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Wednesday, 25 July 18
TANKER MARKET INSIGHT - DIMITRIS KOURTESIS
 We are now into the second half of 2018, which so far has not been a fruitful year for tankers. With 2020 quickly approaching we need to consider the implications arising from the new fuel directives. 2020 seems to be the year that there will be a noticeable increase in the cost of moving cargo, with the forces driving costs upwards being either scrubbers and/or the increased demand for cleaner fuels.
The need for cleaner fuels will not only boost demand for product tankers though. Given the much higher crude oil quantities the production of these cleaner fuels requires compared to HFO, a boost in crude oil demand and a consequent support on crude tanker freight rates appears to also be in the cards.
The increase in fuel costs will definitely increase revenues but not profits. Therefore small owners with older, less efficient units, not capable of installing scrubbers, will be forced to either merge with larger companies, who have the cash flow to support financing, or in some cases will have to sell/ scrap and exit the industry. This filtering process will separate companies that managed to evolve and endure through the cycle and concurrently will correct the oversupply of tonnage, which drives rates in some cases well below their operating expenses today.
Vessels equipped with scrubbers or eco units will have a competitive advantage and owners will be able to fix periods at levels including a premium, as charterers will prefer to charter compliant and fuel efficient units. The market right now for a 1 year time charter, medium range non eco / non scrubber equipped tanker trading in clean petroleum products is around USD 13,000 per day. On the other hand, an eco/scrubber equipped unit would get approximately USD 14,500 - 15,000 per day for the same period.
We can identify that the difference of USD 1,500 - 2,000 per day is the premium charterers are paying in order to be 2020 compliant and have efficient units under their time charter. Apart from Ship owners/operators and charterers, it's also quite interesting to see how modern refineries are getting prepared for these changes. According to HSBC's research on IMO 2020, four of the most technically advanced refineries, S-oil, SK Innovation, Reliance Industries and Repsol are further upgrading and investing in their plants. They target to eliminate their HFO production by early to mid-2020. Specifically, SKI will focus on refining only very low sulphur fuel oil (VLSFO). The goal of these refineries is to find themselves in a position where, come 2020, they have substantially decreased– or even better entirely eliminated – the production of HFO.
Mr. T. Veniamis on behalf of the Union of Greek Ship Owners, stated that Greek ship owners are working hard to comply with the 2020 requirements (0.5% sulfur cap). He also stressed the importance that these cleaner fuels are – aside from compliant – also safe for both the crew and the ship itself. To conclude, the general sentiment particularly for Owners with units up to MR size without scrubbers, is to patiently wait and plan day by day, as the investment of installing scrubbers on older units may not make financial sense given today’s fundamentals.
By Dimitris Kourtesis
Tanker Chartering 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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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 ...
Sunday, 07 October 18
SUPRAMAX: INDO-INDIA USUAL COAL RUNS WERE COVERED AT US$ 12K - FEARNLEYS
Capesize
Average daily earnings up close to 15 pct in 5 trading days, thus patience finally paying off for owners of the big ships - Chinese play ...
Sunday, 07 October 18
A CASE FOR 20/20 VISION? IMO'S LOW SULPHUR FUEL LIMIT UNDER MARPOL ANNEX VI WHICH COMES INTO FORCE ON 1ST JANUARY 2020
KNOWLEDGE TO ELEVATE
The implementation of the global 0.5% sulphur cap for bunker fuel under MARPOL Annex VI in just under 18 months’ ti ...
Friday, 05 October 18
COAL PRODUCTION REACHES 64% OF 2018 TARGET : THE JAKARTA POST
National coal production up to August has already reached 311 million tons, or 64 percent of this year's total target of 485 million tons, acco ...
Wednesday, 03 October 18
VALUE OF AUSTRALIAN COAL EXPORTS TIPPED TO DECLINE SHARPLY OVER NEXT 18 MONTHS - THE GUARDIAN
Thermal coal prices forecast to drop 25% and metallurgical coal prices 23% as value of iron ore exports also falls
The value of Aust ...
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- Bukit Asam (Persero) Tbk - Indonesia
- MS Steel International - UAE
- White Energy Company Limited
- Karbindo Abesyapradhi - Indoneisa
- Holcim Trading Pte Ltd - Singapore
- Bukit Makmur.PT - Indonesia
- Port Waratah Coal Services - Australia
- Petrochimia International Co. Ltd.- Taiwan
- CNBM International Corporation - China
- Ind-Barath Power Infra Limited - India
- Krishnapatnam Port Company Ltd. - India
- Sical Logistics Limited - India
- Latin American Coal - Colombia
- Chettinad Cement Corporation Ltd - India
- SMC Global Power, Philippines
- Georgia Ports Authority, United States
- Uttam Galva Steels Limited - India
- Riau Bara Harum - Indonesia
- Cigading International Bulk Terminal - Indonesia
- Mjunction Services Limited - India
- Wood Mackenzie - Singapore
- Ministry of Transport, Egypt
- India Bulls Power Limited - India
- Global Business Power Corporation, Philippines
- Jorong Barutama Greston.PT - Indonesia
- Tata Chemicals Ltd - India
- Ministry of Mines - Canada
- Asmin Koalindo Tuhup - Indonesia
- McConnell Dowell - Australia
- Jindal Steel & Power Ltd - India
- Siam City Cement PLC, Thailand
- Independent Power Producers Association of India
- Star Paper Mills Limited - India
- PowerSource Philippines DevCo
- Simpson Spence & Young - Indonesia
- Iligan Light & Power Inc, Philippines
- Vizag Seaport Private Limited - India
- SN Aboitiz Power Inc, Philippines
- Semirara Mining and Power Corporation, Philippines
- Savvy Resources Ltd - HongKong
- Price Waterhouse Coopers - Russia
- Thai Mozambique Logistica
- LBH Netherlands Bv - Netherlands
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Agrawal Coal Company - India
- International Coal Ventures Pvt Ltd - India
- Kepco SPC Power Corporation, Philippines
- Gujarat Electricity Regulatory Commission - India
- Kideco Jaya Agung - Indonesia
- Posco Energy - South Korea
- Parry Sugars Refinery, India
- CIMB Investment Bank - Malaysia
- Bayan Resources Tbk. - Indonesia
- Kobexindo Tractors - Indoneisa
- Ceylon Electricity Board - Sri Lanka
- Coal and Oil Company - UAE
- Essar Steel Hazira Ltd - India
- Alfred C Toepfer International GmbH - Germany
- Medco Energi Mining Internasional
- TNB Fuel Sdn Bhd - Malaysia
- The State Trading Corporation of India Ltd
- Australian Commodity Traders Exchange
- Thiess Contractors Indonesia
- Kohat Cement Company Ltd. - Pakistan
- Minerals Council of Australia
- Trasteel International SA, Italy
- Sindya Power Generating Company Private Ltd
- Bhushan Steel Limited - India
- Metalloyd Limited - United Kingdom
- Electricity Authority, New Zealand
- IHS Mccloskey Coal Group - USA
- Bahari Cakrawala Sebuku - Indonesia
- Planning Commission, India
- Central Electricity Authority - India
- Standard Chartered Bank - UAE
- Gujarat Sidhee Cement - India
- Interocean Group of Companies - India
- Jaiprakash Power Ventures ltd
- Asia Pacific Energy Resources Ventures Inc, Philippines
- GMR Energy Limited - India
- Aboitiz Power Corporation - Philippines
- Aditya Birla Group - India
- Chamber of Mines of South Africa
- Ambuja Cements Ltd - India
- Sarangani Energy Corporation, Philippines
- Energy Link Ltd, New Zealand
- Parliament of New Zealand
- Vedanta Resources Plc - India
- Gujarat Mineral Development Corp Ltd - India
- Altura Mining Limited, Indonesia
- Mintek Dendrill Indonesia
- Maharashtra Electricity Regulatory Commission - India
- Central Java Power - Indonesia
- Mercuria Energy - Indonesia
- Larsen & Toubro Limited - India
- Miang Besar Coal Terminal - Indonesia
- Carbofer General Trading SA - India
- ASAPP Information Group - India
- Kalimantan Lumbung Energi - Indonesia
- Petron Corporation, Philippines
- Sakthi Sugars Limited - India
- South Luzon Thermal Energy Corporation
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Tamil Nadu electricity Board
- Goldman Sachs - Singapore
- Borneo Indobara - Indonesia
- The University of Queensland
- Edison Trading Spa - Italy
- Karaikal Port Pvt Ltd - India
- Sree Jayajothi Cements Limited - India
- Vijayanagar Sugar Pvt Ltd - India
- Toyota Tsusho Corporation, Japan
- Formosa Plastics Group - Taiwan
- Pipit Mutiara Jaya. PT, Indonesia
- Anglo American - United Kingdom
- Energy Development Corp, Philippines
- IEA Clean Coal Centre - UK
- Merrill Lynch Commodities Europe
- Romanian Commodities Exchange
- The Treasury - Australian Government
- Therma Luzon, Inc, Philippines
- Malabar Cements Ltd - India
- Grasim Industreis Ltd - India
- San Jose City I Power Corp, Philippines
- Manunggal Multi Energi - Indonesia
- Indian Energy Exchange, India
- Cement Manufacturers Association - India
- Sinarmas Energy and Mining - Indonesia
- Neyveli Lignite Corporation Ltd, - India
- Heidelberg Cement - Germany
- Singapore Mercantile Exchange
- Oldendorff Carriers - Singapore
- Eastern Energy - Thailand
- Marubeni Corporation - India
- Bangladesh Power Developement Board
- Salva Resources Pvt Ltd - India
- Semirara Mining Corp, Philippines
- Samtan Co., Ltd - South Korea
- Makarim & Taira - Indonesia
- Indogreen Group - Indonesia
- Timah Investasi Mineral - Indoneisa
- Lanco Infratech Ltd - India
- Leighton Contractors Pty Ltd - Australia
- Globalindo Alam Lestari - Indonesia
- GN Power Mariveles Coal Plant, Philippines
- Kartika Selabumi Mining - Indonesia
- SMG Consultants - Indonesia
- Pendopo Energi Batubara - Indonesia
- Indika Energy - Indonesia
- Siam City Cement - Thailand
- Bharathi Cement Corporation - India
- Straits Asia Resources Limited - Singapore
- Wilmar Investment Holdings
- GAC Shipping (India) Pvt Ltd
- Orica Mining Services - Indonesia
- London Commodity Brokers - England
- Xindia Steels Limited - India
- Electricity Generating Authority of Thailand
- Economic Council, Georgia
- Attock Cement Pakistan Limited
- Bulk Trading Sa - Switzerland
- GVK Power & Infra Limited - India
- TeaM Sual Corporation - Philippines
- Bukit Baiduri Energy - Indonesia
- Binh Thuan Hamico - Vietnam
- PetroVietnam Power Coal Import and Supply Company
- Directorate Of Revenue Intelligence - India
- Bank of Tokyo Mitsubishi UFJ Ltd
- Directorate General of MIneral and Coal - Indonesia
- Dalmia Cement Bharat India
- Commonwealth Bank - Australia
- Australian Coal Association
- Deloitte Consulting - India
- New Zealand Coal & Carbon
- Banpu Public Company Limited - Thailand
- Kapuas Tunggal Persada - Indonesia
- Intertek Mineral Services - Indonesia
- Kumho Petrochemical, South Korea
- European Bulk Services B.V. - Netherlands
- Madhucon Powers Ltd - India
- Renaissance Capital - South Africa
- ICICI Bank Limited - India
- Baramulti Group, Indonesia
- Videocon Industries ltd - India
- Kaltim Prima Coal - Indonesia
- Ministry of Finance - Indonesia
- Indian Oil Corporation Limited
- PTC India Limited - India
- Meralco Power Generation, Philippines
- Orica Australia Pty. Ltd.
- Bhoruka Overseas - Indonesia
- Mercator Lines Limited - India
- Rashtriya Ispat Nigam Limited - India
- Africa Commodities Group - South Africa
- Eastern Coal Council - USA
- Sojitz Corporation - Japan
- Meenaskhi Energy Private Limited - India
- Maheswari Brothers Coal Limited - India
- Coastal Gujarat Power Limited - India
- Offshore Bulk Terminal Pte Ltd, Singapore
- Billiton Holdings Pty Ltd - Australia
- Coalindo Energy - Indonesia
- Rio Tinto Coal - Australia
- Indonesian Coal Mining Association
- Barasentosa Lestari - Indonesia
- VISA Power Limited - India
- OPG Power Generation Pvt Ltd - India
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Global Green Power PLC Corporation, Philippines
- AsiaOL BioFuels Corp., Philippines
- Antam Resourcindo - Indonesia
- Indo Tambangraya Megah - Indonesia
- Power Finance Corporation Ltd., India
- Global Coal Blending Company Limited - Australia
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- PNOC Exploration Corporation - Philippines
- Bhatia International Limited - India
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