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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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Wednesday, 20 October 21
CHINA COAL HITS RECORD HIGH AMID TIGHT SUPPLIES - REUTERS
China coal prices hit a record high on Tuesday buoyed by a widening power crunch and cold weather despite Beijing’s efforts to bolster supply ...
Tuesday, 19 October 21
SPONGE IRON SECTOR MIGHT REPORT NEGATIVE GROWTH DUE TO COAL CRISIS: SIMA - PTI
The domestic sponge iron industry might report a negative growth in the ongoing December quarter “if the shortage of coal is allowed to conti ...
Tuesday, 19 October 21
COAL INDIA, THE FALL GUY FOR POWER CRISIS - INDIA EXPRESS
The post-Covid economic recovery has led to a major increase in the demand for power, both in India and globally. In India, coal-based power plants ...
Saturday, 16 October 21
SOLAR INSTALLATION SURGE PUTS INDIA ON TRACK TO CAP COAL-FIRED POWER AS EARLY AS 2024 - IEEFA
Recent increase in solar power installations could push coal to peak sooner than expected
If India keeps installing solar capacity a ...
Saturday, 16 October 21
DESPITE HIGHER COAL PRICES, U.S. COAL RECOVERY LOOKS WEAK BY MOST MEASURES - IEEFA
U.S. coal sector is locked into a long-term sectoral decline
Coal prices have surged to the highest level in years in the U.S., and have soare ...
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- Manunggal Multi Energi - Indonesia
- Siam City Cement - Thailand
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Iligan Light & Power Inc, Philippines
- Planning Commission, India
- TeaM Sual Corporation - Philippines
- Riau Bara Harum - Indonesia
- Georgia Ports Authority, United States
- Madhucon Powers Ltd - India
- Altura Mining Limited, Indonesia
- Bayan Resources Tbk. - Indonesia
- OPG Power Generation Pvt Ltd - India
- Malabar Cements Ltd - India
- Star Paper Mills Limited - India
- Xindia Steels Limited - India
- Central Electricity Authority - India
- Kumho Petrochemical, South Korea
- Chamber of Mines of South Africa
- Wood Mackenzie - Singapore
- Uttam Galva Steels Limited - India
- Dalmia Cement Bharat India
- Edison Trading Spa - Italy
- ICICI Bank Limited - India
- Bhoruka Overseas - Indonesia
- Kalimantan Lumbung Energi - Indonesia
- Parliament of New Zealand
- Heidelberg Cement - Germany
- Chettinad Cement Corporation Ltd - India
- Vijayanagar Sugar Pvt Ltd - India
- Cigading International Bulk Terminal - Indonesia
- Videocon Industries ltd - India
- Ministry of Transport, Egypt
- Aboitiz Power Corporation - Philippines
- Kobexindo Tractors - Indoneisa
- Samtan Co., Ltd - South Korea
- Rio Tinto Coal - Australia
- Maharashtra Electricity Regulatory Commission - India
- Price Waterhouse Coopers - Russia
- The Treasury - Australian Government
- Coalindo Energy - Indonesia
- SMC Global Power, Philippines
- GN Power Mariveles Coal Plant, Philippines
- Bukit Baiduri Energy - Indonesia
- GAC Shipping (India) Pvt Ltd
- Holcim Trading Pte Ltd - Singapore
- Interocean Group of Companies - India
- Krishnapatnam Port Company Ltd. - India
- Petron Corporation, Philippines
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Ministry of Finance - Indonesia
- Gujarat Mineral Development Corp Ltd - India
- CIMB Investment Bank - Malaysia
- Eastern Energy - Thailand
- Thai Mozambique Logistica
- Antam Resourcindo - Indonesia
- Alfred C Toepfer International GmbH - Germany
- Kepco SPC Power Corporation, Philippines
- AsiaOL BioFuels Corp., Philippines
- Bank of Tokyo Mitsubishi UFJ Ltd
- Standard Chartered Bank - UAE
- Intertek Mineral Services - Indonesia
- San Jose City I Power Corp, Philippines
- Parry Sugars Refinery, India
- Minerals Council of Australia
- Agrawal Coal Company - India
- Anglo American - United Kingdom
- Mjunction Services Limited - India
- Central Java Power - Indonesia
- Essar Steel Hazira Ltd - India
- Renaissance Capital - South Africa
- Maheswari Brothers Coal Limited - India
- Bangladesh Power Developement Board
- Africa Commodities Group - South Africa
- Indogreen Group - Indonesia
- MS Steel International - UAE
- Binh Thuan Hamico - Vietnam
- Savvy Resources Ltd - HongKong
- Eastern Coal Council - USA
- Meenaskhi Energy Private Limited - India
- Trasteel International SA, Italy
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Port Waratah Coal Services - Australia
- Billiton Holdings Pty Ltd - Australia
- Medco Energi Mining Internasional
- Ambuja Cements Ltd - India
- Makarim & Taira - Indonesia
- International Coal Ventures Pvt Ltd - India
- Global Green Power PLC Corporation, Philippines
- Straits Asia Resources Limited - Singapore
- Globalindo Alam Lestari - Indonesia
- Kohat Cement Company Ltd. - Pakistan
- Sojitz Corporation - Japan
- Thiess Contractors Indonesia
- GMR Energy Limited - India
- Grasim Industreis Ltd - India
- European Bulk Services B.V. - Netherlands
- ASAPP Information Group - India
- Marubeni Corporation - India
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Barasentosa Lestari - Indonesia
- Directorate Of Revenue Intelligence - India
- Jorong Barutama Greston.PT - Indonesia
- Simpson Spence & Young - Indonesia
- PowerSource Philippines DevCo
- Sical Logistics Limited - India
- The State Trading Corporation of India Ltd
- Global Business Power Corporation, Philippines
- Indonesian Coal Mining Association
- Meralco Power Generation, Philippines
- Siam City Cement PLC, Thailand
- Bahari Cakrawala Sebuku - Indonesia
- Ceylon Electricity Board - Sri Lanka
- Latin American Coal - Colombia
- Ind-Barath Power Infra Limited - India
- Asmin Koalindo Tuhup - Indonesia
- Economic Council, Georgia
- Power Finance Corporation Ltd., India
- Vizag Seaport Private Limited - India
- McConnell Dowell - Australia
- Energy Link Ltd, New Zealand
- GVK Power & Infra Limited - India
- Bhatia International Limited - India
- Sree Jayajothi Cements Limited - India
- Bharathi Cement Corporation - India
- Formosa Plastics Group - Taiwan
- Petrochimia International Co. Ltd.- Taiwan
- Indika Energy - Indonesia
- IHS Mccloskey Coal Group - USA
- Directorate General of MIneral and Coal - Indonesia
- Tata Chemicals Ltd - India
- Sinarmas Energy and Mining - Indonesia
- Mintek Dendrill Indonesia
- Rashtriya Ispat Nigam Limited - India
- Electricity Authority, New Zealand
- SN Aboitiz Power Inc, Philippines
- Orica Mining Services - Indonesia
- Coal and Oil Company - UAE
- Sakthi Sugars Limited - India
- TNB Fuel Sdn Bhd - Malaysia
- Independent Power Producers Association of India
- Electricity Generating Authority of Thailand
- Indo Tambangraya Megah - Indonesia
- Wilmar Investment Holdings
- Indian Energy Exchange, India
- CNBM International Corporation - China
- South Luzon Thermal Energy Corporation
- PTC India Limited - India
- Toyota Tsusho Corporation, Japan
- Deloitte Consulting - India
- Tamil Nadu electricity Board
- Goldman Sachs - Singapore
- Attock Cement Pakistan Limited
- London Commodity Brokers - England
- Offshore Bulk Terminal Pte Ltd, Singapore
- Therma Luzon, Inc, Philippines
- Singapore Mercantile Exchange
- Larsen & Toubro Limited - India
- Bulk Trading Sa - Switzerland
- Indian Oil Corporation Limited
- Jaiprakash Power Ventures ltd
- Semirara Mining Corp, Philippines
- Oldendorff Carriers - Singapore
- Mercuria Energy - Indonesia
- Bukit Makmur.PT - Indonesia
- Kartika Selabumi Mining - Indonesia
- Gujarat Sidhee Cement - India
- Salva Resources Pvt Ltd - India
- PetroVietnam Power Coal Import and Supply Company
- Commonwealth Bank - Australia
- Bukit Asam (Persero) Tbk - Indonesia
- LBH Netherlands Bv - Netherlands
- Baramulti Group, Indonesia
- Gujarat Electricity Regulatory Commission - India
- Timah Investasi Mineral - Indoneisa
- Banpu Public Company Limited - Thailand
- Sarangani Energy Corporation, Philippines
- Australian Coal Association
- Leighton Contractors Pty Ltd - Australia
- White Energy Company Limited
- Global Coal Blending Company Limited - Australia
- Merrill Lynch Commodities Europe
- Bhushan Steel Limited - India
- Romanian Commodities Exchange
- Aditya Birla Group - India
- Kaltim Prima Coal - Indonesia
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Metalloyd Limited - United Kingdom
- Miang Besar Coal Terminal - Indonesia
- Vedanta Resources Plc - India
- The University of Queensland
- New Zealand Coal & Carbon
- Kapuas Tunggal Persada - Indonesia
- IEA Clean Coal Centre - UK
- Semirara Mining and Power Corporation, Philippines
- Jindal Steel & Power Ltd - India
- Karbindo Abesyapradhi - Indoneisa
- Posco Energy - South Korea
- Borneo Indobara - Indonesia
- Cement Manufacturers Association - India
- Karaikal Port Pvt Ltd - India
- Australian Commodity Traders Exchange
- Lanco Infratech Ltd - India
- Energy Development Corp, Philippines
- PNOC Exploration Corporation - Philippines
- Pipit Mutiara Jaya. PT, Indonesia
- Kideco Jaya Agung - Indonesia
- Pendopo Energi Batubara - Indonesia
- Ministry of Mines - Canada
- Neyveli Lignite Corporation Ltd, - India
- Coastal Gujarat Power Limited - India
- Orica Australia Pty. Ltd.
- VISA Power Limited - India
- India Bulls Power Limited - India
- SMG Consultants - Indonesia
- Carbofer General Trading SA - India
- Sindya Power Generating Company Private Ltd
- Mercator Lines Limited - India
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