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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
SEEING RED? - WOOD MACKENZIE
What a Republican mid-term victory could mean for US energy and climate policy
According to current polling the Republican Party has ...
Thursday, 14 July 22
INDIA'S COAL IMPORTS HIT RECORD HIGH IN JUNE - REUTERS
India's coal imports hit a record high in June despite high global prices, data from three trade sources and Refinitiv ship tracking showed, as ...
Thursday, 14 July 22
CHINA'S JUNE COAL IMPORTS SLUMP AS TRADERS SHUN EXPENSIVE OVERSEAS CARGOES - REUTERS
China’s coal imports fell 33% in June from a year ago, with traders turning down expensive overseas cargoes in favor of domestic ones with ca ...
Wednesday, 13 July 22
KOWEPO TO IMPORT 2.79 MILLION TONS OF LOW TO MEDIUM COAL
COALspot.com: Korea Western Power Co., Ltd. (KOWEPO) has issued an International tender for Total 1360k MT of Min.4400 kcal/kg NCV coal and Total 1 ...
Wednesday, 13 July 22
HAVE MINERS MISSED THE BOAT TO INVEST AND GET AHEAD OF THE ENERGY TRANSITION? - WOOD MACKENZIE
Miners are in rude health, benefiting from economic stimuli, the post-pandemic recovery and associated supply constraints. Initially the Ukraine wa ...
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- Planning Commission, India
- Barasentosa Lestari - Indonesia
- Deloitte Consulting - India
- Trasteel International SA, Italy
- Aditya Birla Group - India
- Makarim & Taira - Indonesia
- Holcim Trading Pte Ltd - Singapore
- Ceylon Electricity Board - Sri Lanka
- Australian Coal Association
- Asmin Koalindo Tuhup - Indonesia
- Salva Resources Pvt Ltd - India
- Sindya Power Generating Company Private Ltd
- Goldman Sachs - Singapore
- Essar Steel Hazira Ltd - India
- Pendopo Energi Batubara - Indonesia
- Indo Tambangraya Megah - Indonesia
- PetroVietnam Power Coal Import and Supply Company
- Oldendorff Carriers - Singapore
- Semirara Mining Corp, Philippines
- Dalmia Cement Bharat India
- Baramulti Group, Indonesia
- Mintek Dendrill Indonesia
- Kaltim Prima Coal - Indonesia
- Borneo Indobara - Indonesia
- Sical Logistics Limited - India
- Kumho Petrochemical, South Korea
- Bulk Trading Sa - Switzerland
- ASAPP Information Group - India
- Global Coal Blending Company Limited - Australia
- SMG Consultants - Indonesia
- Eastern Energy - Thailand
- Latin American Coal - Colombia
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Altura Mining Limited, Indonesia
- Directorate Of Revenue Intelligence - India
- Gujarat Sidhee Cement - India
- Lanco Infratech Ltd - India
- Posco Energy - South Korea
- Wood Mackenzie - Singapore
- Bayan Resources Tbk. - Indonesia
- Heidelberg Cement - Germany
- Manunggal Multi Energi - Indonesia
- Krishnapatnam Port Company Ltd. - India
- Toyota Tsusho Corporation, Japan
- Kapuas Tunggal Persada - Indonesia
- Kideco Jaya Agung - Indonesia
- Marubeni Corporation - India
- Semirara Mining and Power Corporation, Philippines
- Meralco Power Generation, Philippines
- Africa Commodities Group - South Africa
- Bukit Asam (Persero) Tbk - Indonesia
- Sojitz Corporation - Japan
- Coal and Oil Company - UAE
- Chamber of Mines of South Africa
- Uttam Galva Steels Limited - India
- Tata Chemicals Ltd - India
- Merrill Lynch Commodities Europe
- Globalindo Alam Lestari - Indonesia
- South Luzon Thermal Energy Corporation
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Eastern Coal Council - USA
- TNB Fuel Sdn Bhd - Malaysia
- Cigading International Bulk Terminal - Indonesia
- Energy Link Ltd, New Zealand
- The Treasury - Australian Government
- Renaissance Capital - South Africa
- Ministry of Mines - Canada
- Xindia Steels Limited - India
- Riau Bara Harum - Indonesia
- PTC India Limited - India
- Commonwealth Bank - Australia
- Pipit Mutiara Jaya. PT, Indonesia
- IHS Mccloskey Coal Group - USA
- Indika Energy - Indonesia
- Cement Manufacturers Association - India
- Iligan Light & Power Inc, Philippines
- Ind-Barath Power Infra Limited - India
- Sakthi Sugars Limited - India
- Rashtriya Ispat Nigam Limited - India
- Global Business Power Corporation, Philippines
- Straits Asia Resources Limited - Singapore
- Siam City Cement - Thailand
- Kohat Cement Company Ltd. - Pakistan
- Economic Council, Georgia
- Jindal Steel & Power Ltd - India
- San Jose City I Power Corp, Philippines
- Independent Power Producers Association of India
- Ambuja Cements Ltd - India
- Directorate General of MIneral and Coal - Indonesia
- Kartika Selabumi Mining - Indonesia
- TeaM Sual Corporation - Philippines
- The State Trading Corporation of India Ltd
- Binh Thuan Hamico - Vietnam
- Jaiprakash Power Ventures ltd
- Therma Luzon, Inc, Philippines
- Orica Australia Pty. Ltd.
- Bhushan Steel Limited - India
- Mercator Lines Limited - India
- Petrochimia International Co. Ltd.- Taiwan
- Bank of Tokyo Mitsubishi UFJ Ltd
- Vizag Seaport Private Limited - India
- Kalimantan Lumbung Energi - Indonesia
- Ministry of Finance - Indonesia
- GMR Energy Limited - India
- Samtan Co., Ltd - South Korea
- Madhucon Powers Ltd - India
- Central Electricity Authority - India
- Leighton Contractors Pty Ltd - Australia
- Electricity Authority, New Zealand
- Parry Sugars Refinery, India
- Vedanta Resources Plc - India
- Minerals Council of Australia
- LBH Netherlands Bv - Netherlands
- Simpson Spence & Young - Indonesia
- Indian Oil Corporation Limited
- Offshore Bulk Terminal Pte Ltd, Singapore
- Antam Resourcindo - Indonesia
- Meenaskhi Energy Private Limited - India
- Coastal Gujarat Power Limited - India
- IEA Clean Coal Centre - UK
- Indonesian Coal Mining Association
- Bhatia International Limited - India
- Formosa Plastics Group - Taiwan
- Wilmar Investment Holdings
- OPG Power Generation Pvt Ltd - India
- Miang Besar Coal Terminal - Indonesia
- Australian Commodity Traders Exchange
- Power Finance Corporation Ltd., India
- Bukit Baiduri Energy - Indonesia
- Indogreen Group - Indonesia
- Indian Energy Exchange, India
- Aboitiz Power Corporation - Philippines
- Port Waratah Coal Services - Australia
- Bharathi Cement Corporation - India
- Rio Tinto Coal - Australia
- Billiton Holdings Pty Ltd - Australia
- GVK Power & Infra Limited - India
- Savvy Resources Ltd - HongKong
- Vijayanagar Sugar Pvt Ltd - India
- AsiaOL BioFuels Corp., Philippines
- PowerSource Philippines DevCo
- Maharashtra Electricity Regulatory Commission - India
- Metalloyd Limited - United Kingdom
- Karaikal Port Pvt Ltd - India
- Alfred C Toepfer International GmbH - Germany
- Central Java Power - Indonesia
- Videocon Industries ltd - India
- New Zealand Coal & Carbon
- Karbindo Abesyapradhi - Indoneisa
- Standard Chartered Bank - UAE
- Star Paper Mills Limited - India
- Kepco SPC Power Corporation, Philippines
- Sree Jayajothi Cements Limited - India
- PNOC Exploration Corporation - Philippines
- Maheswari Brothers Coal Limited - India
- GAC Shipping (India) Pvt Ltd
- Medco Energi Mining Internasional
- The University of Queensland
- Timah Investasi Mineral - Indoneisa
- Georgia Ports Authority, United States
- CNBM International Corporation - China
- India Bulls Power Limited - India
- Jorong Barutama Greston.PT - Indonesia
- Thiess Contractors Indonesia
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Chettinad Cement Corporation Ltd - India
- European Bulk Services B.V. - Netherlands
- Bhoruka Overseas - Indonesia
- Global Green Power PLC Corporation, Philippines
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- ICICI Bank Limited - India
- SN Aboitiz Power Inc, Philippines
- Electricity Generating Authority of Thailand
- Price Waterhouse Coopers - Russia
- Grasim Industreis Ltd - India
- Bukit Makmur.PT - Indonesia
- International Coal Ventures Pvt Ltd - India
- GN Power Mariveles Coal Plant, Philippines
- Thai Mozambique Logistica
- Petron Corporation, Philippines
- White Energy Company Limited
- London Commodity Brokers - England
- Sarangani Energy Corporation, Philippines
- Anglo American - United Kingdom
- McConnell Dowell - Australia
- Neyveli Lignite Corporation Ltd, - India
- Sinarmas Energy and Mining - Indonesia
- Orica Mining Services - Indonesia
- Intertek Mineral Services - Indonesia
- VISA Power Limited - India
- Interocean Group of Companies - India
- Mercuria Energy - Indonesia
- Bangladesh Power Developement Board
- Kobexindo Tractors - Indoneisa
- Ministry of Transport, Egypt
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Carbofer General Trading SA - India
- Bahari Cakrawala Sebuku - Indonesia
- Edison Trading Spa - Italy
- MS Steel International - UAE
- Gujarat Mineral Development Corp Ltd - India
- Coalindo Energy - Indonesia
- Malabar Cements Ltd - India
- Attock Cement Pakistan Limited
- Singapore Mercantile Exchange
- Tamil Nadu electricity Board
- Romanian Commodities Exchange
- SMC Global Power, Philippines
- Gujarat Electricity Regulatory Commission - India
- Banpu Public Company Limited - Thailand
- Siam City Cement PLC, Thailand
- Mjunction Services Limited - India
- Parliament of New Zealand
- Energy Development Corp, Philippines
- CIMB Investment Bank - Malaysia
- Larsen & Toubro Limited - India
- Agrawal Coal Company - India
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