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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.
The Information contained within the website of COALspot.com is intended for informational purposes only and is not intended as professional counsel and should not be used as such.
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Monday, 19 February 24
METALS INVESTMENT: THE DARKEST HOUR IS JUST BEFORE THE DAWN - WOOD MACKENZIE
Things often seem at their worst just before they get better. In terms of meeting our net zero 2050 scenario, we’ve reached a watershed momen ...
Tuesday, 13 February 24
WHAT IS THE OUTLOOK FOR THE NATURAL GAS SPOT PRICE IN 2024 AND 2025? EIA
We expect the U.S. benchmark Henry Hub natural gas spot price to average higher in 2024 and 2025 than in 2023, but to remain lower than $3.00 per m ...
Monday, 12 February 24
US THERMAL COAL EXPORTS HIT 5-YEAR HIGHS AND TOP $5 BLN IN 2023 - REUTERS
United States exporters of thermal coal earned more than $5 billion in 2023 as they shipped out more than 32.5 million metric tons of the high-poll ...
Tuesday, 06 February 24
NEW E-FUELS PROJECT TO MAKE INTERNATIONAL SHIPPING CLIMATE-NEUTRAL - RINA
Transport and trade on the ocean blue must be made much greener. This is the goal of the new €17 million European GAMMA project, where compani ...
Tuesday, 06 February 24
INDIA SEES ANNUAL COAL OUTPUT UP 10.9% IN 2024/25 - REUTERS
India expects domestic coal output to increase by 10.9% to 1.13 billion metric tons in the fiscal year ending March 2025, a senior government offic ...
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- Australian Coal Association
- Jaiprakash Power Ventures ltd
- Dalmia Cement Bharat India
- Savvy Resources Ltd - HongKong
- VISA Power Limited - India
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Medco Energi Mining Internasional
- Eastern Coal Council - USA
- Makarim & Taira - Indonesia
- European Bulk Services B.V. - Netherlands
- SMC Global Power, Philippines
- SN Aboitiz Power Inc, Philippines
- Orica Australia Pty. Ltd.
- Indika Energy - Indonesia
- Karbindo Abesyapradhi - Indoneisa
- GAC Shipping (India) Pvt Ltd
- Attock Cement Pakistan Limited
- Riau Bara Harum - Indonesia
- Petron Corporation, Philippines
- Bhushan Steel Limited - India
- Simpson Spence & Young - Indonesia
- Sindya Power Generating Company Private Ltd
- Carbofer General Trading SA - India
- Thiess Contractors Indonesia
- The Treasury - Australian Government
- Baramulti Group, Indonesia
- Indonesian Coal Mining Association
- SMG Consultants - Indonesia
- Chettinad Cement Corporation Ltd - India
- Neyveli Lignite Corporation Ltd, - India
- Gujarat Electricity Regulatory Commission - India
- Mjunction Services Limited - India
- Electricity Authority, New Zealand
- Commonwealth Bank - Australia
- Minerals Council of Australia
- Karaikal Port Pvt Ltd - India
- Eastern Energy - Thailand
- Economic Council, Georgia
- CNBM International Corporation - China
- Central Electricity Authority - India
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Pendopo Energi Batubara - Indonesia
- Australian Commodity Traders Exchange
- Indo Tambangraya Megah - Indonesia
- Trasteel International SA, Italy
- Bhoruka Overseas - Indonesia
- Larsen & Toubro Limited - India
- Grasim Industreis Ltd - India
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Kobexindo Tractors - Indoneisa
- White Energy Company Limited
- McConnell Dowell - Australia
- Vizag Seaport Private Limited - India
- Mintek Dendrill Indonesia
- Sakthi Sugars Limited - India
- Coastal Gujarat Power Limited - India
- Malabar Cements Ltd - India
- India Bulls Power Limited - India
- Cigading International Bulk Terminal - Indonesia
- Directorate Of Revenue Intelligence - India
- The State Trading Corporation of India Ltd
- Videocon Industries ltd - India
- Offshore Bulk Terminal Pte Ltd, Singapore
- Samtan Co., Ltd - South Korea
- Manunggal Multi Energi - Indonesia
- Madhucon Powers Ltd - India
- Thai Mozambique Logistica
- Borneo Indobara - Indonesia
- Rashtriya Ispat Nigam Limited - India
- Metalloyd Limited - United Kingdom
- GVK Power & Infra Limited - India
- Mercuria Energy - Indonesia
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- The University of Queensland
- Chamber of Mines of South Africa
- Essar Steel Hazira Ltd - India
- San Jose City I Power Corp, Philippines
- Wood Mackenzie - Singapore
- Standard Chartered Bank - UAE
- Sojitz Corporation - Japan
- Alfred C Toepfer International GmbH - Germany
- Agrawal Coal Company - India
- Ministry of Finance - Indonesia
- Xindia Steels Limited - India
- Global Business Power Corporation, Philippines
- Bayan Resources Tbk. - Indonesia
- IEA Clean Coal Centre - UK
- Coalindo Energy - Indonesia
- ICICI Bank Limited - India
- Asmin Koalindo Tuhup - Indonesia
- TeaM Sual Corporation - Philippines
- Electricity Generating Authority of Thailand
- London Commodity Brokers - England
- Parliament of New Zealand
- Tamil Nadu electricity Board
- Sarangani Energy Corporation, Philippines
- MS Steel International - UAE
- Aditya Birla Group - India
- Bangladesh Power Developement Board
- Iligan Light & Power Inc, Philippines
- Banpu Public Company Limited - Thailand
- Bulk Trading Sa - Switzerland
- Directorate General of MIneral and Coal - Indonesia
- Sical Logistics Limited - India
- Marubeni Corporation - India
- Gujarat Mineral Development Corp Ltd - India
- Renaissance Capital - South Africa
- Kohat Cement Company Ltd. - Pakistan
- Intertek Mineral Services - Indonesia
- Krishnapatnam Port Company Ltd. - India
- Semirara Mining Corp, Philippines
- Deloitte Consulting - India
- PTC India Limited - India
- Straits Asia Resources Limited - Singapore
- Jindal Steel & Power Ltd - India
- Cement Manufacturers Association - India
- Semirara Mining and Power Corporation, Philippines
- Aboitiz Power Corporation - Philippines
- Interocean Group of Companies - India
- Ceylon Electricity Board - Sri Lanka
- Kepco SPC Power Corporation, Philippines
- Heidelberg Cement - Germany
- Goldman Sachs - Singapore
- PNOC Exploration Corporation - Philippines
- Indogreen Group - Indonesia
- Uttam Galva Steels Limited - India
- Kideco Jaya Agung - Indonesia
- Leighton Contractors Pty Ltd - Australia
- Kapuas Tunggal Persada - Indonesia
- Vijayanagar Sugar Pvt Ltd - India
- Coal and Oil Company - UAE
- Jorong Barutama Greston.PT - Indonesia
- Energy Development Corp, Philippines
- Binh Thuan Hamico - Vietnam
- Maheswari Brothers Coal Limited - India
- Wilmar Investment Holdings
- Ind-Barath Power Infra Limited - India
- Globalindo Alam Lestari - Indonesia
- Billiton Holdings Pty Ltd - Australia
- Posco Energy - South Korea
- Bhatia International Limited - India
- Sinarmas Energy and Mining - Indonesia
- Kumho Petrochemical, South Korea
- Meenaskhi Energy Private Limited - India
- Anglo American - United Kingdom
- GMR Energy Limited - India
- Petrochimia International Co. Ltd.- Taiwan
- Kalimantan Lumbung Energi - Indonesia
- Ministry of Mines - Canada
- Bank of Tokyo Mitsubishi UFJ Ltd
- Bharathi Cement Corporation - India
- AsiaOL BioFuels Corp., Philippines
- Star Paper Mills Limited - India
- Bukit Makmur.PT - Indonesia
- Pipit Mutiara Jaya. PT, Indonesia
- Port Waratah Coal Services - Australia
- Antam Resourcindo - Indonesia
- Power Finance Corporation Ltd., India
- TNB Fuel Sdn Bhd - Malaysia
- Lanco Infratech Ltd - India
- Central Java Power - Indonesia
- Global Coal Blending Company Limited - Australia
- Bukit Baiduri Energy - Indonesia
- Siam City Cement - Thailand
- Maharashtra Electricity Regulatory Commission - India
- Latin American Coal - Colombia
- Vedanta Resources Plc - India
- Bukit Asam (Persero) Tbk - Indonesia
- GN Power Mariveles Coal Plant, Philippines
- New Zealand Coal & Carbon
- Georgia Ports Authority, United States
- Planning Commission, India
- Gujarat Sidhee Cement - India
- Edison Trading Spa - Italy
- Oldendorff Carriers - Singapore
- Romanian Commodities Exchange
- Bahari Cakrawala Sebuku - Indonesia
- Timah Investasi Mineral - Indoneisa
- Global Green Power PLC Corporation, Philippines
- International Coal Ventures Pvt Ltd - India
- Toyota Tsusho Corporation, Japan
- Therma Luzon, Inc, Philippines
- ASAPP Information Group - India
- LBH Netherlands Bv - Netherlands
- Ministry of Transport, Egypt
- Energy Link Ltd, New Zealand
- Formosa Plastics Group - Taiwan
- Indian Oil Corporation Limited
- Tata Chemicals Ltd - India
- Sree Jayajothi Cements Limited - India
- Mercator Lines Limited - India
- Singapore Mercantile Exchange
- Parry Sugars Refinery, India
- Altura Mining Limited, Indonesia
- Kartika Selabumi Mining - Indonesia
- OPG Power Generation Pvt Ltd - India
- Indian Energy Exchange, India
- PowerSource Philippines DevCo
- CIMB Investment Bank - Malaysia
- Meralco Power Generation, Philippines
- Independent Power Producers Association of India
- Orica Mining Services - Indonesia
- Price Waterhouse Coopers - Russia
- Kaltim Prima Coal - Indonesia
- Miang Besar Coal Terminal - Indonesia
- Africa Commodities Group - South Africa
- Siam City Cement PLC, Thailand
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Holcim Trading Pte Ltd - Singapore
- Salva Resources Pvt Ltd - India
- Barasentosa Lestari - Indonesia
- Ambuja Cements Ltd - India
- Rio Tinto Coal - Australia
- PetroVietnam Power Coal Import and Supply Company
- South Luzon Thermal Energy Corporation
- Merrill Lynch Commodities Europe
- IHS Mccloskey Coal Group - USA
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