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Saturday, 22 February 20
THE SURPRISING MOVE IN MARINE FUEL SPREADS - ING
Middle distillates tank
One of the biggest surprises since the implementation of new International Maritime Organization (IMO) sulphur regulations is the weakness we have seen in the middle distillate market. Expectations were that we would see a large share of the shipping industry shift to marine gasoil, which would be a bullish scenario for middle distillate cracks. Instead, gasoil cracks are trading at levels last seen in 2017, falling by more than 50% from their October 2019 highs. A milder than usual winter, and the outbreak of the COVID-19 virus are just two factors adding further pressure on middle distillates.
However, from a shipping perspective, one of the key reasons why we have not seen strength in the market is the fact that demand for very low sulphur fuel oil (VLSFO) has been stronger than expected. As a result, the pick-up in marine gasoil demand has not been as much as anticipated. This has happened despite several reports of off-spec VLSFO. There also appears to be an element of hesitancy to more towards marine gasoil, with concerns over viscosity. This is evident in Asia, where we have seen VLSFO actually trading at a premium to marine gasoil.
Fuel oil cracks rally
While we have seen weakness in middle of the barrel products, fuel oil has strengthened, defying market expectations. The prompt crack in NW Europe has traded from around a US$30/bbl discount late last year to less than a US$15/bbl discount currently. There are several reasons behind this strength.
Firstly, refiners would have made any adjustments they could, be it through refinery upgrades, or adjusting feedstock accordingly to minimise HSFO yields as we moved into 2020.
Secondly, there has been increased interest from US refiners to process HSFO and, looking at fuel oil imports into the US over the last few months, particularly towards the end of 2019, volumes did increase. This move does also appear to reflect the limited availability of heavier crude grades for refiners in the US Gulf, given US sanctions against Venezuela.
Thirdly, and this certainly shouldn’t come as too much of a surprise, we see more ships with scrubbers installed coming online. This would provide some additional support to the demand picture for HSFO. The coronavirus could even have an impact here, with a potential delay in scrubber installations.
Finally, a factor which was more of a risk than a reality was the potential for the US not to extend waivers which allow Iraq to import natural gas and electricity from Iran. If this were to happen, it would likely mean that Iraqi domestic fuel oil consumption would increase for power generation needs, so reducing export availability of fuel oil from the country. The risk of this happening has eased, however, with the US recently extending waivers by another 45 days.
China VLSFO supply set to rise
The VLSFO market was performing well until news that China would provide tax waivers to refiners in the country for lower sulphur fuel oil production, which has set the path for VLSFO output in China to grow. Already there are reports that PetroChina has delivered volumes of VLSFO into bonded storage, where it will likely be retailed to ships. The idea is that China wants to build its capabilities as a bunkering hub, rather than wholesale exports of VLSFO.
What has this all meant for spreads?
The above dynamics have had an impact on marine fuel spreads. The more bearish environment we have seen in the middle distillate market, along with a more constructive HSFO market, has meant that the spot NW Europe gasoil-HSFO spread has narrowed from around US$400/t at certain stages last year to around US$235/t currently. Meanwhile, pressure from potential Chinese VLSFO supply has had a similar impact on the spot VLSFO-HSFO spread, with it falling from a high of US$290/t late last year to around US$165/t currently. Obviously, these narrower spreads increase the payback period for a scrubber, making the economics of an installation not as attractive as it looked last year.
As we see more scrubber fitted ships coming online, it will increasingly eat into the advantage of burning HSFO. Therefore, we believe the spreads are unlikely to trade back out to the highs seen last year.
Source: ING
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Wednesday, 26 February 20
SHIPPING MARKET INSIGHT - INTERMODAL
Coming from one of its busiest periods historically, with a list of scrubber and BWMS retrofits on a waiting list, the ship repair sector is witnes ...
Wednesday, 26 February 20
AS ALL OF THE GLOBAL COAL GIANTS EXIT SOUTH AFRICA, ESKOM TO DEPEND ON TWO MINERS FOR 70% OF ITS SUPPLY - BUSINESS INSIDER
While some of its politicians continue to imagine that coal has a future in South Africa, two key developments from the real world show that securi ...
Tuesday, 25 February 20
DELTA DUNIA MAKMUR REGISTERED A NET PROFIT OF US$20 MILLION FOR FY 2019
PT Delta Dunia Makmur, one of the largest coal mining company in Indonesia, has recorded an US$882 million revenue for FY 2019, 1% lower compared t ...
Tuesday, 25 February 20
SHIPPING UPDATE - ALLIED
The positive feeling and optimism for a fresh rally during the first few months of 2020 that prevailed in the tanker markets during the final quart ...
Monday, 24 February 20
COULD SOME VLSFO FUELS BE BANNED? - GIBSON
The run up to the implementation of the new IMO rules on marine fuels from1st January 2020 had owners and charterers analysing the vari ...
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Showing 1106 to 1110 news of total 6871 |
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- Oldendorff Carriers - Singapore
- OPG Power Generation Pvt Ltd - India
- Toyota Tsusho Corporation, Japan
- Sakthi Sugars Limited - India
- Directorate Of Revenue Intelligence - India
- Orica Australia Pty. Ltd.
- Sical Logistics Limited - India
- Australian Coal Association
- Asmin Koalindo Tuhup - Indonesia
- Semirara Mining and Power Corporation, Philippines
- Larsen & Toubro Limited - India
- Kaltim Prima Coal - Indonesia
- Romanian Commodities Exchange
- Bukit Makmur.PT - Indonesia
- Thiess Contractors Indonesia
- Edison Trading Spa - Italy
- Bukit Asam (Persero) Tbk - Indonesia
- PetroVietnam Power Coal Import and Supply Company
- Bharathi Cement Corporation - India
- Standard Chartered Bank - UAE
- AsiaOL BioFuels Corp., Philippines
- Indo Tambangraya Megah - Indonesia
- CNBM International Corporation - China
- Medco Energi Mining Internasional
- Africa Commodities Group - South Africa
- Altura Mining Limited, Indonesia
- Ambuja Cements Ltd - India
- Singapore Mercantile Exchange
- Madhucon Powers Ltd - India
- Sindya Power Generating Company Private Ltd
- GVK Power & Infra Limited - India
- Georgia Ports Authority, United States
- SN Aboitiz Power Inc, Philippines
- PNOC Exploration Corporation - Philippines
- Billiton Holdings Pty Ltd - Australia
- PTC India Limited - India
- TeaM Sual Corporation - Philippines
- Banpu Public Company Limited - Thailand
- Globalindo Alam Lestari - Indonesia
- Gujarat Sidhee Cement - India
- Bhushan Steel Limited - India
- Wilmar Investment Holdings
- Salva Resources Pvt Ltd - India
- Uttam Galva Steels Limited - India
- Independent Power Producers Association of India
- Kapuas Tunggal Persada - Indonesia
- Timah Investasi Mineral - Indoneisa
- Neyveli Lignite Corporation Ltd, - India
- The University of Queensland
- Power Finance Corporation Ltd., India
- Gujarat Mineral Development Corp Ltd - India
- Marubeni Corporation - India
- GN Power Mariveles Coal Plant, Philippines
- Bhatia International Limited - India
- Straits Asia Resources Limited - Singapore
- White Energy Company Limited
- Rio Tinto Coal - Australia
- ASAPP Information Group - India
- Bahari Cakrawala Sebuku - Indonesia
- Pipit Mutiara Jaya. PT, Indonesia
- Central Electricity Authority - India
- Lanco Infratech Ltd - India
- Holcim Trading Pte Ltd - Singapore
- Heidelberg Cement - Germany
- Energy Link Ltd, New Zealand
- Meenaskhi Energy Private Limited - India
- Star Paper Mills Limited - India
- Savvy Resources Ltd - HongKong
- Kepco SPC Power Corporation, Philippines
- Economic Council, Georgia
- Essar Steel Hazira Ltd - India
- Eastern Energy - Thailand
- Renaissance Capital - South Africa
- Indonesian Coal Mining Association
- Sinarmas Energy and Mining - Indonesia
- South Luzon Thermal Energy Corporation
- Deloitte Consulting - India
- Pendopo Energi Batubara - Indonesia
- Port Waratah Coal Services - Australia
- Samtan Co., Ltd - South Korea
- Ministry of Mines - Canada
- Ceylon Electricity Board - Sri Lanka
- Coalindo Energy - Indonesia
- LBH Netherlands Bv - Netherlands
- Wood Mackenzie - Singapore
- Bayan Resources Tbk. - Indonesia
- Australian Commodity Traders Exchange
- Energy Development Corp, Philippines
- Cement Manufacturers Association - India
- Anglo American - United Kingdom
- Vedanta Resources Plc - India
- Rashtriya Ispat Nigam Limited - India
- Sree Jayajothi Cements Limited - India
- India Bulls Power Limited - India
- Ind-Barath Power Infra Limited - India
- Maheswari Brothers Coal Limited - India
- Price Waterhouse Coopers - Russia
- Malabar Cements Ltd - India
- Gujarat Electricity Regulatory Commission - India
- Jindal Steel & Power Ltd - India
- Siam City Cement - Thailand
- GMR Energy Limited - India
- Ministry of Transport, Egypt
- Coal and Oil Company - UAE
- Karbindo Abesyapradhi - Indoneisa
- Central Java Power - Indonesia
- Electricity Authority, New Zealand
- Meralco Power Generation, Philippines
- Kobexindo Tractors - Indoneisa
- Alfred C Toepfer International GmbH - Germany
- Therma Luzon, Inc, Philippines
- Directorate General of MIneral and Coal - Indonesia
- Eastern Coal Council - USA
- Indian Oil Corporation Limited
- Formosa Plastics Group - Taiwan
- Parry Sugars Refinery, India
- Chamber of Mines of South Africa
- McConnell Dowell - Australia
- Makarim & Taira - Indonesia
- Commonwealth Bank - Australia
- Indogreen Group - Indonesia
- Videocon Industries ltd - India
- Aditya Birla Group - India
- Vizag Seaport Private Limited - India
- IHS Mccloskey Coal Group - USA
- Kohat Cement Company Ltd. - Pakistan
- International Coal Ventures Pvt Ltd - India
- Planning Commission, India
- GAC Shipping (India) Pvt Ltd
- Bulk Trading Sa - Switzerland
- Kideco Jaya Agung - Indonesia
- Cigading International Bulk Terminal - Indonesia
- Interocean Group of Companies - India
- Metalloyd Limited - United Kingdom
- Bangladesh Power Developement Board
- Offshore Bulk Terminal Pte Ltd, Singapore
- Ministry of Finance - Indonesia
- Petrochimia International Co. Ltd.- Taiwan
- Antam Resourcindo - Indonesia
- Riau Bara Harum - Indonesia
- Mercuria Energy - Indonesia
- VISA Power Limited - India
- Agrawal Coal Company - India
- Siam City Cement PLC, Thailand
- PowerSource Philippines DevCo
- Intertek Mineral Services - Indonesia
- Kalimantan Lumbung Energi - Indonesia
- Vijayanagar Sugar Pvt Ltd - India
- Binh Thuan Hamico - Vietnam
- Mjunction Services Limited - India
- The State Trading Corporation of India Ltd
- Sojitz Corporation - Japan
- Posco Energy - South Korea
- Indika Energy - Indonesia
- Maharashtra Electricity Regulatory Commission - India
- Manunggal Multi Energi - Indonesia
- The Treasury - Australian Government
- Electricity Generating Authority of Thailand
- Tata Chemicals Ltd - India
- Aboitiz Power Corporation - Philippines
- Chettinad Cement Corporation Ltd - India
- European Bulk Services B.V. - Netherlands
- Semirara Mining Corp, Philippines
- Carbofer General Trading SA - India
- Jaiprakash Power Ventures ltd
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Bukit Baiduri Energy - Indonesia
- Krishnapatnam Port Company Ltd. - India
- Minerals Council of Australia
- Thai Mozambique Logistica
- Miang Besar Coal Terminal - Indonesia
- London Commodity Brokers - England
- Simpson Spence & Young - Indonesia
- Mercator Lines Limited - India
- Trasteel International SA, Italy
- Leighton Contractors Pty Ltd - Australia
- New Zealand Coal & Carbon
- Latin American Coal - Colombia
- San Jose City I Power Corp, Philippines
- SMG Consultants - Indonesia
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Karaikal Port Pvt Ltd - India
- Tamil Nadu electricity Board
- Jorong Barutama Greston.PT - Indonesia
- Baramulti Group, Indonesia
- SMC Global Power, Philippines
- CIMB Investment Bank - Malaysia
- TNB Fuel Sdn Bhd - Malaysia
- Xindia Steels Limited - India
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Global Green Power PLC Corporation, Philippines
- IEA Clean Coal Centre - UK
- Bank of Tokyo Mitsubishi UFJ Ltd
- Petron Corporation, Philippines
- Coastal Gujarat Power Limited - India
- Kumho Petrochemical, South Korea
- Attock Cement Pakistan Limited
- Iligan Light & Power Inc, Philippines
- Indian Energy Exchange, India
- Global Coal Blending Company Limited - Australia
- Sarangani Energy Corporation, Philippines
- Goldman Sachs - Singapore
- Dalmia Cement Bharat India
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Mintek Dendrill Indonesia
- Global Business Power Corporation, Philippines
- Merrill Lynch Commodities Europe
- Barasentosa Lestari - Indonesia
- MS Steel International - UAE
- Borneo Indobara - Indonesia
- Bhoruka Overseas - Indonesia
- ICICI Bank Limited - India
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Parliament of New Zealand
- Kartika Selabumi Mining - Indonesia
- Grasim Industreis Ltd - India
- Orica Mining Services - Indonesia
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