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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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Saturday, 23 July 22
STABILITY OF RUSSIAN GAS FLOWS REMAIN UNCERTAIN, DESPITE THE REOPENING OF NORD STREAM - WOOD MACKENZIE
Gazprom confirmed today that regular annual maintenance of Nord Stream is officially over and gas flows restarted at 63 million cubic metres per da ...
Friday, 22 July 22
MARKET INSIGHT - INTERMODAL
Faced with uncertainty regarding the most cost-efficient alternative fuels and the future dominant method to reduce their greenhouse emissions, man ...
Friday, 22 July 22
YANCOAL AUSTRALIA CUTS 2022 COAL OUTPUT VIEW AS FLOODS, COVID BITE - REUTERS
Coal miner Yancoal Australia Ltd YAL.AX cut its 2022 output forecast on Wednesday, signalling a hit from higher-than-expected rainfall, COVID-19-le ...
Wednesday, 20 July 22
BOOST FOR BIOFUELS AS IMO REMOVES REGULATORY HURDLE - GARD
MARPOL Annex VI regulations were written for petroleum derived fuels but also apply to biofuels. It has been a challenge to meet the regulatory req ...
Wednesday, 20 July 22
INDONESIA’S COAL EXPORTS TO THE EU INCREASED SIGNIFICANTLY RECENTLY
European countries have increased coal imports from Indonesia due to the energy crisis that hit the region after Russia cuts gas exports to Europe. ...
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- Iligan Light & Power Inc, Philippines
- Kumho Petrochemical, South Korea
- Eastern Coal Council - USA
- Independent Power Producers Association of India
- Siam City Cement PLC, Thailand
- Vizag Seaport Private Limited - India
- Heidelberg Cement - Germany
- Xindia Steels Limited - India
- Billiton Holdings Pty Ltd - Australia
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Energy Development Corp, Philippines
- Planning Commission, India
- Timah Investasi Mineral - Indoneisa
- Pipit Mutiara Jaya. PT, Indonesia
- Bukit Asam (Persero) Tbk - Indonesia
- Australian Commodity Traders Exchange
- Bukit Baiduri Energy - Indonesia
- Indogreen Group - Indonesia
- CNBM International Corporation - China
- Gujarat Electricity Regulatory Commission - India
- Jaiprakash Power Ventures ltd
- Lanco Infratech Ltd - India
- Coal and Oil Company - UAE
- Minerals Council of Australia
- Vijayanagar Sugar Pvt Ltd - India
- Central Java Power - Indonesia
- Kideco Jaya Agung - Indonesia
- Simpson Spence & Young - Indonesia
- Bulk Trading Sa - Switzerland
- Posco Energy - South Korea
- Singapore Mercantile Exchange
- Indian Oil Corporation Limited
- Interocean Group of Companies - India
- Tata Chemicals Ltd - India
- Toyota Tsusho Corporation, Japan
- Essar Steel Hazira Ltd - India
- VISA Power Limited - India
- PTC India Limited - India
- Alfred C Toepfer International GmbH - Germany
- Altura Mining Limited, Indonesia
- Sinarmas Energy and Mining - Indonesia
- European Bulk Services B.V. - Netherlands
- Bhatia International Limited - India
- Miang Besar Coal Terminal - Indonesia
- Aditya Birla Group - India
- Barasentosa Lestari - Indonesia
- Parliament of New Zealand
- Karbindo Abesyapradhi - Indoneisa
- Ministry of Finance - Indonesia
- Global Coal Blending Company Limited - Australia
- GVK Power & Infra Limited - India
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Videocon Industries ltd - India
- SMG Consultants - Indonesia
- Riau Bara Harum - Indonesia
- Mercuria Energy - Indonesia
- IHS Mccloskey Coal Group - USA
- Chamber of Mines of South Africa
- Cement Manufacturers Association - India
- Petrochimia International Co. Ltd.- Taiwan
- TNB Fuel Sdn Bhd - Malaysia
- Dalmia Cement Bharat India
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Asmin Koalindo Tuhup - Indonesia
- Semirara Mining Corp, Philippines
- GN Power Mariveles Coal Plant, Philippines
- India Bulls Power Limited - India
- Indo Tambangraya Megah - Indonesia
- Carbofer General Trading SA - India
- Bhushan Steel Limited - India
- Rashtriya Ispat Nigam Limited - India
- Star Paper Mills Limited - India
- Central Electricity Authority - India
- CIMB Investment Bank - Malaysia
- Indonesian Coal Mining Association
- Petron Corporation, Philippines
- Price Waterhouse Coopers - Russia
- Bahari Cakrawala Sebuku - Indonesia
- PetroVietnam Power Coal Import and Supply Company
- White Energy Company Limited
- Thiess Contractors Indonesia
- Mercator Lines Limited - India
- Metalloyd Limited - United Kingdom
- Bank of Tokyo Mitsubishi UFJ Ltd
- Krishnapatnam Port Company Ltd. - India
- Commonwealth Bank - Australia
- Cigading International Bulk Terminal - Indonesia
- Parry Sugars Refinery, India
- Thai Mozambique Logistica
- Wilmar Investment Holdings
- Bayan Resources Tbk. - Indonesia
- Kartika Selabumi Mining - Indonesia
- Sical Logistics Limited - India
- Holcim Trading Pte Ltd - Singapore
- Borneo Indobara - Indonesia
- Banpu Public Company Limited - Thailand
- Samtan Co., Ltd - South Korea
- Makarim & Taira - Indonesia
- Karaikal Port Pvt Ltd - India
- Directorate Of Revenue Intelligence - India
- Binh Thuan Hamico - Vietnam
- IEA Clean Coal Centre - UK
- Rio Tinto Coal - Australia
- Uttam Galva Steels Limited - India
- Orica Mining Services - Indonesia
- Aboitiz Power Corporation - Philippines
- Coalindo Energy - Indonesia
- Wood Mackenzie - Singapore
- Bangladesh Power Developement Board
- Kaltim Prima Coal - Indonesia
- OPG Power Generation Pvt Ltd - India
- Global Business Power Corporation, Philippines
- SN Aboitiz Power Inc, Philippines
- Offshore Bulk Terminal Pte Ltd, Singapore
- Sree Jayajothi Cements Limited - India
- Straits Asia Resources Limited - Singapore
- ASAPP Information Group - India
- Sarangani Energy Corporation, Philippines
- PowerSource Philippines DevCo
- Kobexindo Tractors - Indoneisa
- Bharathi Cement Corporation - India
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Malabar Cements Ltd - India
- PNOC Exploration Corporation - Philippines
- McConnell Dowell - Australia
- Kohat Cement Company Ltd. - Pakistan
- Coastal Gujarat Power Limited - India
- Jorong Barutama Greston.PT - Indonesia
- Jindal Steel & Power Ltd - India
- Oldendorff Carriers - Singapore
- Antam Resourcindo - Indonesia
- Ministry of Mines - Canada
- Baramulti Group, Indonesia
- GMR Energy Limited - India
- MS Steel International - UAE
- Larsen & Toubro Limited - India
- Mintek Dendrill Indonesia
- Siam City Cement - Thailand
- Sojitz Corporation - Japan
- TeaM Sual Corporation - Philippines
- Standard Chartered Bank - UAE
- Maharashtra Electricity Regulatory Commission - India
- SMC Global Power, Philippines
- AsiaOL BioFuels Corp., Philippines
- Africa Commodities Group - South Africa
- GAC Shipping (India) Pvt Ltd
- Indian Energy Exchange, India
- Salva Resources Pvt Ltd - India
- San Jose City I Power Corp, Philippines
- Meralco Power Generation, Philippines
- Savvy Resources Ltd - HongKong
- Deloitte Consulting - India
- Directorate General of MIneral and Coal - Indonesia
- Ceylon Electricity Board - Sri Lanka
- Tamil Nadu electricity Board
- ICICI Bank Limited - India
- Energy Link Ltd, New Zealand
- Australian Coal Association
- Semirara Mining and Power Corporation, Philippines
- The Treasury - Australian Government
- Marubeni Corporation - India
- Georgia Ports Authority, United States
- Mjunction Services Limited - India
- Ambuja Cements Ltd - India
- Indika Energy - Indonesia
- The University of Queensland
- Orica Australia Pty. Ltd.
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Port Waratah Coal Services - Australia
- Pendopo Energi Batubara - Indonesia
- Romanian Commodities Exchange
- Medco Energi Mining Internasional
- New Zealand Coal & Carbon
- Sakthi Sugars Limited - India
- Renaissance Capital - South Africa
- Intertek Mineral Services - Indonesia
- London Commodity Brokers - England
- Chettinad Cement Corporation Ltd - India
- South Luzon Thermal Energy Corporation
- Maheswari Brothers Coal Limited - India
- Meenaskhi Energy Private Limited - India
- The State Trading Corporation of India Ltd
- Kalimantan Lumbung Energi - Indonesia
- International Coal Ventures Pvt Ltd - India
- Ministry of Transport, Egypt
- Electricity Generating Authority of Thailand
- Sindya Power Generating Company Private Ltd
- Neyveli Lignite Corporation Ltd, - India
- Electricity Authority, New Zealand
- Goldman Sachs - Singapore
- Therma Luzon, Inc, Philippines
- Global Green Power PLC Corporation, Philippines
- Bukit Makmur.PT - Indonesia
- Grasim Industreis Ltd - India
- Vedanta Resources Plc - India
- Gujarat Sidhee Cement - India
- Madhucon Powers Ltd - India
- Trasteel International SA, Italy
- Bhoruka Overseas - Indonesia
- Gujarat Mineral Development Corp Ltd - India
- Merrill Lynch Commodities Europe
- Formosa Plastics Group - Taiwan
- Kepco SPC Power Corporation, Philippines
- Leighton Contractors Pty Ltd - Australia
- Agrawal Coal Company - India
- Edison Trading Spa - Italy
- LBH Netherlands Bv - Netherlands
- Attock Cement Pakistan Limited
- Ind-Barath Power Infra Limited - India
- Power Finance Corporation Ltd., India
- Globalindo Alam Lestari - Indonesia
- Manunggal Multi Energi - Indonesia
- Latin American Coal - Colombia
- Economic Council, Georgia
- Kapuas Tunggal Persada - Indonesia
- Anglo American - United Kingdom
- Eastern Energy - Thailand
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