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