plastics Group - Taiwan
- SMG Consultants - Indonesia
- Borneo Indobara - Indonesia
- Billiton Holdings Pty Ltd - Australia
- Offshore Bulk Terminal Pte Ltd, Singapore
- Kalimantan Lumbung Energi - Indonesia
- Deloitte Consulting - India
- Holcim Trading Pte Ltd - Singapore
- Banpu Public Company Limited - Thailand
- Intertek Mineral Services - Indonesia
- Energy Link Ltd, New Zealand
- Aboitiz Power Corporation - Philippines
- MS Steel International - UAE
- CIMB Investment Bank - Malaysia
- Riau Bara Harum - Indonesia
- Thai Mozambique Logistica
- Essar Steel Hazira Ltd - India
- Orica Australia Pty. Ltd.
- CNBM International Corporation - China
- Kapuas Tunggal Persada - Indonesia
- SMC Global Power, Philippines
- Australian Commodity Traders Exchange
- TeaM Sual Corporation - Philippines
- Toyota Tsusho Corporation, Japan
- Neyveli Lignite Corporation Ltd, - India
- Karbindo Abesyapradhi - Indoneisa
- Commonwealth Bank - Australia
- Barasentosa Lestari - Indonesia
- Romanian Commodities Exchange
- Xindia Steels Limited - India
- Trasteel International SA, Italy
- Coalindo Energy - Indonesia
- Minerals Council of Australia
- Goldman Sachs - Singapore
- Directorate General of MIneral and Coal - Indonesia
- Interocean Group of Companies - India
- Gujarat Electricity Regulatory Commission - India
- Asmin Koalindo Tuhup - Indonesia
- Grasim Industreis Ltd - India
- GMR Energy Limited - India
- Gujarat Sidhee Cement - India
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- PTC India Limited - India
- IEA Clean Coal Centre - UK
- Uttam Galva Steels Limited - India
- McConnell Dowell - Australia
- IHS Mccloskey Coal Group - USA
- Rashtriya Ispat Nigam Limited - India
- Electricity Generating Authority of Thailand
- Edison Trading Spa - Italy
- Ministry of Transport, Egypt
- Sakthi Sugars Limited - India
- Medco Energi Mining Internasional
- Lanco Infratech Ltd - India
- European Bulk Services B.V. - Netherlands
- Cement Manufacturers Association - India
- Mercuria Energy - Indonesia
- Therma Luzon, Inc, Philippines
- Agrawal Coal Company - India
- Krishnapatnam Port Company Ltd. - India
- SN Aboitiz Power Inc, Philippines
- Cigading International Bulk Terminal - Indonesia
- TNB Fuel Sdn Bhd - Malaysia
- Dalmia Cement Bharat India
- Africa Commodities Group - South Africa
- Sarangani Energy Corporation, Philippines
- Bukit Baiduri Energy - Indonesia
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Jorong Barutama Greston.PT - Indonesia
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Standard Chartered Bank - UAE
- Siam City Cement - Thailand
- Price Waterhouse Coopers - Russia
- Videocon Industries ltd - India
- GN Power Mariveles Coal Plant, Philippines
- AsiaOL BioFuels Corp., Philippines
- Carbofer General Trading SA - India
- Bharathi Cement Corporation - India
- Kideco Jaya Agung - Indonesia
- Siam City Cement PLC, Thailand
- San Jose City I Power Corp, Philippines
- New Zealand Coal & Carbon
- Coal and Oil Company - UAE
- Chamber of Mines of South Africa
- Vijayanagar Sugar Pvt Ltd - India
- Bangladesh Power Developement Board
- Merrill Lynch Commodities Europe
- London Commodity Brokers - England
- Miang Besar Coal Terminal - Indonesia
- Indogreen Group - Indonesia
- GAC Shipping (India) Pvt Ltd
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Power Finance Corporation Ltd., India
- Posco Energy - South Korea
- Baramulti Group, Indonesia
- Madhucon Powers Ltd - India
- Star Paper Mills Limited - India
- Electricity Authority, New Zealand
- Larsen & Toubro Limited - India
- Karaikal Port Pvt Ltd - India
- Heidelberg Cement - Germany
- Mjunction Services Limited - India
- Leighton Contractors Pty Ltd - Australia
- GVK Power & Infra Limited - India
- Malabar Cements Ltd - India
- Oldendorff Carriers - Singapore
- Bhushan Steel Limited - India
- Manunggal Multi Energi - Indonesia
- Metalloyd Limited - United Kingdom
- Parliament of New Zealand
- Sree Jayajothi Cements Limited - India
- Straits Asia Resources Limited - Singapore
- Wilmar Investment Holdings
- Kumho Petrochemical, South Korea
- Bukit Makmur.PT - Indonesia
- Bank of Tokyo Mitsubishi UFJ Ltd
- Aditya Birla Group - India
- The Treasury - Australian Government
- South Luzon Thermal Energy Corporation
- Ceylon Electricity Board - Sri Lanka
- Sical Logistics Limited - India
- Thiess Contractors Indonesia
- The University of Queensland
- Binh Thuan Hamico - Vietnam
- Semirara Mining Corp, Philippines
- Central Electricity Authority - India
- Meenaskhi Energy Private Limited - India
- Australian Coal Association
- Kartika Selabumi Mining - Indonesia
- Kepco SPC Power Corporation, Philippines
- Energy Development Corp, Philippines
- Makarim & Taira - Indonesia
- Anglo American - United Kingdom
- Indian Energy Exchange, India
- ICICI Bank Limited - India
- Maheswari Brothers Coal Limited - India
- Indian Oil Corporation Limited
- Iligan Light & Power Inc, Philippines
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Sindya Power Generating Company Private Ltd
- Pendopo Energi Batubara - Indonesia
- Globalindo Alam Lestari - Indonesia
- Kohat Cement Company Ltd. - Pakistan
- Eastern Energy - Thailand
- Bhoruka Overseas - Indonesia
- Orica Mining Services - Indonesia
- International Coal Ventures Pvt Ltd - India
- Attock Cement Pakistan Limited
- Sinarmas Energy and Mining - Indonesia
- Independent Power Producers Association of India
- Ind-Barath Power Infra Limited - India
- Bhatia International Limited - India
- Gujarat Mineral Development Corp Ltd - India
- Economic Council, Georgia
- LBH Netherlands Bv - Netherlands
- Indika Energy - Indonesia
- Bayan Resources Tbk. - Indonesia
- Timah Investasi Mineral - Indoneisa
- Mintek Dendrill Indonesia
- The State Trading Corporation of India Ltd
- Georgia Ports Authority, United States
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