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Wednesday, 03 October 18
SHIPPING MARKET INSIGHT - KATERINA RESTIS
 The bunker fuel supply and availability landscape is close to its transformation with the enforcement of the IMO’s global 0.5% fuel Sulphur content cap regulation from 1st of January, 2020. Shipowners will have to choose between available options for them to comply with the regulation, while refiners will have to make suitable changes to refinery configuration and production in response to market demand. Thus far all parties will have to decide on the most efficient and appropriate solution that will suit their operations and allow them to remain commercially sustainable in the long run.
The swipe from the present 3.5% to 0.5% Sulphur content marine fuel will practically be an overnight shift as refineries would need to continue production and supply of up to 3.5% marine fuel until the day regulation requirement kicks in. Global refining will face enormous logistics, storage and delivery issues, while ships will have to clean out fuel systems to avoid Sulphur contamination. Thus, there is a risk such quick swing to lead to a period of product shortages and inflated marine oil prices. According to data reported on average up to 2017, the shipping industry was consuming approximately 3.2m barrels p/d of HFO and 800k p/d of MGO. Accordingly, from 2020 onwards it is estimated that proportion will alter to 700k p/d of HFO to 3.4m barrels p/d of MGO. Obviously, the use of compliant Sulphur oil products will be the expensive solution for ship-owners that will either absorb the cost or possibly operators will try to pass the cost to Charterers via increased freight rates.
Simple refineries that produce a substantial share of their crude oil into HFO may face margin pressures, while complex refineries with greater infrastructures may potentially boost margins with larger production of low Sulphur products. IEA has stated that if refiners ran at similar utilization rates as of today, it would be unlikely to produce the essential volumes of gas oil. Particularly, if quantity rises to meet the required gas oil volumes, margins would be inevitably affected by shrinking profits.
Overall, oil majors and refineries will try to back up the bunker fuel demand ascending from the new regulation through several ways. Refiners may elevate ULSFO production by extracting low Sulphur fuel streams that are currently blended into LSFO or HSFO will be made available to the market as ULS FO. ExxonMobil, for example has introduced a product, Heavy Distillate Marine ECA 50 that can be consumed onboard like HFO and has only 0.1% Sulphur content. Furthermore, refiners have an issue of handling their surplus residue as this option comes with higher risk on returns of investment. This is due to the fact that oil demand is founded on shippers’ uptake of alternative options such as scrubber installation and LNG bunkering. Refiners can raise LNG bunker supplies in major bunkering hubs. In Singapore, Shell and ExxonMobil are working with Maritime and Port Authority of Singapore to supply LNG as fuel.
To sum up, in the scenario that refineries restrict the availability of HFO on expected higher margins from selling MGO, then vessels fitted with scrubbers might face challenges in relation to adequate supply of HFO. On the other hand, refineries worry that any surge in the use of MGO would head to excess quantity of HFO. For sure refineries are not rushing to big investments to change production set ups while ship-owners are still considering their options. It’s a dilemma for all parties and a puzzle to be solved.
By Katerina Restis
Tanker Chartering
Compiled by:
Intermodal Research & Valuations
Analysts:
Ms Eva Tzima
George Panagopoulos
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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- Power Finance Corporation Ltd., India
- White Energy Company Limited
- The State Trading Corporation of India Ltd
- Heidelberg Cement - Germany
- Petrochimia International Co. Ltd.- Taiwan
- TeaM Sual Corporation - Philippines
- Indian Energy Exchange, India
- Sindya Power Generating Company Private Ltd
- Madhucon Powers Ltd - India
- Bharathi Cement Corporation - India
- Parliament of New Zealand
- Lanco Infratech Ltd - India
- Manunggal Multi Energi - Indonesia
- Economic Council, Georgia
- Planning Commission, India
- South Luzon Thermal Energy Corporation
- Attock Cement Pakistan Limited
- Sakthi Sugars Limited - India
- Alfred C Toepfer International GmbH - Germany
- Edison Trading Spa - Italy
- Bukit Baiduri Energy - Indonesia
- LBH Netherlands Bv - Netherlands
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Tamil Nadu electricity Board
- Bayan Resources Tbk. - Indonesia
- Directorate Of Revenue Intelligence - India
- Sree Jayajothi Cements Limited - India
- Coastal Gujarat Power Limited - India
- Indonesian Coal Mining Association
- Indika Energy - Indonesia
- Chamber of Mines of South Africa
- Semirara Mining Corp, Philippines
- Meenaskhi Energy Private Limited - India
- Pipit Mutiara Jaya. PT, Indonesia
- PetroVietnam Power Coal Import and Supply Company
- Kobexindo Tractors - Indoneisa
- SMG Consultants - Indonesia
- Africa Commodities Group - South Africa
- Latin American Coal - Colombia
- Wilmar Investment Holdings
- VISA Power Limited - India
- SMC Global Power, Philippines
- Petron Corporation, Philippines
- Sinarmas Energy and Mining - Indonesia
- Anglo American - United Kingdom
- Maharashtra Electricity Regulatory Commission - India
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Kaltim Prima Coal - Indonesia
- GN Power Mariveles Coal Plant, Philippines
- GAC Shipping (India) Pvt Ltd
- Bukit Asam (Persero) Tbk - Indonesia
- The Treasury - Australian Government
- Sojitz Corporation - Japan
- Rashtriya Ispat Nigam Limited - India
- Renaissance Capital - South Africa
- Siam City Cement PLC, Thailand
- TNB Fuel Sdn Bhd - Malaysia
- Mjunction Services Limited - India
- ASAPP Information Group - India
- Trasteel International SA, Italy
- Asmin Koalindo Tuhup - Indonesia
- SN Aboitiz Power Inc, Philippines
- Central Java Power - Indonesia
- Star Paper Mills Limited - India
- Electricity Authority, New Zealand
- Bahari Cakrawala Sebuku - Indonesia
- Banpu Public Company Limited - Thailand
- Kideco Jaya Agung - Indonesia
- Global Coal Blending Company Limited - Australia
- Iligan Light & Power Inc, Philippines
- Ind-Barath Power Infra Limited - India
- Central Electricity Authority - India
- Eastern Coal Council - USA
- Coalindo Energy - Indonesia
- India Bulls Power Limited - India
- Antam Resourcindo - Indonesia
- Gujarat Electricity Regulatory Commission - India
- Billiton Holdings Pty Ltd - Australia
- Offshore Bulk Terminal Pte Ltd, Singapore
- Kepco SPC Power Corporation, Philippines
- Cigading International Bulk Terminal - Indonesia
- Kumho Petrochemical, South Korea
- Kohat Cement Company Ltd. - Pakistan
- Karbindo Abesyapradhi - Indoneisa
- Carbofer General Trading SA - India
- Energy Development Corp, Philippines
- IHS Mccloskey Coal Group - USA
- Mercuria Energy - Indonesia
- GMR Energy Limited - India
- Indogreen Group - Indonesia
- Ministry of Finance - Indonesia
- Pendopo Energi Batubara - Indonesia
- Maheswari Brothers Coal Limited - India
- Vizag Seaport Private Limited - India
- Aboitiz Power Corporation - Philippines
- Global Business Power Corporation, Philippines
- Aditya Birla Group - India
- Savvy Resources Ltd - HongKong
- Gujarat Mineral Development Corp Ltd - India
- Ministry of Mines - Canada
- Mercator Lines Limited - India
- Mintek Dendrill Indonesia
- Oldendorff Carriers - Singapore
- Bukit Makmur.PT - Indonesia
- Gujarat Sidhee Cement - India
- Kalimantan Lumbung Energi - Indonesia
- The University of Queensland
- Global Green Power PLC Corporation, Philippines
- Wood Mackenzie - Singapore
- Orica Mining Services - Indonesia
- Altura Mining Limited, Indonesia
- Toyota Tsusho Corporation, Japan
- Deloitte Consulting - India
- Orica Australia Pty. Ltd.
- Semirara Mining and Power Corporation, Philippines
- McConnell Dowell - Australia
- Meralco Power Generation, Philippines
- Price Waterhouse Coopers - Russia
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Videocon Industries ltd - India
- Bank of Tokyo Mitsubishi UFJ Ltd
- Marubeni Corporation - India
- Bhatia International Limited - India
- Binh Thuan Hamico - Vietnam
- New Zealand Coal & Carbon
- Merrill Lynch Commodities Europe
- Metalloyd Limited - United Kingdom
- OPG Power Generation Pvt Ltd - India
- Simpson Spence & Young - Indonesia
- Baramulti Group, Indonesia
- Standard Chartered Bank - UAE
- Barasentosa Lestari - Indonesia
- Eastern Energy - Thailand
- CNBM International Corporation - China
- Straits Asia Resources Limited - Singapore
- Borneo Indobara - Indonesia
- Interocean Group of Companies - India
- AsiaOL BioFuels Corp., Philippines
- Port Waratah Coal Services - Australia
- Essar Steel Hazira Ltd - India
- Therma Luzon, Inc, Philippines
- Directorate General of MIneral and Coal - Indonesia
- Sarangani Energy Corporation, Philippines
- Medco Energi Mining Internasional
- Minerals Council of Australia
- Indian Oil Corporation Limited
- Leighton Contractors Pty Ltd - Australia
- Holcim Trading Pte Ltd - Singapore
- Coal and Oil Company - UAE
- MS Steel International - UAE
- Siam City Cement - Thailand
- Larsen & Toubro Limited - India
- Kapuas Tunggal Persada - Indonesia
- Indo Tambangraya Megah - Indonesia
- Karaikal Port Pvt Ltd - India
- Parry Sugars Refinery, India
- Rio Tinto Coal - Australia
- ICICI Bank Limited - India
- Xindia Steels Limited - India
- Bhoruka Overseas - Indonesia
- Agrawal Coal Company - India
- Australian Commodity Traders Exchange
- Jorong Barutama Greston.PT - Indonesia
- Neyveli Lignite Corporation Ltd, - India
- Miang Besar Coal Terminal - Indonesia
- Goldman Sachs - Singapore
- Posco Energy - South Korea
- Jindal Steel & Power Ltd - India
- European Bulk Services B.V. - Netherlands
- Energy Link Ltd, New Zealand
- GVK Power & Infra Limited - India
- Cement Manufacturers Association - India
- PowerSource Philippines DevCo
- Singapore Mercantile Exchange
- Samtan Co., Ltd - South Korea
- Electricity Generating Authority of Thailand
- Globalindo Alam Lestari - Indonesia
- Georgia Ports Authority, United States
- Jaiprakash Power Ventures ltd
- Australian Coal Association
- Bhushan Steel Limited - India
- Thai Mozambique Logistica
- Timah Investasi Mineral - Indoneisa
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Makarim & Taira - Indonesia
- Vedanta Resources Plc - India
- IEA Clean Coal Centre - UK
- PNOC Exploration Corporation - Philippines
- Bangladesh Power Developement Board
- Kartika Selabumi Mining - Indonesia
- San Jose City I Power Corp, Philippines
- Ceylon Electricity Board - Sri Lanka
- London Commodity Brokers - England
- Riau Bara Harum - Indonesia
- Independent Power Producers Association of India
- PTC India Limited - India
- Ministry of Transport, Egypt
- Uttam Galva Steels Limited - India
- International Coal Ventures Pvt Ltd - India
- Commonwealth Bank - Australia
- CIMB Investment Bank - Malaysia
- Sical Logistics Limited - India
- Krishnapatnam Port Company Ltd. - India
- Tata Chemicals Ltd - India
- Grasim Industreis Ltd - India
- Romanian Commodities Exchange
- Salva Resources Pvt Ltd - India
- Formosa Plastics Group - Taiwan
- Ambuja Cements Ltd - India
- Bulk Trading Sa - Switzerland
- Vijayanagar Sugar Pvt Ltd - India
- Intertek Mineral Services - Indonesia
- Chettinad Cement Corporation Ltd - India
- Thiess Contractors Indonesia
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Dalmia Cement Bharat India
- Malabar Cements Ltd - India
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