We welcome article submissions from experts in the areas of coal, mining,
shipping, etc.
To Submit your article please click here.
|
|
|
Saturday, 11 December 21
BUNKER BUYERS LOSE UP TO $5/MT FOR NOT COVERING ENOUGH SUPPLIERS - INTEGR8 FUELS
With the Brent price recently touching the $80 mark and before the Omicron variant concerns pushed it lower, bunker prices reached levels not seen since early 2020. Following the OPEC+ decision not to release additional crude oil volumes on the market and continuing to add to existing supply gradually, we may see more oil price increases going forward, particularly if Omicron proves to be less deadly as initially thought and given the current tight oil supply and demand balance.
The process of buying bunker fuel is essentially a reverse auction where more participants often mean a better price achieved, which is particularly important in the high oil price environment. In this article, we discuss the reasons and quantify the impact of low supplier coverage and response rate on the price paid and look into the ways to get more suppliers to quote.
More suppliers quoting means lower price paid…
We analysed a sample of over 250 Integr8 Fuels stems fixed so far in 2021 covering the hubs of ARA, Gibralter Straits and Malta which are served by multiple suppliers. For each stem, only the larger quantity fuel was analysed (often VLSFO or HSFO, unless a single LSMGO grade was procured) as supplier coverage in the dual fuel stems often depends on the main larger quantity grade.
Figure 1. shows the relationship between the supplier response rate (the share of suppliers quoting a price in the total number of suppliers) and the average premium or discount paid over the bunker benchmark price provided by ENGINE.
It is evident that, on average, stems with less than 20% of suppliers quoting were fixed at a slight premium to the benchmark, while stems with over 60% of suppliers quoting were fixed at significant discounts, hence having more suppliers’ quotes resulted in an average savings of up to $5/mt. And there are a number of ways to achieve such savings.
To visually represent this, all the stems have been mapped for supplier coverage and response rate with stems falling into three distinct categories (Figure 2.). Around 30% of stems fall into the first category, where both supplier coverage and response rates were low, including most of the stems with one supplier. Stems in this category were on average fixed with a $0.2/mt discount to the ENGINE benchmark price.
Intuitively, an over payment could be expected, however, the small discount was mostly due to a number of large quantity fixtures that usually attract good prices. The stems in the second category, which constitute around 15% of all stems, had good a supplier coverage but a low response rate.These are characterised by their smaller size, shorter lead time and a small discount to the benchmark of $0.3/mt. A lot of these fixtures were done for same day delivery. Lastly, in the third category are the stems with a good supplier coverage and response rate -these on average achieved a much larger discount of $3.4/mt to the benchmark and this is the category where more fixtures should be aiming to be.
Interestingly, we found a number of stems with the high supplier coverage and response rate yet with sizeable over-payments beyond the ENGINE benchmark pricing. The main reason for this was found to be the limitation imposed by some companies in the wake of the IMO2020 change on the acceptable levels of sulphur and viscosity when buying VLSFO. While in some instances such limitations helped to avoid buying fuel that was more likely to test off-spec or cause issues on board vessels, in others this meant that some suppliers offering lower prices were being disqualified on the basis of provisional certificates of quality which were not always representative of the delivered fuel quality. A similar trend was spotted among the minority of stems where a certain spec was requested, for example ISO8217:2017.
Overall, the data shows that increasing the lead time and stem quantity, avoiding out of hours and weekend enquiries, being flexible with the fuel specs where operationally possible and safe to do so, can help increase suppliers’ response and achieve a better price paid. Moving beyond the stem sample analysed, another typical reason for sub-optimal supplier coverage is that some companies only prefer to deal with a limited number of physical suppliers directly.
Traders can help increase supplier coverage
Direct business is often perceived as the only way to achieve low prices as it cuts the middleman from the equation. This does work well for large companies buying substantial volumes of bunkers globally who have the resources to negotiate prices, set up and maintain credit lines with the hundreds of suppliers globally. However, the reality is that a lot of medium and smaller companies may only be dealing with a handful of suppliers directly thus not covering the whole market. This significantly limits their bargaining power. A trader can not only cover the rest of the market but also act as insurance policy should the company’s own credit lines with suppliers become tight, particularly in the rising oil price environment.
Long gone the days when traders were matching sellers with buyers. In recent years, investment has been going into gathering data, setting up systems, news flow and analytics. While receiving quotes and sending back counteroffers to five suppliers may not sound too complex, a trader may have a system that allows to compare supplier quotations on the weighted by fuel grade average price while also considering suppliers’ historical claims, density short lifts, recent quality issues and fuel energy content. These days a trader can not only cover every supplier in the market but also warn about supply delays (as no one wants their $40,000/day earning bulk carrier to go off hire waiting for bunker supplies), worsening weather conditions, help prevent claims, bundle up several enquiries to achieve volume discounts and even help with bunker planning and suggest the most optimal port or combination of ports to bunker your vessel.
Source: Integr8 Fuels
If you believe an article violates your rights or the rights of others, please contact us.
|
|
Monday, 31 October 22
U.S. COAL-FIRED GENERATION DECLINING AFTER BRIEF RISE LAST YEAR - EIA
We expect 6% less U.S. coal-fired generation in 2022 than in 2021, according to our latest Short-Term Energy Outlook (STEO). Although coal-fired ge ...
Monday, 31 October 22
CHINA COAL OUTPUT UP 12.3 PCT IN SEPTEMBER - XINHUA
China’s raw coal output posted stable expansion in September, official data showed.
The country produced 390 million tonnes of ...
Wednesday, 26 October 22
BIMCO PUBLISHES UPDATED GENCON CONTRACT
BIMCO has published a revised and updated version GENCON 2022 – one of its flagship contracts within its portfolio of standard contracts for ...
Monday, 24 October 22
KOSPO TO INVITE 400,000 MT OF COAL FOR 3 YEARS
COALspot.com: Korea Southern Power Co., Ltd. (KOSPO) has issued an international tender for 400,000 MT of 3,800 - 4,400kcal/kg NCV and Sulfur Max 0 ...
Wednesday, 19 October 22
ASIA COULD BE A BRIGHT SPOT AMID GLOBAL DOWNTURN NEXT YEAR, ECONOMISTS SAY - CNBC
Asia — especially Southeast Asia — remains a bright spot, even as the global economy looks set to head into recession next year, econom ...
|
|
|
Showing 201 to 205 news of total 6871 |
|
 |
|
|
|
|
| |
|
 |
|
|
| |
|
- Holcim Trading Pte Ltd - Singapore
- OPG Power Generation Pvt Ltd - India
- Maharashtra Electricity Regulatory Commission - India
- International Coal Ventures Pvt Ltd - India
- Billiton Holdings Pty Ltd - Australia
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Ambuja Cements Ltd - India
- Straits Asia Resources Limited - Singapore
- Asmin Koalindo Tuhup - Indonesia
- Power Finance Corporation Ltd., India
- Aboitiz Power Corporation - Philippines
- SMC Global Power, Philippines
- Pendopo Energi Batubara - Indonesia
- Baramulti Group, Indonesia
- Attock Cement Pakistan Limited
- Sojitz Corporation - Japan
- Bharathi Cement Corporation - India
- Planning Commission, India
- Global Green Power PLC Corporation, Philippines
- White Energy Company Limited
- Posco Energy - South Korea
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Kohat Cement Company Ltd. - Pakistan
- Parliament of New Zealand
- Rio Tinto Coal - Australia
- Coal and Oil Company - UAE
- Videocon Industries ltd - India
- Bukit Makmur.PT - Indonesia
- Ministry of Mines - Canada
- Alfred C Toepfer International GmbH - Germany
- Altura Mining Limited, Indonesia
- TeaM Sual Corporation - Philippines
- Petrochimia International Co. Ltd.- Taiwan
- Grasim Industreis Ltd - India
- Cement Manufacturers Association - India
- GN Power Mariveles Coal Plant, Philippines
- Semirara Mining Corp, Philippines
- The University of Queensland
- Intertek Mineral Services - Indonesia
- Australian Commodity Traders Exchange
- Kalimantan Lumbung Energi - Indonesia
- SMG Consultants - Indonesia
- PTC India Limited - India
- Kaltim Prima Coal - Indonesia
- Indo Tambangraya Megah - Indonesia
- Interocean Group of Companies - India
- CIMB Investment Bank - Malaysia
- Timah Investasi Mineral - Indoneisa
- Meralco Power Generation, Philippines
- Chamber of Mines of South Africa
- Malabar Cements Ltd - India
- Kideco Jaya Agung - Indonesia
- Sree Jayajothi Cements Limited - India
- TNB Fuel Sdn Bhd - Malaysia
- Orica Mining Services - Indonesia
- Jindal Steel & Power Ltd - India
- Marubeni Corporation - India
- Port Waratah Coal Services - Australia
- Xindia Steels Limited - India
- Formosa Plastics Group - Taiwan
- Aditya Birla Group - India
- Independent Power Producers Association of India
- Essar Steel Hazira Ltd - India
- Thiess Contractors Indonesia
- Binh Thuan Hamico - Vietnam
- Coastal Gujarat Power Limited - India
- Barasentosa Lestari - Indonesia
- Savvy Resources Ltd - HongKong
- Agrawal Coal Company - India
- Simpson Spence & Young - Indonesia
- Electricity Authority, New Zealand
- Siam City Cement - Thailand
- Sarangani Energy Corporation, Philippines
- Lanco Infratech Ltd - India
- London Commodity Brokers - England
- Borneo Indobara - Indonesia
- GAC Shipping (India) Pvt Ltd
- AsiaOL BioFuels Corp., Philippines
- Ministry of Transport, Egypt
- Sindya Power Generating Company Private Ltd
- Petron Corporation, Philippines
- Vijayanagar Sugar Pvt Ltd - India
- Meenaskhi Energy Private Limited - India
- Gujarat Electricity Regulatory Commission - India
- Australian Coal Association
- Goldman Sachs - Singapore
- New Zealand Coal & Carbon
- GMR Energy Limited - India
- Makarim & Taira - Indonesia
- Eastern Energy - Thailand
- Kumho Petrochemical, South Korea
- PNOC Exploration Corporation - Philippines
- Bangladesh Power Developement Board
- Coalindo Energy - Indonesia
- Kapuas Tunggal Persada - Indonesia
- Indonesian Coal Mining Association
- Sical Logistics Limited - India
- Singapore Mercantile Exchange
- Indogreen Group - Indonesia
- Mjunction Services Limited - India
- Bukit Baiduri Energy - Indonesia
- Mercuria Energy - Indonesia
- Cigading International Bulk Terminal - Indonesia
- Kepco SPC Power Corporation, Philippines
- Merrill Lynch Commodities Europe
- SN Aboitiz Power Inc, Philippines
- Samtan Co., Ltd - South Korea
- Vizag Seaport Private Limited - India
- Edison Trading Spa - Italy
- PowerSource Philippines DevCo
- Sinarmas Energy and Mining - Indonesia
- Romanian Commodities Exchange
- Therma Luzon, Inc, Philippines
- Economic Council, Georgia
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- PetroVietnam Power Coal Import and Supply Company
- Kartika Selabumi Mining - Indonesia
- ASAPP Information Group - India
- Directorate General of MIneral and Coal - Indonesia
- Jaiprakash Power Ventures ltd
- Latin American Coal - Colombia
- Renaissance Capital - South Africa
- San Jose City I Power Corp, Philippines
- Minerals Council of Australia
- IHS Mccloskey Coal Group - USA
- Wood Mackenzie - Singapore
- Indian Oil Corporation Limited
- Commonwealth Bank - Australia
- Global Business Power Corporation, Philippines
- Mintek Dendrill Indonesia
- Georgia Ports Authority, United States
- Karaikal Port Pvt Ltd - India
- Bhoruka Overseas - Indonesia
- Leighton Contractors Pty Ltd - Australia
- Central Java Power - Indonesia
- Vedanta Resources Plc - India
- CNBM International Corporation - China
- Dalmia Cement Bharat India
- Rashtriya Ispat Nigam Limited - India
- Gujarat Mineral Development Corp Ltd - India
- Directorate Of Revenue Intelligence - India
- Tata Chemicals Ltd - India
- India Bulls Power Limited - India
- Sakthi Sugars Limited - India
- Karbindo Abesyapradhi - Indoneisa
- The Treasury - Australian Government
- Orica Australia Pty. Ltd.
- Energy Link Ltd, New Zealand
- Star Paper Mills Limited - India
- Bahari Cakrawala Sebuku - Indonesia
- Ind-Barath Power Infra Limited - India
- South Luzon Thermal Energy Corporation
- Global Coal Blending Company Limited - Australia
- Globalindo Alam Lestari - Indonesia
- Trasteel International SA, Italy
- Bhushan Steel Limited - India
- Tamil Nadu electricity Board
- Deloitte Consulting - India
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Parry Sugars Refinery, India
- Chettinad Cement Corporation Ltd - India
- Energy Development Corp, Philippines
- The State Trading Corporation of India Ltd
- Kobexindo Tractors - Indoneisa
- Gujarat Sidhee Cement - India
- Medco Energi Mining Internasional
- Riau Bara Harum - Indonesia
- VISA Power Limited - India
- Bhatia International Limited - India
- Wilmar Investment Holdings
- Standard Chartered Bank - UAE
- Carbofer General Trading SA - India
- Antam Resourcindo - Indonesia
- Ceylon Electricity Board - Sri Lanka
- Krishnapatnam Port Company Ltd. - India
- Metalloyd Limited - United Kingdom
- Oldendorff Carriers - Singapore
- Heidelberg Cement - Germany
- ICICI Bank Limited - India
- Bukit Asam (Persero) Tbk - Indonesia
- Africa Commodities Group - South Africa
- Bulk Trading Sa - Switzerland
- Thai Mozambique Logistica
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Banpu Public Company Limited - Thailand
- Ministry of Finance - Indonesia
- McConnell Dowell - Australia
- Neyveli Lignite Corporation Ltd, - India
- Indika Energy - Indonesia
- Bayan Resources Tbk. - Indonesia
- Eastern Coal Council - USA
- Manunggal Multi Energi - Indonesia
- GVK Power & Infra Limited - India
- Semirara Mining and Power Corporation, Philippines
- LBH Netherlands Bv - Netherlands
- IEA Clean Coal Centre - UK
- Madhucon Powers Ltd - India
- Toyota Tsusho Corporation, Japan
- Electricity Generating Authority of Thailand
- Anglo American - United Kingdom
- Bank of Tokyo Mitsubishi UFJ Ltd
- Iligan Light & Power Inc, Philippines
- Central Electricity Authority - India
- Mercator Lines Limited - India
- MS Steel International - UAE
- Maheswari Brothers Coal Limited - India
- Siam City Cement PLC, Thailand
- Offshore Bulk Terminal Pte Ltd, Singapore
- Jorong Barutama Greston.PT - Indonesia
- Larsen & Toubro Limited - India
- European Bulk Services B.V. - Netherlands
- Uttam Galva Steels Limited - India
- Miang Besar Coal Terminal - Indonesia
- Salva Resources Pvt Ltd - India
- Pipit Mutiara Jaya. PT, Indonesia
- Indian Energy Exchange, India
- Price Waterhouse Coopers - Russia
|
| |
| |
|
