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