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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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- Kepco SPC Power Corporation, Philippines
- Sojitz Corporation - Japan
- Pipit Mutiara Jaya. PT, Indonesia
- Vedanta Resources Plc - India
- Kohat Cement Company Ltd. - Pakistan
- Samtan Co., Ltd - South Korea
- Bank of Tokyo Mitsubishi UFJ Ltd
- Mintek Dendrill Indonesia
- Bukit Makmur.PT - Indonesia
- Bukit Baiduri Energy - Indonesia
- Independent Power Producers Association of India
- Petron Corporation, Philippines
- CIMB Investment Bank - Malaysia
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Anglo American - United Kingdom
- Madhucon Powers Ltd - India
- Energy Link Ltd, New Zealand
- Planning Commission, India
- Sakthi Sugars Limited - India
- Bhoruka Overseas - Indonesia
- Wood Mackenzie - Singapore
- Coal and Oil Company - UAE
- India Bulls Power Limited - India
- Standard Chartered Bank - UAE
- The State Trading Corporation of India Ltd
- Malabar Cements Ltd - India
- Wilmar Investment Holdings
- Indian Oil Corporation Limited
- Ambuja Cements Ltd - India
- Kobexindo Tractors - Indoneisa
- Borneo Indobara - Indonesia
- Binh Thuan Hamico - Vietnam
- Attock Cement Pakistan Limited
- Straits Asia Resources Limited - Singapore
- PowerSource Philippines DevCo
- Rio Tinto Coal - Australia
- Electricity Authority, New Zealand
- Aboitiz Power Corporation - Philippines
- Meralco Power Generation, Philippines
- GVK Power & Infra Limited - India
- Sindya Power Generating Company Private Ltd
- GN Power Mariveles Coal Plant, Philippines
- Grasim Industreis Ltd - India
- Port Waratah Coal Services - Australia
- Kartika Selabumi Mining - Indonesia
- Interocean Group of Companies - India
- Edison Trading Spa - Italy
- Marubeni Corporation - India
- Offshore Bulk Terminal Pte Ltd, Singapore
- South Luzon Thermal Energy Corporation
- Indogreen Group - Indonesia
- Krishnapatnam Port Company Ltd. - India
- Singapore Mercantile Exchange
- Indonesian Coal Mining Association
- Ministry of Transport, Egypt
- Power Finance Corporation Ltd., India
- International Coal Ventures Pvt Ltd - India
- PTC India Limited - India
- Semirara Mining and Power Corporation, Philippines
- Antam Resourcindo - Indonesia
- TNB Fuel Sdn Bhd - Malaysia
- Global Business Power Corporation, Philippines
- Timah Investasi Mineral - Indoneisa
- Renaissance Capital - South Africa
- Siam City Cement PLC, Thailand
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Parliament of New Zealand
- Directorate General of MIneral and Coal - Indonesia
- Australian Coal Association
- Billiton Holdings Pty Ltd - Australia
- SMC Global Power, Philippines
- Siam City Cement - Thailand
- CNBM International Corporation - China
- Price Waterhouse Coopers - Russia
- Petrochimia International Co. Ltd.- Taiwan
- Carbofer General Trading SA - India
- Leighton Contractors Pty Ltd - Australia
- Manunggal Multi Energi - Indonesia
- Uttam Galva Steels Limited - India
- Global Coal Blending Company Limited - Australia
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Romanian Commodities Exchange
- Africa Commodities Group - South Africa
- Coastal Gujarat Power Limited - India
- Ministry of Finance - Indonesia
- Bahari Cakrawala Sebuku - Indonesia
- Larsen & Toubro Limited - India
- Central Electricity Authority - India
- GMR Energy Limited - India
- Therma Luzon, Inc, Philippines
- Energy Development Corp, Philippines
- Posco Energy - South Korea
- Cigading International Bulk Terminal - Indonesia
- Lanco Infratech Ltd - India
- Agrawal Coal Company - India
- Iligan Light & Power Inc, Philippines
- Pendopo Energi Batubara - Indonesia
- McConnell Dowell - Australia
- Minerals Council of Australia
- Medco Energi Mining Internasional
- Indo Tambangraya Megah - Indonesia
- Sree Jayajothi Cements Limited - India
- Star Paper Mills Limited - India
- Eastern Coal Council - USA
- Bulk Trading Sa - Switzerland
- Toyota Tsusho Corporation, Japan
- Bharathi Cement Corporation - India
- VISA Power Limited - India
- Maharashtra Electricity Regulatory Commission - India
- Bayan Resources Tbk. - Indonesia
- Karaikal Port Pvt Ltd - India
- Meenaskhi Energy Private Limited - India
- AsiaOL BioFuels Corp., Philippines
- Eastern Energy - Thailand
- Chamber of Mines of South Africa
- Alfred C Toepfer International GmbH - Germany
- MS Steel International - UAE
- Xindia Steels Limited - India
- Bukit Asam (Persero) Tbk - Indonesia
- Gujarat Electricity Regulatory Commission - India
- Gujarat Sidhee Cement - India
- Altura Mining Limited, Indonesia
- Latin American Coal - Colombia
- Sical Logistics Limited - India
- San Jose City I Power Corp, Philippines
- Directorate Of Revenue Intelligence - India
- TeaM Sual Corporation - Philippines
- Savvy Resources Ltd - HongKong
- Makarim & Taira - Indonesia
- Baramulti Group, Indonesia
- Neyveli Lignite Corporation Ltd, - India
- Gujarat Mineral Development Corp Ltd - India
- Tamil Nadu electricity Board
- Indian Energy Exchange, India
- Tata Chemicals Ltd - India
- The Treasury - Australian Government
- Essar Steel Hazira Ltd - India
- ASAPP Information Group - India
- Merrill Lynch Commodities Europe
- GAC Shipping (India) Pvt Ltd
- Coalindo Energy - Indonesia
- Jaiprakash Power Ventures ltd
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Bhushan Steel Limited - India
- Miang Besar Coal Terminal - Indonesia
- The University of Queensland
- Parry Sugars Refinery, India
- Deloitte Consulting - India
- Sarangani Energy Corporation, Philippines
- Mjunction Services Limited - India
- Heidelberg Cement - Germany
- Orica Australia Pty. Ltd.
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Oldendorff Carriers - Singapore
- London Commodity Brokers - England
- New Zealand Coal & Carbon
- Thiess Contractors Indonesia
- Vijayanagar Sugar Pvt Ltd - India
- Semirara Mining Corp, Philippines
- LBH Netherlands Bv - Netherlands
- Chettinad Cement Corporation Ltd - India
- Cement Manufacturers Association - India
- Goldman Sachs - Singapore
- Australian Commodity Traders Exchange
- Orica Mining Services - Indonesia
- Salva Resources Pvt Ltd - India
- European Bulk Services B.V. - Netherlands
- Barasentosa Lestari - Indonesia
- Riau Bara Harum - Indonesia
- Ministry of Mines - Canada
- Banpu Public Company Limited - Thailand
- Dalmia Cement Bharat India
- PetroVietnam Power Coal Import and Supply Company
- IHS Mccloskey Coal Group - USA
- Vizag Seaport Private Limited - India
- Intertek Mineral Services - Indonesia
- Mercuria Energy - Indonesia
- PNOC Exploration Corporation - Philippines
- Aditya Birla Group - India
- Mercator Lines Limited - India
- Holcim Trading Pte Ltd - Singapore
- Rashtriya Ispat Nigam Limited - India
- Kideco Jaya Agung - Indonesia
- Kapuas Tunggal Persada - Indonesia
- Jorong Barutama Greston.PT - Indonesia
- Global Green Power PLC Corporation, Philippines
- Sinarmas Energy and Mining - Indonesia
- Central Java Power - Indonesia
- Electricity Generating Authority of Thailand
- Ind-Barath Power Infra Limited - India
- Videocon Industries ltd - India
- Thai Mozambique Logistica
- Bhatia International Limited - India
- Formosa Plastics Group - Taiwan
- White Energy Company Limited
- ICICI Bank Limited - India
- Indika Energy - Indonesia
- IEA Clean Coal Centre - UK
- Economic Council, Georgia
- Bangladesh Power Developement Board
- Simpson Spence & Young - Indonesia
- Karbindo Abesyapradhi - Indoneisa
- OPG Power Generation Pvt Ltd - India
- SMG Consultants - Indonesia
- Kaltim Prima Coal - Indonesia
- Asmin Koalindo Tuhup - Indonesia
- Commonwealth Bank - Australia
- Georgia Ports Authority, United States
- Maheswari Brothers Coal Limited - India
- Ceylon Electricity Board - Sri Lanka
- SN Aboitiz Power Inc, Philippines
- Globalindo Alam Lestari - Indonesia
- Kalimantan Lumbung Energi - Indonesia
- Kumho Petrochemical, South Korea
- Jindal Steel & Power Ltd - India
- Trasteel International SA, Italy
- Metalloyd Limited - United Kingdom
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