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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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- Timah Investasi Mineral - Indoneisa
- Kalimantan Lumbung Energi - Indonesia
- Sical Logistics Limited - India
- Manunggal Multi Energi - Indonesia
- Deloitte Consulting - India
- Oldendorff Carriers - Singapore
- Cigading International Bulk Terminal - Indonesia
- Bulk Trading Sa - Switzerland
- Straits Asia Resources Limited - Singapore
- Mercuria Energy - Indonesia
- Neyveli Lignite Corporation Ltd, - India
- Commonwealth Bank - Australia
- Baramulti Group, Indonesia
- Wilmar Investment Holdings
- Chamber of Mines of South Africa
- Bhatia International Limited - India
- Ind-Barath Power Infra Limited - India
- GN Power Mariveles Coal Plant, Philippines
- Electricity Generating Authority of Thailand
- Xindia Steels Limited - India
- Karbindo Abesyapradhi - Indoneisa
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Toyota Tsusho Corporation, Japan
- Krishnapatnam Port Company Ltd. - India
- Globalindo Alam Lestari - Indonesia
- Barasentosa Lestari - Indonesia
- Port Waratah Coal Services - Australia
- PTC India Limited - India
- Gujarat Mineral Development Corp Ltd - India
- Eastern Energy - Thailand
- ASAPP Information Group - India
- Indika Energy - Indonesia
- Heidelberg Cement - Germany
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Videocon Industries ltd - India
- OPG Power Generation Pvt Ltd - India
- Sojitz Corporation - Japan
- Meenaskhi Energy Private Limited - India
- Petron Corporation, Philippines
- Bangladesh Power Developement Board
- Latin American Coal - Colombia
- Bukit Baiduri Energy - Indonesia
- Edison Trading Spa - Italy
- Karaikal Port Pvt Ltd - India
- London Commodity Brokers - England
- The University of Queensland
- Goldman Sachs - Singapore
- Chettinad Cement Corporation Ltd - India
- Maharashtra Electricity Regulatory Commission - India
- Jorong Barutama Greston.PT - Indonesia
- Essar Steel Hazira Ltd - India
- Kideco Jaya Agung - Indonesia
- Georgia Ports Authority, United States
- Wood Mackenzie - Singapore
- Miang Besar Coal Terminal - Indonesia
- Power Finance Corporation Ltd., India
- Semirara Mining Corp, Philippines
- Romanian Commodities Exchange
- Sindya Power Generating Company Private Ltd
- Bukit Asam (Persero) Tbk - Indonesia
- Jaiprakash Power Ventures ltd
- Sinarmas Energy and Mining - Indonesia
- Australian Coal Association
- Offshore Bulk Terminal Pte Ltd, Singapore
- Indo Tambangraya Megah - Indonesia
- Africa Commodities Group - South Africa
- Australian Commodity Traders Exchange
- Siam City Cement PLC, Thailand
- Kaltim Prima Coal - Indonesia
- Altura Mining Limited, Indonesia
- Cement Manufacturers Association - India
- Semirara Mining and Power Corporation, Philippines
- Uttam Galva Steels Limited - India
- GAC Shipping (India) Pvt Ltd
- Agrawal Coal Company - India
- Energy Link Ltd, New Zealand
- LBH Netherlands Bv - Netherlands
- PNOC Exploration Corporation - Philippines
- Global Business Power Corporation, Philippines
- Kohat Cement Company Ltd. - Pakistan
- Bhoruka Overseas - Indonesia
- India Bulls Power Limited - India
- Coal and Oil Company - UAE
- SN Aboitiz Power Inc, Philippines
- Medco Energi Mining Internasional
- New Zealand Coal & Carbon
- Tamil Nadu electricity Board
- Borneo Indobara - Indonesia
- Standard Chartered Bank - UAE
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Vedanta Resources Plc - India
- Petrochimia International Co. Ltd.- Taiwan
- VISA Power Limited - India
- SMG Consultants - Indonesia
- Sakthi Sugars Limited - India
- CIMB Investment Bank - Malaysia
- Savvy Resources Ltd - HongKong
- Renaissance Capital - South Africa
- Trasteel International SA, Italy
- Global Green Power PLC Corporation, Philippines
- Eastern Coal Council - USA
- Price Waterhouse Coopers - Russia
- TeaM Sual Corporation - Philippines
- South Luzon Thermal Energy Corporation
- Asmin Koalindo Tuhup - Indonesia
- Alfred C Toepfer International GmbH - Germany
- PetroVietnam Power Coal Import and Supply Company
- Pipit Mutiara Jaya. PT, Indonesia
- Anglo American - United Kingdom
- Independent Power Producers Association of India
- European Bulk Services B.V. - Netherlands
- Kumho Petrochemical, South Korea
- Vijayanagar Sugar Pvt Ltd - India
- Central Java Power - Indonesia
- GMR Energy Limited - India
- Sarangani Energy Corporation, Philippines
- Central Electricity Authority - India
- ICICI Bank Limited - India
- Attock Cement Pakistan Limited
- Banpu Public Company Limited - Thailand
- Orica Mining Services - Indonesia
- Singapore Mercantile Exchange
- Holcim Trading Pte Ltd - Singapore
- Mintek Dendrill Indonesia
- CNBM International Corporation - China
- Energy Development Corp, Philippines
- Coalindo Energy - Indonesia
- Maheswari Brothers Coal Limited - India
- Malabar Cements Ltd - India
- San Jose City I Power Corp, Philippines
- Parry Sugars Refinery, India
- Intertek Mineral Services - Indonesia
- Carbofer General Trading SA - India
- Metalloyd Limited - United Kingdom
- Antam Resourcindo - Indonesia
- International Coal Ventures Pvt Ltd - India
- Posco Energy - South Korea
- Kapuas Tunggal Persada - Indonesia
- Binh Thuan Hamico - Vietnam
- Bharathi Cement Corporation - India
- Larsen & Toubro Limited - India
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Indian Oil Corporation Limited
- IHS Mccloskey Coal Group - USA
- Dalmia Cement Bharat India
- Star Paper Mills Limited - India
- AsiaOL BioFuels Corp., Philippines
- Economic Council, Georgia
- Directorate Of Revenue Intelligence - India
- Merrill Lynch Commodities Europe
- Makarim & Taira - Indonesia
- Bhushan Steel Limited - India
- Orica Australia Pty. Ltd.
- Simpson Spence & Young - Indonesia
- Thiess Contractors Indonesia
- Indonesian Coal Mining Association
- Billiton Holdings Pty Ltd - Australia
- Tata Chemicals Ltd - India
- Indogreen Group - Indonesia
- Planning Commission, India
- Marubeni Corporation - India
- Indian Energy Exchange, India
- Aditya Birla Group - India
- Meralco Power Generation, Philippines
- Minerals Council of Australia
- MS Steel International - UAE
- Parliament of New Zealand
- Thai Mozambique Logistica
- Rio Tinto Coal - Australia
- Directorate General of MIneral and Coal - Indonesia
- Sree Jayajothi Cements Limited - India
- Siam City Cement - Thailand
- Ambuja Cements Ltd - India
- Vizag Seaport Private Limited - India
- Madhucon Powers Ltd - India
- Electricity Authority, New Zealand
- Coastal Gujarat Power Limited - India
- Pendopo Energi Batubara - Indonesia
- Interocean Group of Companies - India
- Gujarat Sidhee Cement - India
- Mjunction Services Limited - India
- Therma Luzon, Inc, Philippines
- Aboitiz Power Corporation - Philippines
- SMC Global Power, Philippines
- PowerSource Philippines DevCo
- Mercator Lines Limited - India
- Riau Bara Harum - Indonesia
- The State Trading Corporation of India Ltd
- Kartika Selabumi Mining - Indonesia
- The Treasury - Australian Government
- Leighton Contractors Pty Ltd - Australia
- Salva Resources Pvt Ltd - India
- Ceylon Electricity Board - Sri Lanka
- Kepco SPC Power Corporation, Philippines
- Bayan Resources Tbk. - Indonesia
- Ministry of Mines - Canada
- Bukit Makmur.PT - Indonesia
- Jindal Steel & Power Ltd - India
- Samtan Co., Ltd - South Korea
- TNB Fuel Sdn Bhd - Malaysia
- Ministry of Transport, Egypt
- Bahari Cakrawala Sebuku - Indonesia
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- GVK Power & Infra Limited - India
- Ministry of Finance - Indonesia
- McConnell Dowell - Australia
- IEA Clean Coal Centre - UK
- Bank of Tokyo Mitsubishi UFJ Ltd
- Iligan Light & Power Inc, Philippines
- White Energy Company Limited
- Gujarat Electricity Regulatory Commission - India
- Formosa Plastics Group - Taiwan
- Grasim Industreis Ltd - India
- Rashtriya Ispat Nigam Limited - India
- Lanco Infratech Ltd - India
- Global Coal Blending Company Limited - Australia
- Kobexindo Tractors - Indoneisa
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