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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, 19 July 22
DRY BULK MARKET: CAPESIZE MARKET FIRMS THIS WEEK - BALTIC EXCHANGE
Capesize
Firmer sentiment across both basins pushed the Capesize 5TC route average above the $20,000 threshold this week, closing at $24,209. A ...
Tuesday, 19 July 22
WHY SHIPPING MIGHT BE ABOUT TO GET A LITTLE BIT SLOWER - WORLD ECONOMIC FORUM
If shipping is the beating heart of global trade, its pulse is about to get slower.
Faced with uncertainty about which fuels to use in the long ...
Tuesday, 19 July 22
GERMANY'S INCREASED COAL, OIL USE WILL BE TEMPORARY, SCHOLZ SAYS - CNBC
Chancellor Olaf Scholz says Germany’s decision to reactivate coal and oil-fired power plants to relieve energy shortages because of the war i ...
Tuesday, 19 July 22
INDONESIA REMOVES PALM OIL EXPORT LEVY UNTIL AUG. 31 - REUTERS
Indonesia has scrapped its export levy for all palm oil products until Aug. 31 in a fresh attempt to boost exports and ease high inventories, finan ...
Tuesday, 19 July 22
CHINA'S JUNE DAILY COAL OUTPUT JUMPS ON PEAK SUMMER DEMAND - REUTERS
China’s daily coal output in June rose 6.6 per cent from a month earlier as miners cranked up output ahead of peak summer temperatures, when ...
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- SMG Consultants - Indonesia
- Semirara Mining and Power Corporation, Philippines
- PNOC Exploration Corporation - Philippines
- Aditya Birla Group - India
- TeaM Sual Corporation - Philippines
- Bukit Baiduri Energy - Indonesia
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Trasteel International SA, Italy
- Eastern Energy - Thailand
- Neyveli Lignite Corporation Ltd, - India
- Price Waterhouse Coopers - Russia
- LBH Netherlands Bv - Netherlands
- CIMB Investment Bank - Malaysia
- Alfred C Toepfer International GmbH - Germany
- Bulk Trading Sa - Switzerland
- Coal and Oil Company - UAE
- Ministry of Mines - Canada
- Petron Corporation, Philippines
- Singapore Mercantile Exchange
- Wood Mackenzie - Singapore
- GAC Shipping (India) Pvt Ltd
- Merrill Lynch Commodities Europe
- Manunggal Multi Energi - Indonesia
- Iligan Light & Power Inc, Philippines
- Commonwealth Bank - Australia
- Kaltim Prima Coal - Indonesia
- Offshore Bulk Terminal Pte Ltd, Singapore
- Independent Power Producers Association of India
- Essar Steel Hazira Ltd - India
- Bhoruka Overseas - Indonesia
- Vizag Seaport Private Limited - India
- Intertek Mineral Services - Indonesia
- Thiess Contractors Indonesia
- Ind-Barath Power Infra Limited - India
- Bayan Resources Tbk. - Indonesia
- Karbindo Abesyapradhi - Indoneisa
- Coastal Gujarat Power Limited - India
- San Jose City I Power Corp, Philippines
- McConnell Dowell - Australia
- Maharashtra Electricity Regulatory Commission - India
- Australian Commodity Traders Exchange
- New Zealand Coal & Carbon
- Kartika Selabumi Mining - Indonesia
- Marubeni Corporation - India
- International Coal Ventures Pvt Ltd - India
- Port Waratah Coal Services - Australia
- Kideco Jaya Agung - Indonesia
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Timah Investasi Mineral - Indoneisa
- Karaikal Port Pvt Ltd - India
- Jindal Steel & Power Ltd - India
- ASAPP Information Group - India
- Kumho Petrochemical, South Korea
- Bukit Makmur.PT - Indonesia
- Billiton Holdings Pty Ltd - Australia
- OPG Power Generation Pvt Ltd - India
- Tata Chemicals Ltd - India
- Makarim & Taira - Indonesia
- IEA Clean Coal Centre - UK
- Economic Council, Georgia
- Cement Manufacturers Association - India
- Vijayanagar Sugar Pvt Ltd - India
- Heidelberg Cement - Germany
- MS Steel International - UAE
- Electricity Generating Authority of Thailand
- Star Paper Mills Limited - India
- Straits Asia Resources Limited - Singapore
- Bharathi Cement Corporation - India
- Sindya Power Generating Company Private Ltd
- Kapuas Tunggal Persada - Indonesia
- Indian Oil Corporation Limited
- Bangladesh Power Developement Board
- Bukit Asam (Persero) Tbk - Indonesia
- Carbofer General Trading SA - India
- CNBM International Corporation - China
- European Bulk Services B.V. - Netherlands
- Indonesian Coal Mining Association
- Xindia Steels Limited - India
- Leighton Contractors Pty Ltd - Australia
- Ambuja Cements Ltd - India
- GVK Power & Infra Limited - India
- Power Finance Corporation Ltd., India
- Mintek Dendrill Indonesia
- Samtan Co., Ltd - South Korea
- Standard Chartered Bank - UAE
- Borneo Indobara - Indonesia
- GMR Energy Limited - India
- Therma Luzon, Inc, Philippines
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Vedanta Resources Plc - India
- Chamber of Mines of South Africa
- Savvy Resources Ltd - HongKong
- Mjunction Services Limited - India
- Binh Thuan Hamico - Vietnam
- Uttam Galva Steels Limited - India
- Sarangani Energy Corporation, Philippines
- Global Coal Blending Company Limited - Australia
- Indian Energy Exchange, India
- The Treasury - Australian Government
- Maheswari Brothers Coal Limited - India
- Medco Energi Mining Internasional
- PetroVietnam Power Coal Import and Supply Company
- Gujarat Electricity Regulatory Commission - India
- Gujarat Mineral Development Corp Ltd - India
- Central Java Power - Indonesia
- Cigading International Bulk Terminal - Indonesia
- Global Business Power Corporation, Philippines
- Kobexindo Tractors - Indoneisa
- VISA Power Limited - India
- Ceylon Electricity Board - Sri Lanka
- Bahari Cakrawala Sebuku - Indonesia
- Jaiprakash Power Ventures ltd
- Goldman Sachs - Singapore
- Siam City Cement PLC, Thailand
- Jorong Barutama Greston.PT - Indonesia
- Antam Resourcindo - Indonesia
- Metalloyd Limited - United Kingdom
- Thai Mozambique Logistica
- Mercuria Energy - Indonesia
- PowerSource Philippines DevCo
- Mercator Lines Limited - India
- Holcim Trading Pte Ltd - Singapore
- Parry Sugars Refinery, India
- Coalindo Energy - Indonesia
- Ministry of Finance - Indonesia
- Latin American Coal - Colombia
- Edison Trading Spa - Italy
- Energy Link Ltd, New Zealand
- Wilmar Investment Holdings
- Orica Australia Pty. Ltd.
- Lanco Infratech Ltd - India
- Bhatia International Limited - India
- Salva Resources Pvt Ltd - India
- Energy Development Corp, Philippines
- PTC India Limited - India
- Indo Tambangraya Megah - Indonesia
- Dalmia Cement Bharat India
- Pendopo Energi Batubara - Indonesia
- Bank of Tokyo Mitsubishi UFJ Ltd
- TNB Fuel Sdn Bhd - Malaysia
- Sinarmas Energy and Mining - Indonesia
- Globalindo Alam Lestari - Indonesia
- London Commodity Brokers - England
- SMC Global Power, Philippines
- Pipit Mutiara Jaya. PT, Indonesia
- Kepco SPC Power Corporation, Philippines
- Simpson Spence & Young - Indonesia
- Baramulti Group, Indonesia
- Kohat Cement Company Ltd. - Pakistan
- Global Green Power PLC Corporation, Philippines
- Videocon Industries ltd - India
- Indika Energy - Indonesia
- Chettinad Cement Corporation Ltd - India
- Kalimantan Lumbung Energi - Indonesia
- AsiaOL BioFuels Corp., Philippines
- SN Aboitiz Power Inc, Philippines
- GN Power Mariveles Coal Plant, Philippines
- Anglo American - United Kingdom
- Orica Mining Services - Indonesia
- Meralco Power Generation, Philippines
- South Luzon Thermal Energy Corporation
- Meenaskhi Energy Private Limited - India
- Grasim Industreis Ltd - India
- Krishnapatnam Port Company Ltd. - India
- Interocean Group of Companies - India
- Attock Cement Pakistan Limited
- Madhucon Powers Ltd - India
- Georgia Ports Authority, United States
- Gujarat Sidhee Cement - India
- Rio Tinto Coal - Australia
- Semirara Mining Corp, Philippines
- ICICI Bank Limited - India
- The State Trading Corporation of India Ltd
- Siam City Cement - Thailand
- Toyota Tsusho Corporation, Japan
- Sical Logistics Limited - India
- Petrochimia International Co. Ltd.- Taiwan
- Oldendorff Carriers - Singapore
- India Bulls Power Limited - India
- Formosa Plastics Group - Taiwan
- Agrawal Coal Company - India
- Miang Besar Coal Terminal - Indonesia
- Rashtriya Ispat Nigam Limited - India
- Central Electricity Authority - India
- Tamil Nadu electricity Board
- Sojitz Corporation - Japan
- Posco Energy - South Korea
- White Energy Company Limited
- Banpu Public Company Limited - Thailand
- Bhushan Steel Limited - India
- Eastern Coal Council - USA
- Indogreen Group - Indonesia
- Electricity Authority, New Zealand
- Directorate Of Revenue Intelligence - India
- Australian Coal Association
- Minerals Council of Australia
- Deloitte Consulting - India
- Ministry of Transport, Egypt
- Planning Commission, India
- The University of Queensland
- Aboitiz Power Corporation - Philippines
- Sree Jayajothi Cements Limited - India
- Riau Bara Harum - Indonesia
- Directorate General of MIneral and Coal - Indonesia
- Asmin Koalindo Tuhup - Indonesia
- Barasentosa Lestari - Indonesia
- Larsen & Toubro Limited - India
- IHS Mccloskey Coal Group - USA
- Renaissance Capital - South Africa
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Parliament of New Zealand
- Africa Commodities Group - South Africa
- Altura Mining Limited, Indonesia
- Romanian Commodities Exchange
- Malabar Cements Ltd - India
- Sakthi Sugars Limited - India
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