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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 $500/t range. While HSFO markets in Asia have been weakening on the back of sanctions on Urals crude in Europe and the US, VLSFO markets are seeing a tight supply as refineries have been utilizing sweeter crude to maximize gasoline production to meet the demand for the peak driving season in the US and due to the expanded regional turnaround and strong gasoline cracks.
At the moment, retrofitting times vary between 30 and 50 days, which is important to consider under the current market conditions. According to our data, retrofits now take place at a slower pace, while during 1H of 2022 only 3.7% of newbuilt vessels are scrubber fitted, compared to 13.9% during 1H of 2021. Since investments in technology are capital intensive, owners tend to keep a more conservative stance and ensure a balance in their fleets, until clarity is given on what will be the most cost-efficient and dominant compliant method.
By Chara Georgousi,
Research Analyst
Compiled by:
Intermodal Research & Valuations
Analysts:
Yiannis Parganas
Tamara Apostolou
Disclaimer and legal disclosure: For any further queries please do not hesitate to contact our Research & Valuations Department. The information contained in this report has been obtained from various sources, as reported in the market. Intermodal Shipbrokers Co. believes such information to be factual and reliable without making guarantees regarding its accuracy or completeness. Whilst every care has been taken in the production of the above review, no liability can be accepted for any loss or damage incurred in any way whatsoever by any person who may seek to rely on the information and views contained in this material. This report is being produced for the internal use of the intended recipients only and no reproducing is allowed, without the prior written authorization of Intermodal Shipbrokers Co.
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Friday, 08 July 22
AUSTRALIAN COAL PRICE BREAKS AGAIN LEVEL US$ 400/TON!, UP AROUND 4% - CNBC INDONESIA
Coal prices shot up again and crossed the level of US$ 400 per ton. On Thursday (7/7/2022) trading, the selling price of August contract closed at ...
Friday, 08 July 22
INDONESIA MULLS MORE FREQUENT SETTING OF CRUDE PALM OIL REFERENCE PRICE - REUTERS
Indonesia is considering setting its crude palm oil (CPO) export reference price every two weeks instead of monthly, a senior trade ministry offici ...
Friday, 08 July 22
BUNKER PRICES EXPECTED TO RECOVER LOST GROUND NEXT WEEK - SERGEY IVANOV, MABUX
Over the Week 27, the world bunker indices showed a sharp decline, primarily due to the fall in oil prices on July 05. The 380 HSFO index fell by 5 ...
Thursday, 07 July 22
NTPC MINES 61% MORE COAL AT 4.22 MN METRIC TONNES IN APRIL-JUNE: PTI
State-owned power giant NTPC on Tuesday said that its coal output grew by 61 per cent to Rs 42.40 lakh metric tonnes in April-June quarter from 26. ...
Thursday, 07 July 22
COAL INDIA'S PRODUCTION SETS RECORD INCREASE OF 29% YOY AT 36 MT IN Q1FY23 - IIFL SECURITIES
Coal India Limited (CIL) has ended April-June quarter FY’23 capping a historic high of 29% yoy output growth, compared to same quarter FY&rsq ...
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- Attock Cement Pakistan Limited
- Cigading International Bulk Terminal - Indonesia
- Siam City Cement PLC, Thailand
- Aboitiz Power Corporation - Philippines
- India Bulls Power Limited - India
- Kalimantan Lumbung Energi - Indonesia
- Bhatia International Limited - India
- PowerSource Philippines DevCo
- Grasim Industreis Ltd - India
- Interocean Group of Companies - India
- Gujarat Mineral Development Corp Ltd - India
- The State Trading Corporation of India Ltd
- Karaikal Port Pvt Ltd - India
- Goldman Sachs - Singapore
- Coalindo Energy - Indonesia
- Antam Resourcindo - Indonesia
- Asmin Koalindo Tuhup - Indonesia
- Vedanta Resources Plc - India
- Sical Logistics Limited - India
- Ministry of Transport, Egypt
- Wilmar Investment Holdings
- Petrochimia International Co. Ltd.- Taiwan
- Holcim Trading Pte Ltd - Singapore
- London Commodity Brokers - England
- Bukit Makmur.PT - Indonesia
- Semirara Mining and Power Corporation, Philippines
- MS Steel International - UAE
- Gujarat Sidhee Cement - India
- Bank of Tokyo Mitsubishi UFJ Ltd
- Mercuria Energy - Indonesia
- ASAPP Information Group - India
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Straits Asia Resources Limited - Singapore
- Kaltim Prima Coal - Indonesia
- Essar Steel Hazira Ltd - India
- Central Electricity Authority - India
- Coastal Gujarat Power Limited - India
- Larsen & Toubro Limited - India
- Simpson Spence & Young - Indonesia
- Sarangani Energy Corporation, Philippines
- Kepco SPC Power Corporation, Philippines
- Jorong Barutama Greston.PT - Indonesia
- Barasentosa Lestari - Indonesia
- Kohat Cement Company Ltd. - Pakistan
- Aditya Birla Group - India
- Deloitte Consulting - India
- Parliament of New Zealand
- Binh Thuan Hamico - Vietnam
- Coal and Oil Company - UAE
- Latin American Coal - Colombia
- GVK Power & Infra Limited - India
- Altura Mining Limited, Indonesia
- Malabar Cements Ltd - India
- Star Paper Mills Limited - India
- Indian Oil Corporation Limited
- ICICI Bank Limited - India
- Vijayanagar Sugar Pvt Ltd - India
- International Coal Ventures Pvt Ltd - India
- Bukit Baiduri Energy - Indonesia
- Agrawal Coal Company - India
- Indian Energy Exchange, India
- Eastern Coal Council - USA
- Australian Coal Association
- Toyota Tsusho Corporation, Japan
- OPG Power Generation Pvt Ltd - India
- Carbofer General Trading SA - India
- CNBM International Corporation - China
- Independent Power Producers Association of India
- South Luzon Thermal Energy Corporation
- Kobexindo Tractors - Indoneisa
- Bharathi Cement Corporation - India
- SN Aboitiz Power Inc, Philippines
- Maharashtra Electricity Regulatory Commission - India
- Sree Jayajothi Cements Limited - India
- Ambuja Cements Ltd - India
- Miang Besar Coal Terminal - Indonesia
- Maheswari Brothers Coal Limited - India
- Heidelberg Cement - Germany
- Merrill Lynch Commodities Europe
- Directorate General of MIneral and Coal - Indonesia
- Billiton Holdings Pty Ltd - Australia
- Bhoruka Overseas - Indonesia
- Thiess Contractors Indonesia
- Therma Luzon, Inc, Philippines
- Leighton Contractors Pty Ltd - Australia
- Iligan Light & Power Inc, Philippines
- Krishnapatnam Port Company Ltd. - India
- Offshore Bulk Terminal Pte Ltd, Singapore
- Indika Energy - Indonesia
- Lanco Infratech Ltd - India
- Neyveli Lignite Corporation Ltd, - India
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Siam City Cement - Thailand
- Bulk Trading Sa - Switzerland
- Tata Chemicals Ltd - India
- AsiaOL BioFuels Corp., Philippines
- Riau Bara Harum - Indonesia
- Indo Tambangraya Megah - Indonesia
- Semirara Mining Corp, Philippines
- New Zealand Coal & Carbon
- Borneo Indobara - Indonesia
- Trasteel International SA, Italy
- Renaissance Capital - South Africa
- Chamber of Mines of South Africa
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Ceylon Electricity Board - Sri Lanka
- Kumho Petrochemical, South Korea
- Formosa Plastics Group - Taiwan
- White Energy Company Limited
- Uttam Galva Steels Limited - India
- Energy Link Ltd, New Zealand
- Chettinad Cement Corporation Ltd - India
- Orica Australia Pty. Ltd.
- SMG Consultants - Indonesia
- Salva Resources Pvt Ltd - India
- Power Finance Corporation Ltd., India
- Minerals Council of Australia
- Indogreen Group - Indonesia
- Kapuas Tunggal Persada - Indonesia
- Medco Energi Mining Internasional
- Pipit Mutiara Jaya. PT, Indonesia
- Sinarmas Energy and Mining - Indonesia
- Port Waratah Coal Services - Australia
- Thai Mozambique Logistica
- Energy Development Corp, Philippines
- Madhucon Powers Ltd - India
- Cement Manufacturers Association - India
- VISA Power Limited - India
- Posco Energy - South Korea
- Timah Investasi Mineral - Indoneisa
- LBH Netherlands Bv - Netherlands
- PNOC Exploration Corporation - Philippines
- Ind-Barath Power Infra Limited - India
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Metalloyd Limited - United Kingdom
- European Bulk Services B.V. - Netherlands
- Petron Corporation, Philippines
- Bhushan Steel Limited - India
- Romanian Commodities Exchange
- Bukit Asam (Persero) Tbk - Indonesia
- Kideco Jaya Agung - Indonesia
- Oldendorff Carriers - Singapore
- Orica Mining Services - Indonesia
- Makarim & Taira - Indonesia
- GMR Energy Limited - India
- The University of Queensland
- Rashtriya Ispat Nigam Limited - India
- Meenaskhi Energy Private Limited - India
- Sindya Power Generating Company Private Ltd
- Banpu Public Company Limited - Thailand
- Intertek Mineral Services - Indonesia
- GN Power Mariveles Coal Plant, Philippines
- PTC India Limited - India
- TNB Fuel Sdn Bhd - Malaysia
- Bahari Cakrawala Sebuku - Indonesia
- Mercator Lines Limited - India
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Kartika Selabumi Mining - Indonesia
- Georgia Ports Authority, United States
- Rio Tinto Coal - Australia
- Samtan Co., Ltd - South Korea
- Singapore Mercantile Exchange
- CIMB Investment Bank - Malaysia
- San Jose City I Power Corp, Philippines
- IEA Clean Coal Centre - UK
- PetroVietnam Power Coal Import and Supply Company
- Global Green Power PLC Corporation, Philippines
- Karbindo Abesyapradhi - Indoneisa
- Meralco Power Generation, Philippines
- Directorate Of Revenue Intelligence - India
- Ministry of Finance - Indonesia
- Dalmia Cement Bharat India
- Savvy Resources Ltd - HongKong
- Xindia Steels Limited - India
- Sakthi Sugars Limited - India
- Global Coal Blending Company Limited - Australia
- Parry Sugars Refinery, India
- Jaiprakash Power Ventures ltd
- Marubeni Corporation - India
- Price Waterhouse Coopers - Russia
- Commonwealth Bank - Australia
- Vizag Seaport Private Limited - India
- Alfred C Toepfer International GmbH - Germany
- Anglo American - United Kingdom
- Central Java Power - Indonesia
- Bayan Resources Tbk. - Indonesia
- Sojitz Corporation - Japan
- Gujarat Electricity Regulatory Commission - India
- Ministry of Mines - Canada
- Tamil Nadu electricity Board
- Planning Commission, India
- The Treasury - Australian Government
- IHS Mccloskey Coal Group - USA
- Bangladesh Power Developement Board
- Electricity Authority, New Zealand
- Pendopo Energi Batubara - Indonesia
- Indonesian Coal Mining Association
- Globalindo Alam Lestari - Indonesia
- Mintek Dendrill Indonesia
- Manunggal Multi Energi - Indonesia
- Videocon Industries ltd - India
- Eastern Energy - Thailand
- SMC Global Power, Philippines
- Africa Commodities Group - South Africa
- TeaM Sual Corporation - Philippines
- Global Business Power Corporation, Philippines
- Australian Commodity Traders Exchange
- Standard Chartered Bank - UAE
- Economic Council, Georgia
- Edison Trading Spa - Italy
- Electricity Generating Authority of Thailand
- Baramulti Group, Indonesia
- GAC Shipping (India) Pvt Ltd
- Mjunction Services Limited - India
- McConnell Dowell - Australia
- Wood Mackenzie - Singapore
- Jindal Steel & Power Ltd - India
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