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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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Tuesday, 14 December 21
COAL LOCK-IN IN SOUTHEAST ASIA PRESENTS A CHALLENGE FOR THE ASIAN DEVELOPMENT BANK'S COAL RETIREMENT PLAN - IEEFA
In August, the Asian Development Bank (ADB) announced an ambitious plan to buy high emissions coal-fired power plants in Southeast Asia and retire ...
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 ...
Tuesday, 07 December 21
SUPERCYCLE DEMAND: ARE WE THERE YET? - WOOD MACKENZIE
Taking young children on a long journey is fraught with challenges, not least the inevitable question a few minutes after leaving: are we there yet ...
Tuesday, 07 December 21
COAL WOULD REMAIN ENERGY LEADER FOR AT LEAST 15 YEARS - LIVEMINT
Coal India Ltd (CIL) has been in the eye of the storm after fuel stocks at coal-fuelled power plants depleted in October. Fuel stocks since are bei ...
Tuesday, 07 December 21
GLOBAL SHIPPING OUTLOOK TURNS STABLE FROM POSITIVE ON THE BACK OF PEAKING EARNINGS DURING 2021 - MOODY'S
The outlook for the global shipping industry is changed to stable from positive for the next 12 to 18 months due to demand slightly outstripping su ...
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- Intertek Mineral Services - Indonesia
- Bukit Makmur.PT - Indonesia
- Borneo Indobara - Indonesia
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Port Waratah Coal Services - Australia
- AsiaOL BioFuels Corp., Philippines
- Grasim Industreis Ltd - India
- Minerals Council of Australia
- Baramulti Group, Indonesia
- Lanco Infratech Ltd - India
- Petron Corporation, Philippines
- Videocon Industries ltd - India
- Meralco Power Generation, Philippines
- Heidelberg Cement - Germany
- Star Paper Mills Limited - India
- Thiess Contractors Indonesia
- Africa Commodities Group - South Africa
- Altura Mining Limited, Indonesia
- Goldman Sachs - Singapore
- Gujarat Electricity Regulatory Commission - India
- Semirara Mining Corp, Philippines
- South Luzon Thermal Energy Corporation
- New Zealand Coal & Carbon
- Bahari Cakrawala Sebuku - Indonesia
- Oldendorff Carriers - Singapore
- Kideco Jaya Agung - Indonesia
- Savvy Resources Ltd - HongKong
- The State Trading Corporation of India Ltd
- Indogreen Group - Indonesia
- Eastern Coal Council - USA
- Global Green Power PLC Corporation, Philippines
- Kumho Petrochemical, South Korea
- Indian Energy Exchange, India
- Kartika Selabumi Mining - Indonesia
- Formosa Plastics Group - Taiwan
- OPG Power Generation Pvt Ltd - India
- Gujarat Sidhee Cement - India
- Agrawal Coal Company - India
- Straits Asia Resources Limited - Singapore
- TeaM Sual Corporation - Philippines
- Cigading International Bulk Terminal - Indonesia
- Ministry of Finance - Indonesia
- Independent Power Producers Association of India
- Kobexindo Tractors - Indoneisa
- Chettinad Cement Corporation Ltd - India
- The University of Queensland
- LBH Netherlands Bv - Netherlands
- Samtan Co., Ltd - South Korea
- ASAPP Information Group - India
- San Jose City I Power Corp, Philippines
- Aboitiz Power Corporation - Philippines
- CNBM International Corporation - China
- Directorate Of Revenue Intelligence - India
- Australian Coal Association
- Tata Chemicals Ltd - India
- Chamber of Mines of South Africa
- Vizag Seaport Private Limited - India
- Jindal Steel & Power Ltd - India
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Orica Mining Services - Indonesia
- VISA Power Limited - India
- Holcim Trading Pte Ltd - Singapore
- Parliament of New Zealand
- Trasteel International SA, Italy
- Ind-Barath Power Infra Limited - India
- Barasentosa Lestari - Indonesia
- Central Java Power - Indonesia
- Parry Sugars Refinery, India
- Sree Jayajothi Cements Limited - India
- Power Finance Corporation Ltd., India
- Global Business Power Corporation, Philippines
- Kalimantan Lumbung Energi - Indonesia
- Electricity Authority, New Zealand
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Electricity Generating Authority of Thailand
- GN Power Mariveles Coal Plant, Philippines
- GAC Shipping (India) Pvt Ltd
- Sinarmas Energy and Mining - Indonesia
- Anglo American - United Kingdom
- Mercuria Energy - Indonesia
- CIMB Investment Bank - Malaysia
- Sakthi Sugars Limited - India
- Coal and Oil Company - UAE
- Ceylon Electricity Board - Sri Lanka
- Pipit Mutiara Jaya. PT, Indonesia
- Toyota Tsusho Corporation, Japan
- Central Electricity Authority - India
- Kepco SPC Power Corporation, Philippines
- Bukit Asam (Persero) Tbk - Indonesia
- Aditya Birla Group - India
- Rashtriya Ispat Nigam Limited - India
- Alfred C Toepfer International GmbH - Germany
- Kapuas Tunggal Persada - Indonesia
- Simpson Spence & Young - Indonesia
- Karaikal Port Pvt Ltd - India
- Economic Council, Georgia
- Attock Cement Pakistan Limited
- Wilmar Investment Holdings
- Bhushan Steel Limited - India
- GMR Energy Limited - India
- Bhoruka Overseas - Indonesia
- Sarangani Energy Corporation, Philippines
- McConnell Dowell - Australia
- Madhucon Powers Ltd - India
- Larsen & Toubro Limited - India
- Siam City Cement - Thailand
- Interocean Group of Companies - India
- India Bulls Power Limited - India
- Therma Luzon, Inc, Philippines
- Bharathi Cement Corporation - India
- Indika Energy - Indonesia
- Coastal Gujarat Power Limited - India
- GVK Power & Infra Limited - India
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Binh Thuan Hamico - Vietnam
- Banpu Public Company Limited - Thailand
- Kohat Cement Company Ltd. - Pakistan
- Directorate General of MIneral and Coal - Indonesia
- Indian Oil Corporation Limited
- Globalindo Alam Lestari - Indonesia
- Orica Australia Pty. Ltd.
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Indonesian Coal Mining Association
- Semirara Mining and Power Corporation, Philippines
- Maharashtra Electricity Regulatory Commission - India
- Georgia Ports Authority, United States
- Tamil Nadu electricity Board
- Bukit Baiduri Energy - Indonesia
- Bhatia International Limited - India
- Commonwealth Bank - Australia
- Ministry of Transport, Egypt
- Iligan Light & Power Inc, Philippines
- The Treasury - Australian Government
- SMC Global Power, Philippines
- Wood Mackenzie - Singapore
- Carbofer General Trading SA - India
- Eastern Energy - Thailand
- Essar Steel Hazira Ltd - India
- IHS Mccloskey Coal Group - USA
- Petrochimia International Co. Ltd.- Taiwan
- Posco Energy - South Korea
- Bulk Trading Sa - Switzerland
- Australian Commodity Traders Exchange
- Salva Resources Pvt Ltd - India
- Mercator Lines Limited - India
- Deloitte Consulting - India
- Medco Energi Mining Internasional
- Cement Manufacturers Association - India
- TNB Fuel Sdn Bhd - Malaysia
- Makarim & Taira - Indonesia
- Standard Chartered Bank - UAE
- PNOC Exploration Corporation - Philippines
- Planning Commission, India
- Leighton Contractors Pty Ltd - Australia
- White Energy Company Limited
- Rio Tinto Coal - Australia
- Ambuja Cements Ltd - India
- Edison Trading Spa - Italy
- Manunggal Multi Energi - Indonesia
- Ministry of Mines - Canada
- Indo Tambangraya Megah - Indonesia
- Sical Logistics Limited - India
- Renaissance Capital - South Africa
- Bank of Tokyo Mitsubishi UFJ Ltd
- Meenaskhi Energy Private Limited - India
- Coalindo Energy - Indonesia
- PTC India Limited - India
- Dalmia Cement Bharat India
- Merrill Lynch Commodities Europe
- Bangladesh Power Developement Board
- Riau Bara Harum - Indonesia
- IEA Clean Coal Centre - UK
- SMG Consultants - Indonesia
- Global Coal Blending Company Limited - Australia
- PetroVietnam Power Coal Import and Supply Company
- Asmin Koalindo Tuhup - Indonesia
- Metalloyd Limited - United Kingdom
- Energy Link Ltd, New Zealand
- Jaiprakash Power Ventures ltd
- Sojitz Corporation - Japan
- Gujarat Mineral Development Corp Ltd - India
- Thai Mozambique Logistica
- Miang Besar Coal Terminal - Indonesia
- Maheswari Brothers Coal Limited - India
- Energy Development Corp, Philippines
- Billiton Holdings Pty Ltd - Australia
- ICICI Bank Limited - India
- Singapore Mercantile Exchange
- Latin American Coal - Colombia
- Kaltim Prima Coal - Indonesia
- Antam Resourcindo - Indonesia
- Mjunction Services Limited - India
- Karbindo Abesyapradhi - Indoneisa
- Marubeni Corporation - India
- European Bulk Services B.V. - Netherlands
- International Coal Ventures Pvt Ltd - India
- Bayan Resources Tbk. - Indonesia
- Sindya Power Generating Company Private Ltd
- Neyveli Lignite Corporation Ltd, - India
- Romanian Commodities Exchange
- Xindia Steels Limited - India
- Jorong Barutama Greston.PT - Indonesia
- Pendopo Energi Batubara - Indonesia
- London Commodity Brokers - England
- Krishnapatnam Port Company Ltd. - India
- SN Aboitiz Power Inc, Philippines
- MS Steel International - UAE
- Uttam Galva Steels Limited - India
- Siam City Cement PLC, Thailand
- Price Waterhouse Coopers - Russia
- Malabar Cements Ltd - India
- Mintek Dendrill Indonesia
- PowerSource Philippines DevCo
- Vedanta Resources Plc - India
- Timah Investasi Mineral - Indoneisa
- Offshore Bulk Terminal Pte Ltd, Singapore
- Vijayanagar Sugar Pvt Ltd - India
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