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Wednesday, 20 October 21
MARKET INSIGHT - INTERMODAL
 IMO 2020, Ballast Water Treatment regulations, Green Recycling, GHG emissions, EEXI, CII, ETS, Fit for 55, Carbon price/levy, the Poseidon Principles are just a handful pieces of evidence that the environmental regulations are not only knocking on the door, but are already inside the shipping house and with the intention to stay for good.
Ship operators and managers, charterers, ship financiers must take good consideration of all the above before making any operational and investment decision; including placing an order for a new-building vessel, which has become the most complex decision to make, given all the new regulations and technologies coming up.
In this radically changing environment, ship financiers need to assist the industry to bear the burden of the enormous cost of the new regulations/technologies and in general the setting up of the new greener landscape. So far, and while claiming that they will incentivize international shipping’s decarbonization, the focus in the immediate future is to finance solely modern/ecofriendly vessels, while older vessels’ access to financing which would need it the most for their environmentally upgrade is constrained by leading banks and left to alternative financing. This bifurcation in lending constitutes an obstacle for ships that don’t already have green credentials to take significant investment steps towards the energy transition requirements.
Obviously, banks are afraid of being left with portfolios of assets that in 3-4 years’ time have a minimum value (being non green assets). On top of this, there is the concern that a two-tier assets market might develop when the new regulations kick in. The one tier being this of the greener ships and the second one being the tier with the older, non-eco ones that may be employed at a discount. This places another risk factor for the banks. The risk of their financing projects not being profitable anymore. In this context, older ships seem to be left with the operational choice of reducing engine power and thus lower speeds as a primary measure to be “emissions compliant”. While the choice split on the speed level between the shipowner and the charterer will largely depend on the prevailing freight market structure i.e. voyages or timecharters that older vessels will be opted to be deployed under, the sure thing is that they will all try to take advantage of it and negotiate the fixing rates.
Will this be the case? Will we have another scrubber – non scrubber dilemma going forward? Will the new regulations, emissions mitigation costs via carbon prices / potential fuel levies, limited financing options (or expensive options through alternative financing) and lesser charter rates increase scrapping considerations in 2-3 years time, given that approx. 23% of the combined bulk tankers and containers fleet is above 15 years of age? Does the market have the luxury of losing even a fraction of this via scrapping considering the freight market upcycle across most shipping sectors leads to increased deadweight requirements? Let’s just have a look at what’s happening nowadays due to elevated port congestion, which has tied up a significant share of the dry bulk and containers fleet creating market inefficiencies that have exercised strong upward pressures on freight rates with container rates at record high levels and dry bulk freight rates at the highest in 13 years.
Therefore, a further fleet supply squeeze creates good chances that younger vessels will benefit from a charter premium compared to their older peers. However, this that does not mean that older vessels will become obsolete. This is something that the banks need to realise and start supporting their clients when it comes to ‘’older’’ vessels’ financings. It goes without saying that the whole shipping value chain needs to adjust to the new greener environment regime. The banks need to support this new and highly expensive venture of their clients not just by not financing older vessels, but also providing real, monetary incentives that will have tangible and meaningful effect to their daily operating costs.
By George Laios,
Deputy CEO
Compiled by:
Intermodal Research & Valuations
Analysts:
Yiannis Parganas
Tamara Apostolou
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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Thursday, 26 August 21
INDIA IMPORTED 17.06 MLN TONNES OF LPG IN 2020; UP 11.5% Y-O-Y
Global LPG trade remained fairly positive in 2020, despite the global economic impact from COVID-19, and surged strongly in the first half of 2021. ...
Thursday, 26 August 21
MARKET INSIGHT - INTERMODAL
24th of August 2021, the Baltic Dry Index reached 4,201, a YTD high and the highest since May 2010.
Cape 5TC daily average @ 51,472
...
Tuesday, 24 August 21
COAL PRICE RALLY TO PRESSURE CHINESE POWER GENCOS’ MARGINS FITCH RATINGS
Fitch Ratings expects the pressure on Chinese power generation companies’ (gencos) profit from the recent coal price surge to weaken their cr ...
Tuesday, 24 August 21
TIGHT POWER SUPPLY IN CHINA AMID STRONG DEMAND, HIGH COAL PRICES - FITCH RATINGS
China experienced tight power supply in 1H21 on stronger than expected power demand as economic activity continued to recover, Fitch Ratings says i ...
Monday, 23 August 21
CHINESE COAL PRODUCTION RISES 4.9 PCT IN 1ST 7 MONTHS OF 2021 - NBS
Official figures demonstrated that the Chinese raw coal production surged 4.9 percent annually to 2.26 billion tonnes in the January-July period of ...
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- Sakthi Sugars Limited - India
- Global Coal Blending Company Limited - Australia
- TeaM Sual Corporation - Philippines
- Timah Investasi Mineral - Indoneisa
- Gujarat Mineral Development Corp Ltd - India
- Xindia Steels Limited - India
- Sinarmas Energy and Mining - Indonesia
- Bharathi Cement Corporation - India
- Vijayanagar Sugar Pvt Ltd - India
- Mercuria Energy - Indonesia
- Bukit Makmur.PT - Indonesia
- McConnell Dowell - Australia
- The University of Queensland
- Indian Energy Exchange, India
- PowerSource Philippines DevCo
- Chettinad Cement Corporation Ltd - India
- Videocon Industries ltd - India
- Sindya Power Generating Company Private Ltd
- IHS Mccloskey Coal Group - USA
- Wood Mackenzie - Singapore
- Savvy Resources Ltd - HongKong
- European Bulk Services B.V. - Netherlands
- Jindal Steel & Power Ltd - India
- Tata Chemicals Ltd - India
- South Luzon Thermal Energy Corporation
- Binh Thuan Hamico - Vietnam
- London Commodity Brokers - England
- Interocean Group of Companies - India
- Wilmar Investment Holdings
- Parliament of New Zealand
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Gujarat Sidhee Cement - India
- Larsen & Toubro Limited - India
- Offshore Bulk Terminal Pte Ltd, Singapore
- Semirara Mining Corp, Philippines
- The Treasury - Australian Government
- Rashtriya Ispat Nigam Limited - India
- Barasentosa Lestari - Indonesia
- ASAPP Information Group - India
- Ambuja Cements Ltd - India
- Port Waratah Coal Services - Australia
- Energy Link Ltd, New Zealand
- Orica Mining Services - Indonesia
- Minerals Council of Australia
- AsiaOL BioFuels Corp., Philippines
- Madhucon Powers Ltd - India
- Pipit Mutiara Jaya. PT, Indonesia
- Sree Jayajothi Cements Limited - India
- Vizag Seaport Private Limited - India
- Coal and Oil Company - UAE
- Commonwealth Bank - Australia
- Vedanta Resources Plc - India
- Indonesian Coal Mining Association
- Pendopo Energi Batubara - Indonesia
- Alfred C Toepfer International GmbH - Germany
- Aboitiz Power Corporation - Philippines
- Kapuas Tunggal Persada - Indonesia
- Antam Resourcindo - Indonesia
- Straits Asia Resources Limited - Singapore
- Karbindo Abesyapradhi - Indoneisa
- Bhatia International Limited - India
- Mintek Dendrill Indonesia
- Medco Energi Mining Internasional
- Maheswari Brothers Coal Limited - India
- Iligan Light & Power Inc, Philippines
- Asmin Koalindo Tuhup - Indonesia
- Bangladesh Power Developement Board
- Edison Trading Spa - Italy
- GVK Power & Infra Limited - India
- Planning Commission, India
- Gujarat Electricity Regulatory Commission - India
- Ministry of Mines - Canada
- Kobexindo Tractors - Indoneisa
- Indika Energy - Indonesia
- Neyveli Lignite Corporation Ltd, - India
- Georgia Ports Authority, United States
- Mercator Lines Limited - India
- Indogreen Group - Indonesia
- LBH Netherlands Bv - Netherlands
- TNB Fuel Sdn Bhd - Malaysia
- CNBM International Corporation - China
- Carbofer General Trading SA - India
- Ind-Barath Power Infra Limited - India
- Anglo American - United Kingdom
- OPG Power Generation Pvt Ltd - India
- Simpson Spence & Young - Indonesia
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Global Green Power PLC Corporation, Philippines
- Bank of Tokyo Mitsubishi UFJ Ltd
- Formosa Plastics Group - Taiwan
- Australian Commodity Traders Exchange
- Independent Power Producers Association of India
- Ceylon Electricity Board - Sri Lanka
- SN Aboitiz Power Inc, Philippines
- Leighton Contractors Pty Ltd - Australia
- Trasteel International SA, Italy
- VISA Power Limited - India
- Miang Besar Coal Terminal - Indonesia
- Therma Luzon, Inc, Philippines
- Coalindo Energy - Indonesia
- Ministry of Transport, Egypt
- Orica Australia Pty. Ltd.
- Bhoruka Overseas - Indonesia
- Lanco Infratech Ltd - India
- International Coal Ventures Pvt Ltd - India
- Thai Mozambique Logistica
- Thiess Contractors Indonesia
- Oldendorff Carriers - Singapore
- Indian Oil Corporation Limited
- MS Steel International - UAE
- Coastal Gujarat Power Limited - India
- Africa Commodities Group - South Africa
- Petron Corporation, Philippines
- PetroVietnam Power Coal Import and Supply Company
- Makarim & Taira - Indonesia
- Posco Energy - South Korea
- Riau Bara Harum - Indonesia
- Energy Development Corp, Philippines
- Kalimantan Lumbung Energi - Indonesia
- Manunggal Multi Energi - Indonesia
- Electricity Generating Authority of Thailand
- Cigading International Bulk Terminal - Indonesia
- Kaltim Prima Coal - Indonesia
- Grasim Industreis Ltd - India
- Salva Resources Pvt Ltd - India
- Central Electricity Authority - India
- Aditya Birla Group - India
- Karaikal Port Pvt Ltd - India
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Bahari Cakrawala Sebuku - Indonesia
- San Jose City I Power Corp, Philippines
- Kumho Petrochemical, South Korea
- Bayan Resources Tbk. - Indonesia
- Eastern Coal Council - USA
- SMC Global Power, Philippines
- Bulk Trading Sa - Switzerland
- Kartika Selabumi Mining - Indonesia
- Toyota Tsusho Corporation, Japan
- Standard Chartered Bank - UAE
- Kideco Jaya Agung - Indonesia
- New Zealand Coal & Carbon
- Borneo Indobara - Indonesia
- Cement Manufacturers Association - India
- Petrochimia International Co. Ltd.- Taiwan
- Deloitte Consulting - India
- IEA Clean Coal Centre - UK
- Central Java Power - Indonesia
- Indo Tambangraya Megah - Indonesia
- Goldman Sachs - Singapore
- Bhushan Steel Limited - India
- Mjunction Services Limited - India
- GN Power Mariveles Coal Plant, Philippines
- Siam City Cement PLC, Thailand
- Directorate General of MIneral and Coal - Indonesia
- Renaissance Capital - South Africa
- Billiton Holdings Pty Ltd - Australia
- Samtan Co., Ltd - South Korea
- Bukit Asam (Persero) Tbk - Indonesia
- GAC Shipping (India) Pvt Ltd
- Meenaskhi Energy Private Limited - India
- Jaiprakash Power Ventures ltd
- Parry Sugars Refinery, India
- PNOC Exploration Corporation - Philippines
- Singapore Mercantile Exchange
- Intertek Mineral Services - Indonesia
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Romanian Commodities Exchange
- ICICI Bank Limited - India
- Australian Coal Association
- Uttam Galva Steels Limited - India
- Rio Tinto Coal - Australia
- Sical Logistics Limited - India
- Meralco Power Generation, Philippines
- GMR Energy Limited - India
- Globalindo Alam Lestari - Indonesia
- SMG Consultants - Indonesia
- Sojitz Corporation - Japan
- Banpu Public Company Limited - Thailand
- Siam City Cement - Thailand
- Directorate Of Revenue Intelligence - India
- Holcim Trading Pte Ltd - Singapore
- Star Paper Mills Limited - India
- India Bulls Power Limited - India
- Eastern Energy - Thailand
- Semirara Mining and Power Corporation, Philippines
- Marubeni Corporation - India
- PTC India Limited - India
- White Energy Company Limited
- CIMB Investment Bank - Malaysia
- Maharashtra Electricity Regulatory Commission - India
- Attock Cement Pakistan Limited
- Tamil Nadu electricity Board
- Heidelberg Cement - Germany
- Economic Council, Georgia
- Chamber of Mines of South Africa
- Merrill Lynch Commodities Europe
- The State Trading Corporation of India Ltd
- Price Waterhouse Coopers - Russia
- Sarangani Energy Corporation, Philippines
- Global Business Power Corporation, Philippines
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Malabar Cements Ltd - India
- Metalloyd Limited - United Kingdom
- Kepco SPC Power Corporation, Philippines
- Kohat Cement Company Ltd. - Pakistan
- Essar Steel Hazira Ltd - India
- Ministry of Finance - Indonesia
- Dalmia Cement Bharat India
- Latin American Coal - Colombia
- Power Finance Corporation Ltd., India
- Baramulti Group, Indonesia
- Jorong Barutama Greston.PT - Indonesia
- Bukit Baiduri Energy - Indonesia
- Altura Mining Limited, Indonesia
- Krishnapatnam Port Company Ltd. - India
- Agrawal Coal Company - India
- Electricity Authority, New Zealand
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