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Wednesday, 13 July 22
MARKET INSIGHT - INTERMODAL
 Taking the previous market insight a step further, market sentiment remains bullish regarding the overall ROI of scrubbers, facing tailwinds from a surprisingly favorable Hi-5 spread. Under a blurred setting regarding the direction and efficiency of alternative fuels and the current geopolitical disruptions, owners tend to adopt a medium-term approach to the evaluation of their investment towards decarbonization, rather than a long-term which might be overturned.
Recent studies have shown that running on HSFO and on a scrubber produces way lower emissions than running on LSMGO, further confirming the viability of a scrubber investment. Currently, owners who will drydock their vessels soon are increasingly considering investing in pollution abatement technology, in return for the benefits from the expected savings in the bunkering costs.
Coming down to the decision-making, the choice of scrubber type is a key factor that shapes the fitting cost but will mostly affect future savings and compliance with changing regulations. While most vessels carry open-loop scrubbers, many vessels fitted now opt for hybrid types, which offer increased flexibility for operation in all areas, regardless of ECA’s constraining rules or seawater alkalinity. Technological investments have a special mechanism of assessment, therefore, payback period, level of risk, tax prospects and expected inflation should be considered. The main criteria regarding the justification of a scrubber investment should be the ROI (including CAPEX & OPEX), the space occupied, and the weight, with horizontal scrubbers weighting less and covering less space compared to vertical ones, thus, minimizing the impact on a vessel’s cargo-carrying capacity and its profitability. Due to the funding difference of the technology implementation, the terms of inflows (fuel savings) and outflows (CAPEX & OPEX) should be identified, while the determining factor will be the maximum payback period.
Currently, owners who have already invested in scrubbers are enjoying a high ROI, while benefiting from more than $500/t Hi-5 spreads. For instance, in Singapore it was assessed at an all-time high of $569.50/t on July 5th, creating, therefore, the perfect scenario for scrubber-equipped ships. In Fujairah, the set-up is pretty much similar with the spread fluctuating close to the $500/t range. While HSFO markets in Asia have been weakening on the back of sanctions on Urals crude in Europe and the US, VLSFO markets are seeing a tight supply as refineries have been utilizing sweeter crude to maximize gasoline production to meet the demand for the peak driving season in the US and due to the expanded regional turnaround and strong gasoline cracks.
At the moment, retrofitting times vary between 30 and 50 days, which is important to consider under the current market conditions. According to our data, retrofits now take place at a slower pace, while during 1H of 2022 only 3.7% of newbuilt vessels are scrubber fitted, compared to 13.9% during 1H of 2021. Since investments in technology are capital intensive, owners tend to keep a more conservative stance and ensure a balance in their fleets, until clarity is given on what will be the most cost-efficient and dominant compliant method.
By Chara Georgousi,
Research Analyst
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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Tuesday, 26 July 22
CAP RUSSIA'S OIL PRICE NOW - PROJECT SYNDICATE
Though the price of oil has declined in recent weeks, it is still through the roof, filtering through to gasoline prices, and causing economic and ...
Tuesday, 26 July 22
WILL SOUTH AMERICA’S WINTER DEMAND DRAW LNG CARGOES AWAY FROM EUROPE? - ICIS
South America is now in the middle of its winter demand season. Last year the region increased its share of global LNG imports in winter, with Braz ...
Monday, 25 July 22
GLOBAL 2021 COAL-FIRED ELECTRICITY GENERATION SURGES TO RECORD HIGH - REUTERS
By contrast, mine output was still fractionally below the record set between 2012 and 2014 because older and less efficient coal generators have be ...
Saturday, 23 July 22
THE EU HAS BEEN REDUCING IMPORTS OF RUSSIAN REFINED OIL PRODUCTS SINCE MARCH - BANCHERO COSTA
The European Union could now ban the import and transit of fuel oil from Russia around six months ahead of the planned deadline, an EU official and ...
Saturday, 23 July 22
INDONESIA CONSIDERING SCRAPPING DOMESTIC SALES RULE FOR PALM OIL EXPORTS - REUTERS
Indonesia is considering removing a domestic sales requirement for palm oil exports because high inventories of the vegetable oil have been holding ...
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- Parry Sugars Refinery, India
- IHS Mccloskey Coal Group - USA
- Billiton Holdings Pty Ltd - Australia
- Attock Cement Pakistan Limited
- Maheswari Brothers Coal Limited - India
- Indian Oil Corporation Limited
- McConnell Dowell - Australia
- SMC Global Power, Philippines
- Antam Resourcindo - Indonesia
- Medco Energi Mining Internasional
- Ambuja Cements Ltd - India
- International Coal Ventures Pvt Ltd - India
- The State Trading Corporation of India Ltd
- Karbindo Abesyapradhi - Indoneisa
- MS Steel International - UAE
- Directorate General of MIneral and Coal - Indonesia
- Australian Commodity Traders Exchange
- Baramulti Group, Indonesia
- Posco Energy - South Korea
- Bangladesh Power Developement Board
- Eastern Coal Council - USA
- Barasentosa Lestari - Indonesia
- TNB Fuel Sdn Bhd - Malaysia
- Star Paper Mills Limited - India
- Merrill Lynch Commodities Europe
- Global Green Power PLC Corporation, Philippines
- CIMB Investment Bank - Malaysia
- Kideco Jaya Agung - Indonesia
- Uttam Galva Steels Limited - India
- Makarim & Taira - Indonesia
- Africa Commodities Group - South Africa
- Bhushan Steel Limited - India
- Gujarat Mineral Development Corp Ltd - India
- Alfred C Toepfer International GmbH - Germany
- South Luzon Thermal Energy Corporation
- The Treasury - Australian Government
- Formosa Plastics Group - Taiwan
- Petron Corporation, Philippines
- Ministry of Finance - Indonesia
- Krishnapatnam Port Company Ltd. - India
- Coal and Oil Company - UAE
- Essar Steel Hazira Ltd - India
- Electricity Generating Authority of Thailand
- Chettinad Cement Corporation Ltd - India
- Central Electricity Authority - India
- PNOC Exploration Corporation - Philippines
- Planning Commission, India
- Tata Chemicals Ltd - India
- Altura Mining Limited, Indonesia
- Aboitiz Power Corporation - Philippines
- Bukit Baiduri Energy - Indonesia
- TeaM Sual Corporation - Philippines
- Bulk Trading Sa - Switzerland
- Bhatia International Limited - India
- Miang Besar Coal Terminal - Indonesia
- Latin American Coal - Colombia
- Meenaskhi Energy Private Limited - India
- Manunggal Multi Energi - Indonesia
- Indo Tambangraya Megah - Indonesia
- Rio Tinto Coal - Australia
- Pipit Mutiara Jaya. PT, Indonesia
- Bayan Resources Tbk. - Indonesia
- Simpson Spence & Young - Indonesia
- Port Waratah Coal Services - Australia
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Wilmar Investment Holdings
- Timah Investasi Mineral - Indoneisa
- Edison Trading Spa - Italy
- Rashtriya Ispat Nigam Limited - India
- Asmin Koalindo Tuhup - Indonesia
- Bahari Cakrawala Sebuku - Indonesia
- Leighton Contractors Pty Ltd - Australia
- India Bulls Power Limited - India
- Bukit Makmur.PT - Indonesia
- Offshore Bulk Terminal Pte Ltd, Singapore
- Neyveli Lignite Corporation Ltd, - India
- Indian Energy Exchange, India
- Lanco Infratech Ltd - India
- Sarangani Energy Corporation, Philippines
- Therma Luzon, Inc, Philippines
- Iligan Light & Power Inc, Philippines
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- San Jose City I Power Corp, Philippines
- Samtan Co., Ltd - South Korea
- Banpu Public Company Limited - Thailand
- Grasim Industreis Ltd - India
- Ceylon Electricity Board - Sri Lanka
- Jaiprakash Power Ventures ltd
- Energy Development Corp, Philippines
- Parliament of New Zealand
- Vedanta Resources Plc - India
- Singapore Mercantile Exchange
- Mercuria Energy - Indonesia
- Meralco Power Generation, Philippines
- Holcim Trading Pte Ltd - Singapore
- Semirara Mining Corp, Philippines
- Tamil Nadu electricity Board
- Ind-Barath Power Infra Limited - India
- Pendopo Energi Batubara - Indonesia
- Georgia Ports Authority, United States
- Bharathi Cement Corporation - India
- Thiess Contractors Indonesia
- Power Finance Corporation Ltd., India
- Gujarat Sidhee Cement - India
- CNBM International Corporation - China
- Carbofer General Trading SA - India
- Sojitz Corporation - Japan
- Oldendorff Carriers - Singapore
- Eastern Energy - Thailand
- Intertek Mineral Services - Indonesia
- Ministry of Transport, Egypt
- Vizag Seaport Private Limited - India
- Ministry of Mines - Canada
- Energy Link Ltd, New Zealand
- Petrochimia International Co. Ltd.- Taiwan
- Gujarat Electricity Regulatory Commission - India
- Indonesian Coal Mining Association
- GAC Shipping (India) Pvt Ltd
- ASAPP Information Group - India
- Trasteel International SA, Italy
- Heidelberg Cement - Germany
- Borneo Indobara - Indonesia
- Semirara Mining and Power Corporation, Philippines
- Kalimantan Lumbung Energi - Indonesia
- Coastal Gujarat Power Limited - India
- Cement Manufacturers Association - India
- Coalindo Energy - Indonesia
- The University of Queensland
- New Zealand Coal & Carbon
- Orica Australia Pty. Ltd.
- Metalloyd Limited - United Kingdom
- Orica Mining Services - Indonesia
- Siam City Cement - Thailand
- LBH Netherlands Bv - Netherlands
- ICICI Bank Limited - India
- Central Java Power - Indonesia
- Goldman Sachs - Singapore
- AsiaOL BioFuels Corp., Philippines
- Malabar Cements Ltd - India
- Global Coal Blending Company Limited - Australia
- Bukit Asam (Persero) Tbk - Indonesia
- Toyota Tsusho Corporation, Japan
- Indika Energy - Indonesia
- Anglo American - United Kingdom
- Chamber of Mines of South Africa
- IEA Clean Coal Centre - UK
- Riau Bara Harum - Indonesia
- Binh Thuan Hamico - Vietnam
- Marubeni Corporation - India
- Minerals Council of Australia
- Mintek Dendrill Indonesia
- Kumho Petrochemical, South Korea
- Renaissance Capital - South Africa
- Mercator Lines Limited - India
- GVK Power & Infra Limited - India
- Wood Mackenzie - Singapore
- Kepco SPC Power Corporation, Philippines
- London Commodity Brokers - England
- Independent Power Producers Association of India
- Kobexindo Tractors - Indoneisa
- Globalindo Alam Lestari - Indonesia
- Price Waterhouse Coopers - Russia
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Karaikal Port Pvt Ltd - India
- Kohat Cement Company Ltd. - Pakistan
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Bhoruka Overseas - Indonesia
- Straits Asia Resources Limited - Singapore
- Australian Coal Association
- Vijayanagar Sugar Pvt Ltd - India
- Madhucon Powers Ltd - India
- Commonwealth Bank - Australia
- VISA Power Limited - India
- Global Business Power Corporation, Philippines
- Deloitte Consulting - India
- Videocon Industries ltd - India
- OPG Power Generation Pvt Ltd - India
- Sinarmas Energy and Mining - Indonesia
- Economic Council, Georgia
- Sical Logistics Limited - India
- Electricity Authority, New Zealand
- European Bulk Services B.V. - Netherlands
- SMG Consultants - Indonesia
- Interocean Group of Companies - India
- PowerSource Philippines DevCo
- SN Aboitiz Power Inc, Philippines
- Mjunction Services Limited - India
- Romanian Commodities Exchange
- Agrawal Coal Company - India
- Jorong Barutama Greston.PT - Indonesia
- Sree Jayajothi Cements Limited - India
- GMR Energy Limited - India
- PTC India Limited - India
- White Energy Company Limited
- Salva Resources Pvt Ltd - India
- Kapuas Tunggal Persada - Indonesia
- Thai Mozambique Logistica
- Standard Chartered Bank - UAE
- Sindya Power Generating Company Private Ltd
- Kaltim Prima Coal - Indonesia
- Aditya Birla Group - India
- Directorate Of Revenue Intelligence - India
- Cigading International Bulk Terminal - Indonesia
- Dalmia Cement Bharat India
- PetroVietnam Power Coal Import and Supply Company
- Savvy Resources Ltd - HongKong
- GN Power Mariveles Coal Plant, Philippines
- Larsen & Toubro Limited - India
- Siam City Cement PLC, Thailand
- Kartika Selabumi Mining - Indonesia
- Xindia Steels Limited - India
- Maharashtra Electricity Regulatory Commission - India
- Bank of Tokyo Mitsubishi UFJ Ltd
- Indogreen Group - Indonesia
- Jindal Steel & Power Ltd - India
- Sakthi Sugars Limited - India
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