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.
|
|
Friday, 22 March 24
INDONESIA APPROVES 922.14 MLN T COAL PRODUCTION QUOTA FOR 2024, ABOVE TARGET - REUTERS
Indonesia has approved coal production quotas totalling 922.14 million metric tons for 2024, Bambang Suswantono, a senior official at the mining mi ...
Friday, 22 March 24
CHINA COAL INDUSTRY GROUP EXPECTS OUTPUT GROWTH TO SLOW IN 2024 - REUTERS
China’s coal output is expected to increase 36 million metric tons, or 0.8%, to about 4.7 billion tonnes in 2024, a Chinese coal industry gro ...
Monday, 18 March 24
THREE KEY TAKEAWAYS FROM OUR EUROPE GAS MARKETS SHORT-TERM OUTLOOK Q1 2024 - WOOD MACKENZIE
European gas prices are currently back to pre-crisis levels, but with a complex series of factors affecting future supply and demand, are they set ...
Wednesday, 06 March 24
INDONESIA AIMS TO FINISH MINING OUTPUT QUOTAS APPROVAL BY END-MARCH, OFFICIAL SAYS - REUTERS
Indonesia’s has approved the mining production quotarequests from more than 120mineral companies and aims to complete the approval process th ...
Monday, 04 March 24
IS YOUR GUARANTEE A GUARANTEE? NOTE TO SHIPOWNERS - GARD
KNOWLEDGE TO ELEVATE
The law of guarantees is not always obvious or easy to understand without proper guidance. This article clarifies the dif ...
|
|
|
Showing 26 to 30 news of total 6871 |
|
 |
|
|
|
|
| |
|
 |
|
|
| |
|
- Timah Investasi Mineral - Indoneisa
- Bayan Resources Tbk. - Indonesia
- Chettinad Cement Corporation Ltd - India
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Asmin Koalindo Tuhup - Indonesia
- TeaM Sual Corporation - Philippines
- Tata Chemicals Ltd - India
- ASAPP Information Group - India
- Energy Development Corp, Philippines
- Energy Link Ltd, New Zealand
- Kaltim Prima Coal - Indonesia
- Edison Trading Spa - Italy
- ICICI Bank Limited - India
- Banpu Public Company Limited - Thailand
- Bank of Tokyo Mitsubishi UFJ Ltd
- Simpson Spence & Young - Indonesia
- Bangladesh Power Developement Board
- IEA Clean Coal Centre - UK
- Parliament of New Zealand
- Samtan Co., Ltd - South Korea
- New Zealand Coal & Carbon
- Central Electricity Authority - India
- Ceylon Electricity Board - Sri Lanka
- Petrochimia International Co. Ltd.- Taiwan
- IHS Mccloskey Coal Group - USA
- CIMB Investment Bank - Malaysia
- Singapore Mercantile Exchange
- Australian Commodity Traders Exchange
- Australian Coal Association
- San Jose City I Power Corp, Philippines
- Posco Energy - South Korea
- Global Green Power PLC Corporation, Philippines
- Power Finance Corporation Ltd., India
- Interocean Group of Companies - India
- Global Business Power Corporation, Philippines
- Straits Asia Resources Limited - Singapore
- Intertek Mineral Services - Indonesia
- Indogreen Group - Indonesia
- PTC India Limited - India
- Indonesian Coal Mining Association
- Sakthi Sugars Limited - India
- Orica Mining Services - Indonesia
- The University of Queensland
- Mjunction Services Limited - India
- Medco Energi Mining Internasional
- Wilmar Investment Holdings
- London Commodity Brokers - England
- Semirara Mining Corp, Philippines
- Leighton Contractors Pty Ltd - Australia
- Standard Chartered Bank - UAE
- Savvy Resources Ltd - HongKong
- Jorong Barutama Greston.PT - Indonesia
- Kepco SPC Power Corporation, Philippines
- Kapuas Tunggal Persada - Indonesia
- Romanian Commodities Exchange
- Tamil Nadu electricity Board
- Attock Cement Pakistan Limited
- Carbofer General Trading SA - India
- Bhushan Steel Limited - India
- GMR Energy Limited - India
- Merrill Lynch Commodities Europe
- Indian Energy Exchange, India
- Makarim & Taira - Indonesia
- Orica Australia Pty. Ltd.
- Ambuja Cements Ltd - India
- Maheswari Brothers Coal Limited - India
- PowerSource Philippines DevCo
- Karbindo Abesyapradhi - Indoneisa
- VISA Power Limited - India
- Port Waratah Coal Services - Australia
- Siam City Cement - Thailand
- Holcim Trading Pte Ltd - Singapore
- Independent Power Producers Association of India
- The Treasury - Australian Government
- Coal and Oil Company - UAE
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Jindal Steel & Power Ltd - India
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Madhucon Powers Ltd - India
- Billiton Holdings Pty Ltd - Australia
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Krishnapatnam Port Company Ltd. - India
- Kobexindo Tractors - Indoneisa
- Ministry of Mines - Canada
- Eastern Energy - Thailand
- Marubeni Corporation - India
- Star Paper Mills Limited - India
- Siam City Cement PLC, Thailand
- Kohat Cement Company Ltd. - Pakistan
- Salva Resources Pvt Ltd - India
- Economic Council, Georgia
- Miang Besar Coal Terminal - Indonesia
- Aditya Birla Group - India
- Neyveli Lignite Corporation Ltd, - India
- Chamber of Mines of South Africa
- Offshore Bulk Terminal Pte Ltd, Singapore
- Sinarmas Energy and Mining - Indonesia
- GAC Shipping (India) Pvt Ltd
- Jaiprakash Power Ventures ltd
- Bulk Trading Sa - Switzerland
- Petron Corporation, Philippines
- Directorate General of MIneral and Coal - Indonesia
- Vijayanagar Sugar Pvt Ltd - India
- Kartika Selabumi Mining - Indonesia
- Indian Oil Corporation Limited
- Malabar Cements Ltd - India
- Meenaskhi Energy Private Limited - India
- Central Java Power - Indonesia
- Coalindo Energy - Indonesia
- Meralco Power Generation, Philippines
- Grasim Industreis Ltd - India
- India Bulls Power Limited - India
- Gujarat Sidhee Cement - India
- Aboitiz Power Corporation - Philippines
- Georgia Ports Authority, United States
- Antam Resourcindo - Indonesia
- Thai Mozambique Logistica
- Semirara Mining and Power Corporation, Philippines
- Lanco Infratech Ltd - India
- Pendopo Energi Batubara - Indonesia
- Mercator Lines Limited - India
- Kumho Petrochemical, South Korea
- McConnell Dowell - Australia
- Deloitte Consulting - India
- Bukit Asam (Persero) Tbk - Indonesia
- SMG Consultants - Indonesia
- Riau Bara Harum - Indonesia
- Sojitz Corporation - Japan
- Altura Mining Limited, Indonesia
- Sree Jayajothi Cements Limited - India
- Sical Logistics Limited - India
- Rio Tinto Coal - Australia
- Kideco Jaya Agung - Indonesia
- PNOC Exploration Corporation - Philippines
- Price Waterhouse Coopers - Russia
- AsiaOL BioFuels Corp., Philippines
- OPG Power Generation Pvt Ltd - India
- Bukit Baiduri Energy - Indonesia
- Electricity Authority, New Zealand
- Sarangani Energy Corporation, Philippines
- LBH Netherlands Bv - Netherlands
- Latin American Coal - Colombia
- Gujarat Electricity Regulatory Commission - India
- Larsen & Toubro Limited - India
- Bharathi Cement Corporation - India
- Barasentosa Lestari - Indonesia
- GN Power Mariveles Coal Plant, Philippines
- Directorate Of Revenue Intelligence - India
- SMC Global Power, Philippines
- Anglo American - United Kingdom
- Iligan Light & Power Inc, Philippines
- Bukit Makmur.PT - Indonesia
- Parry Sugars Refinery, India
- Commonwealth Bank - Australia
- Wood Mackenzie - Singapore
- TNB Fuel Sdn Bhd - Malaysia
- Ministry of Finance - Indonesia
- Ministry of Transport, Egypt
- Pipit Mutiara Jaya. PT, Indonesia
- Vizag Seaport Private Limited - India
- European Bulk Services B.V. - Netherlands
- Metalloyd Limited - United Kingdom
- Agrawal Coal Company - India
- Heidelberg Cement - Germany
- Toyota Tsusho Corporation, Japan
- Global Coal Blending Company Limited - Australia
- Renaissance Capital - South Africa
- Vedanta Resources Plc - India
- Electricity Generating Authority of Thailand
- Bhatia International Limited - India
- White Energy Company Limited
- Globalindo Alam Lestari - Indonesia
- Gujarat Mineral Development Corp Ltd - India
- Borneo Indobara - Indonesia
- Baramulti Group, Indonesia
- Thiess Contractors Indonesia
- Indika Energy - Indonesia
- Africa Commodities Group - South Africa
- Therma Luzon, Inc, Philippines
- Trasteel International SA, Italy
- Cement Manufacturers Association - India
- Minerals Council of Australia
- Cigading International Bulk Terminal - Indonesia
- South Luzon Thermal Energy Corporation
- International Coal Ventures Pvt Ltd - India
- Goldman Sachs - Singapore
- Planning Commission, India
- Rashtriya Ispat Nigam Limited - India
- Essar Steel Hazira Ltd - India
- Xindia Steels Limited - India
- Sindya Power Generating Company Private Ltd
- Bahari Cakrawala Sebuku - Indonesia
- Coastal Gujarat Power Limited - India
- CNBM International Corporation - China
- Eastern Coal Council - USA
- Formosa Plastics Group - Taiwan
- GVK Power & Infra Limited - India
- Bhoruka Overseas - Indonesia
- Videocon Industries ltd - India
- Oldendorff Carriers - Singapore
- Dalmia Cement Bharat India
- MS Steel International - UAE
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Mintek Dendrill Indonesia
- SN Aboitiz Power Inc, Philippines
- Uttam Galva Steels Limited - India
- Indo Tambangraya Megah - Indonesia
- Alfred C Toepfer International GmbH - Germany
- Ind-Barath Power Infra Limited - India
- Maharashtra Electricity Regulatory Commission - India
- Mercuria Energy - Indonesia
- Binh Thuan Hamico - Vietnam
- The State Trading Corporation of India Ltd
- Manunggal Multi Energi - Indonesia
- PetroVietnam Power Coal Import and Supply Company
- Karaikal Port Pvt Ltd - India
- Kalimantan Lumbung Energi - Indonesia
|
| |
| |
|
