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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, 11 June 18
AUSTRALIAN COAL PRICES HIT 6-YEAR HIGH AS ASIA DEMAND SPIKES - REUTERS
Australian thermal coal prices have risen to their highest level since 2012 as hot weather across North Asia spurs buying ahead of the peak summer ...
Monday, 11 June 18
ANALYSING A NEW AGE OF AUTONOMOUS VESSELS - IMO
The International Maritime Organization answers the questions of Government Europa on how the next generation of autonomous vessels can be regulate ...
Friday, 08 June 18
AUSTRALIAN THERMAL COAL PRICES SURGE AS ASIA DEMAND HEATS UP - REUTERS
Australian thermal coal prices have hit their highest level since late 2016 as the market heats up on strong demand across North Asia and China in ...
Wednesday, 06 June 18
SHIPPING MARKET INSIGHT - KATERINA RESTIS
As observed last month the price of oil hit its highest level since November 2014 reaching $80 per barrel. Global oil demand growth for 2018 was sl ...
Tuesday, 05 June 18
SOUTH KOREA'S SULPHUR CAP ALTERS ASIAN COAL MARKET DYNAMICS: RUSSELL
South Korea’s imposition of a strict sulphur cap on its imported coal is likely to cause ripples across Asia’s markets for the pollutin ...
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- Kaltim Prima Coal - Indonesia
- SMC Global Power, Philippines
- Posco Energy - South Korea
- Kalimantan Lumbung Energi - Indonesia
- Meralco Power Generation, Philippines
- Renaissance Capital - South Africa
- ICICI Bank Limited - India
- The State Trading Corporation of India Ltd
- Jindal Steel & Power Ltd - India
- Coal and Oil Company - UAE
- Cement Manufacturers Association - India
- Samtan Co., Ltd - South Korea
- TNB Fuel Sdn Bhd - Malaysia
- Global Green Power PLC Corporation, Philippines
- Bangladesh Power Developement Board
- Bukit Makmur.PT - Indonesia
- Bukit Baiduri Energy - Indonesia
- PowerSource Philippines DevCo
- Timah Investasi Mineral - Indoneisa
- Standard Chartered Bank - UAE
- Central Java Power - Indonesia
- Petron Corporation, Philippines
- Gujarat Electricity Regulatory Commission - India
- Bhushan Steel Limited - India
- Krishnapatnam Port Company Ltd. - India
- Attock Cement Pakistan Limited
- LBH Netherlands Bv - Netherlands
- Sree Jayajothi Cements Limited - India
- Mercuria Energy - Indonesia
- Edison Trading Spa - Italy
- Chettinad Cement Corporation Ltd - India
- Indika Energy - Indonesia
- Asmin Koalindo Tuhup - Indonesia
- Latin American Coal - Colombia
- Georgia Ports Authority, United States
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Agrawal Coal Company - India
- Vijayanagar Sugar Pvt Ltd - India
- Vedanta Resources Plc - India
- Karbindo Abesyapradhi - Indoneisa
- OPG Power Generation Pvt Ltd - India
- Videocon Industries ltd - India
- Formosa Plastics Group - Taiwan
- Indian Oil Corporation Limited
- Ministry of Finance - Indonesia
- Banpu Public Company Limited - Thailand
- Bharathi Cement Corporation - India
- Intertek Mineral Services - Indonesia
- Parliament of New Zealand
- Barasentosa Lestari - Indonesia
- Kumho Petrochemical, South Korea
- Bhatia International Limited - India
- New Zealand Coal & Carbon
- Marubeni Corporation - India
- Siam City Cement PLC, Thailand
- Cigading International Bulk Terminal - Indonesia
- Pipit Mutiara Jaya. PT, Indonesia
- Ambuja Cements Ltd - India
- Semirara Mining Corp, Philippines
- The Treasury - Australian Government
- SMG Consultants - Indonesia
- Borneo Indobara - Indonesia
- Antam Resourcindo - Indonesia
- Rio Tinto Coal - Australia
- Indogreen Group - Indonesia
- Sakthi Sugars Limited - India
- Kobexindo Tractors - Indoneisa
- Sindya Power Generating Company Private Ltd
- Thai Mozambique Logistica
- Electricity Generating Authority of Thailand
- Kepco SPC Power Corporation, Philippines
- GN Power Mariveles Coal Plant, Philippines
- Alfred C Toepfer International GmbH - Germany
- Electricity Authority, New Zealand
- Tamil Nadu electricity Board
- Global Business Power Corporation, Philippines
- IHS Mccloskey Coal Group - USA
- Economic Council, Georgia
- Energy Link Ltd, New Zealand
- Billiton Holdings Pty Ltd - Australia
- Orica Australia Pty. Ltd.
- Petrochimia International Co. Ltd.- Taiwan
- Ministry of Transport, Egypt
- Indo Tambangraya Megah - Indonesia
- Carbofer General Trading SA - India
- Price Waterhouse Coopers - Russia
- GMR Energy Limited - India
- Leighton Contractors Pty Ltd - Australia
- Star Paper Mills Limited - India
- Salva Resources Pvt Ltd - India
- Dalmia Cement Bharat India
- Directorate Of Revenue Intelligence - India
- India Bulls Power Limited - India
- Eastern Energy - Thailand
- Port Waratah Coal Services - Australia
- Gujarat Mineral Development Corp Ltd - India
- Thiess Contractors Indonesia
- Merrill Lynch Commodities Europe
- VISA Power Limited - India
- Grasim Industreis Ltd - India
- Planning Commission, India
- Orica Mining Services - Indonesia
- Riau Bara Harum - Indonesia
- Australian Coal Association
- Singapore Mercantile Exchange
- Pendopo Energi Batubara - Indonesia
- Energy Development Corp, Philippines
- GVK Power & Infra Limited - India
- Anglo American - United Kingdom
- Bulk Trading Sa - Switzerland
- Semirara Mining and Power Corporation, Philippines
- IEA Clean Coal Centre - UK
- South Luzon Thermal Energy Corporation
- CNBM International Corporation - China
- International Coal Ventures Pvt Ltd - India
- The University of Queensland
- Deloitte Consulting - India
- Commonwealth Bank - Australia
- Makarim & Taira - Indonesia
- Bayan Resources Tbk. - Indonesia
- Offshore Bulk Terminal Pte Ltd, Singapore
- TeaM Sual Corporation - Philippines
- PetroVietnam Power Coal Import and Supply Company
- Vizag Seaport Private Limited - India
- Indonesian Coal Mining Association
- Bhoruka Overseas - Indonesia
- Toyota Tsusho Corporation, Japan
- Aditya Birla Group - India
- London Commodity Brokers - England
- Bukit Asam (Persero) Tbk - Indonesia
- Interocean Group of Companies - India
- Africa Commodities Group - South Africa
- Maharashtra Electricity Regulatory Commission - India
- Kartika Selabumi Mining - Indonesia
- GAC Shipping (India) Pvt Ltd
- Independent Power Producers Association of India
- Mjunction Services Limited - India
- Ceylon Electricity Board - Sri Lanka
- Coalindo Energy - Indonesia
- Eastern Coal Council - USA
- Coastal Gujarat Power Limited - India
- Bahari Cakrawala Sebuku - Indonesia
- AsiaOL BioFuels Corp., Philippines
- Altura Mining Limited, Indonesia
- Meenaskhi Energy Private Limited - India
- PTC India Limited - India
- SN Aboitiz Power Inc, Philippines
- Ind-Barath Power Infra Limited - India
- Trasteel International SA, Italy
- Indian Energy Exchange, India
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- White Energy Company Limited
- Mercator Lines Limited - India
- McConnell Dowell - Australia
- Larsen & Toubro Limited - India
- Neyveli Lignite Corporation Ltd, - India
- Straits Asia Resources Limited - Singapore
- San Jose City I Power Corp, Philippines
- Therma Luzon, Inc, Philippines
- Baramulti Group, Indonesia
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Sinarmas Energy and Mining - Indonesia
- Gujarat Sidhee Cement - India
- Kohat Cement Company Ltd. - Pakistan
- Mintek Dendrill Indonesia
- Simpson Spence & Young - Indonesia
- Minerals Council of Australia
- Sarangani Energy Corporation, Philippines
- MS Steel International - UAE
- Holcim Trading Pte Ltd - Singapore
- Heidelberg Cement - Germany
- Medco Energi Mining Internasional
- ASAPP Information Group - India
- Karaikal Port Pvt Ltd - India
- Power Finance Corporation Ltd., India
- Globalindo Alam Lestari - Indonesia
- Jaiprakash Power Ventures ltd
- Jorong Barutama Greston.PT - Indonesia
- Chamber of Mines of South Africa
- Miang Besar Coal Terminal - Indonesia
- Lanco Infratech Ltd - India
- Binh Thuan Hamico - Vietnam
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Essar Steel Hazira Ltd - India
- European Bulk Services B.V. - Netherlands
- Romanian Commodities Exchange
- Malabar Cements Ltd - India
- Manunggal Multi Energi - Indonesia
- Xindia Steels Limited - India
- PNOC Exploration Corporation - Philippines
- Directorate General of MIneral and Coal - Indonesia
- Oldendorff Carriers - Singapore
- Sical Logistics Limited - India
- Ministry of Mines - Canada
- Siam City Cement - Thailand
- Rashtriya Ispat Nigam Limited - India
- Madhucon Powers Ltd - India
- Global Coal Blending Company Limited - Australia
- Central Electricity Authority - India
- Parry Sugars Refinery, India
- CIMB Investment Bank - Malaysia
- Goldman Sachs - Singapore
- Uttam Galva Steels Limited - India
- Maheswari Brothers Coal Limited - India
- Kideco Jaya Agung - Indonesia
- Iligan Light & Power Inc, Philippines
- Kapuas Tunggal Persada - Indonesia
- Bank of Tokyo Mitsubishi UFJ Ltd
- Metalloyd Limited - United Kingdom
- Aboitiz Power Corporation - Philippines
- Tata Chemicals Ltd - India
- Wilmar Investment Holdings
- Wood Mackenzie - Singapore
- Sojitz Corporation - Japan
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Australian Commodity Traders Exchange
- Savvy Resources Ltd - HongKong
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