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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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Thursday, 21 June 18
CHINESE REDUCED COAL IMPORT RESTRICTIONS - CAIXIN GLOBAL
Caixin Global reported that the Chinese government has reduced restrictions on coal imports at the nation’s major ports in response to concer ...
Thursday, 21 June 18
INDIAN GOVERNMENT ADMITS COAL SHORTAGE, ASKS DISCOMS TO IMPORT - TIMES OF INDIA
Times of India reported that the power ministry has advised all state governments and private power distribution companies to import coal as Coal I ...
Tuesday, 19 June 18
WCA RESPONDS TO BP STATISTICAL REVIEW OF WORLD ENERGY 2018
Responding to BP’s Statistical Review of World Energy 2018, Benjamin Sporton, Chief Executive of the World Coal Association (WCA) said, &ldqu ...
Wednesday, 13 June 18
U.S. COAL PRODUCTION TO DECLINE BY 2% TO 756 MILLION SHORT TONS MMST IN 2018 - EIA
EIA forecasts U.S. coal production to decline by 2% to 756 million short tons (MMst) in 2018.
According to EIA's Short-Term Ener ...
Wednesday, 13 June 18
SHIPPING MARKET INSIGHT - SOPHIE COTZIAS
2018 marks quite a few milestones for Greek Shipping. No need to detail again the greatness of Greek Shipping or the singular position that Greek s ...
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- ASAPP Information Group - India
- Kohat Cement Company Ltd. - Pakistan
- Cigading International Bulk Terminal - Indonesia
- Gujarat Sidhee Cement - India
- PowerSource Philippines DevCo
- Orica Mining Services - Indonesia
- The State Trading Corporation of India Ltd
- Ambuja Cements Ltd - India
- Bayan Resources Tbk. - Indonesia
- International Coal Ventures Pvt Ltd - India
- Parry Sugars Refinery, India
- Krishnapatnam Port Company Ltd. - India
- Kobexindo Tractors - Indoneisa
- Star Paper Mills Limited - India
- Economic Council, Georgia
- Energy Development Corp, Philippines
- Petron Corporation, Philippines
- Globalindo Alam Lestari - Indonesia
- Heidelberg Cement - Germany
- Rio Tinto Coal - Australia
- Billiton Holdings Pty Ltd - Australia
- Aboitiz Power Corporation - Philippines
- Offshore Bulk Terminal Pte Ltd, Singapore
- Sree Jayajothi Cements Limited - India
- Therma Luzon, Inc, Philippines
- Singapore Mercantile Exchange
- Uttam Galva Steels Limited - India
- Central Java Power - Indonesia
- Aditya Birla Group - India
- Eastern Coal Council - USA
- Essar Steel Hazira Ltd - India
- IHS Mccloskey Coal Group - USA
- Coastal Gujarat Power Limited - India
- Maharashtra Electricity Regulatory Commission - India
- Posco Energy - South Korea
- Sarangani Energy Corporation, Philippines
- Makarim & Taira - Indonesia
- Pipit Mutiara Jaya. PT, Indonesia
- IEA Clean Coal Centre - UK
- Videocon Industries ltd - India
- Goldman Sachs - Singapore
- Kaltim Prima Coal - Indonesia
- Minerals Council of Australia
- GMR Energy Limited - India
- McConnell Dowell - Australia
- Siam City Cement PLC, Thailand
- Renaissance Capital - South Africa
- Simpson Spence & Young - Indonesia
- Attock Cement Pakistan Limited
- Malabar Cements Ltd - India
- Edison Trading Spa - Italy
- Vizag Seaport Private Limited - India
- Tamil Nadu electricity Board
- Agrawal Coal Company - India
- Kapuas Tunggal Persada - Indonesia
- Indo Tambangraya Megah - Indonesia
- Deloitte Consulting - India
- Antam Resourcindo - Indonesia
- Marubeni Corporation - India
- Central Electricity Authority - India
- Sinarmas Energy and Mining - Indonesia
- Oldendorff Carriers - Singapore
- Bulk Trading Sa - Switzerland
- India Bulls Power Limited - India
- Alfred C Toepfer International GmbH - Germany
- Chamber of Mines of South Africa
- Rashtriya Ispat Nigam Limited - India
- Port Waratah Coal Services - Australia
- Vedanta Resources Plc - India
- Australian Commodity Traders Exchange
- PTC India Limited - India
- Global Green Power PLC Corporation, Philippines
- Straits Asia Resources Limited - Singapore
- Petrochimia International Co. Ltd.- Taiwan
- Riau Bara Harum - Indonesia
- Mercuria Energy - Indonesia
- Energy Link Ltd, New Zealand
- Tata Chemicals Ltd - India
- Commonwealth Bank - Australia
- Meenaskhi Energy Private Limited - India
- Sojitz Corporation - Japan
- PNOC Exploration Corporation - Philippines
- White Energy Company Limited
- Metalloyd Limited - United Kingdom
- Chettinad Cement Corporation Ltd - India
- Toyota Tsusho Corporation, Japan
- SMG Consultants - Indonesia
- Siam City Cement - Thailand
- Kumho Petrochemical, South Korea
- Bukit Asam (Persero) Tbk - Indonesia
- LBH Netherlands Bv - Netherlands
- Global Coal Blending Company Limited - Australia
- Parliament of New Zealand
- Pendopo Energi Batubara - Indonesia
- Ministry of Transport, Egypt
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Leighton Contractors Pty Ltd - Australia
- Price Waterhouse Coopers - Russia
- OPG Power Generation Pvt Ltd - India
- Bhoruka Overseas - Indonesia
- Bangladesh Power Developement Board
- Cement Manufacturers Association - India
- ICICI Bank Limited - India
- South Luzon Thermal Energy Corporation
- Jorong Barutama Greston.PT - Indonesia
- Australian Coal Association
- Bhushan Steel Limited - India
- Formosa Plastics Group - Taiwan
- Coalindo Energy - Indonesia
- Georgia Ports Authority, United States
- Altura Mining Limited, Indonesia
- Savvy Resources Ltd - HongKong
- Kepco SPC Power Corporation, Philippines
- Dalmia Cement Bharat India
- Orica Australia Pty. Ltd.
- Bharathi Cement Corporation - India
- TeaM Sual Corporation - Philippines
- Anglo American - United Kingdom
- Maheswari Brothers Coal Limited - India
- Ceylon Electricity Board - Sri Lanka
- Iligan Light & Power Inc, Philippines
- Medco Energi Mining Internasional
- Ind-Barath Power Infra Limited - India
- Karbindo Abesyapradhi - Indoneisa
- Kalimantan Lumbung Energi - Indonesia
- European Bulk Services B.V. - Netherlands
- The University of Queensland
- Gujarat Mineral Development Corp Ltd - India
- Semirara Mining and Power Corporation, Philippines
- Indogreen Group - Indonesia
- Mercator Lines Limited - India
- Bukit Makmur.PT - Indonesia
- Manunggal Multi Energi - Indonesia
- Thiess Contractors Indonesia
- Bhatia International Limited - India
- Romanian Commodities Exchange
- Salva Resources Pvt Ltd - India
- Wilmar Investment Holdings
- Interocean Group of Companies - India
- Barasentosa Lestari - Indonesia
- Thai Mozambique Logistica
- TNB Fuel Sdn Bhd - Malaysia
- Borneo Indobara - Indonesia
- Grasim Industreis Ltd - India
- Bank of Tokyo Mitsubishi UFJ Ltd
- AsiaOL BioFuels Corp., Philippines
- Standard Chartered Bank - UAE
- Ministry of Finance - Indonesia
- Karaikal Port Pvt Ltd - India
- Sindya Power Generating Company Private Ltd
- Xindia Steels Limited - India
- Trasteel International SA, Italy
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Coal and Oil Company - UAE
- Banpu Public Company Limited - Thailand
- Miang Besar Coal Terminal - Indonesia
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Meralco Power Generation, Philippines
- Carbofer General Trading SA - India
- Mjunction Services Limited - India
- Madhucon Powers Ltd - India
- Ministry of Mines - Canada
- Africa Commodities Group - South Africa
- Planning Commission, India
- Kartika Selabumi Mining - Indonesia
- Vijayanagar Sugar Pvt Ltd - India
- PetroVietnam Power Coal Import and Supply Company
- Indonesian Coal Mining Association
- Latin American Coal - Colombia
- Independent Power Producers Association of India
- Gujarat Electricity Regulatory Commission - India
- GVK Power & Infra Limited - India
- SMC Global Power, Philippines
- Electricity Authority, New Zealand
- Baramulti Group, Indonesia
- Samtan Co., Ltd - South Korea
- GN Power Mariveles Coal Plant, Philippines
- MS Steel International - UAE
- The Treasury - Australian Government
- Indian Oil Corporation Limited
- Neyveli Lignite Corporation Ltd, - India
- Holcim Trading Pte Ltd - Singapore
- Indika Energy - Indonesia
- Jindal Steel & Power Ltd - India
- Larsen & Toubro Limited - India
- Timah Investasi Mineral - Indoneisa
- San Jose City I Power Corp, Philippines
- Sical Logistics Limited - India
- Intertek Mineral Services - Indonesia
- SN Aboitiz Power Inc, Philippines
- Bukit Baiduri Energy - Indonesia
- Binh Thuan Hamico - Vietnam
- Asmin Koalindo Tuhup - Indonesia
- Eastern Energy - Thailand
- Bahari Cakrawala Sebuku - Indonesia
- GAC Shipping (India) Pvt Ltd
- Indian Energy Exchange, India
- Sakthi Sugars Limited - India
- Mintek Dendrill Indonesia
- Kideco Jaya Agung - Indonesia
- Merrill Lynch Commodities Europe
- Wood Mackenzie - Singapore
- VISA Power Limited - India
- Global Business Power Corporation, Philippines
- London Commodity Brokers - England
- Power Finance Corporation Ltd., India
- Directorate General of MIneral and Coal - Indonesia
- CIMB Investment Bank - Malaysia
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Directorate Of Revenue Intelligence - India
- Jaiprakash Power Ventures ltd
- Semirara Mining Corp, Philippines
- Lanco Infratech Ltd - India
- Electricity Generating Authority of Thailand
- New Zealand Coal & Carbon
- CNBM International Corporation - China
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