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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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Wednesday, 06 July 22
MARKET INSIGHT - INTERMODAL
Following the 3rd Decarbonizing Shipping Forum, held in Hamburg on June 2022, there has been a meaningful resurgence of discussions within the ship ...
Tuesday, 05 July 22
WHY ARE VLSFO PRICES SO HIGH, ESPECIALLY IN SINGAPORE? - STEVE CHRISTY, INTEGR8 FUELS
Tightness in products still trumps talks of recession
Last month we wrote about the fears of recession versus the tightness in product markets ...
Tuesday, 05 July 22
ADANI ENTERPRISES LOWEST BIDDER IN COAL INDIA'S IMPORT TENDER: REPORT - BUSINESS STANDARD
Coal India Ltd floated its first import tender on behalf of power companies, where Adani Enterprises Ltd came out to be the lowest bidder, a report ...
Tuesday, 05 July 22
CHINA POLICY KEY FOR IRON ORE OUTLOOK - ING
China’s covid lockdowns and recessionary risks hit iron ore
Iron ore prices have fallen significantly from their year-to-date high of US$ ...
Monday, 04 July 22
INDONESIAN COAL PRICE REFERENCE SLIGHTLY DOWN IN JULY
COALspot.com: Indonesian Coal Price Reference for July delivery drops 1.52 per cent month on month.
The Indonesian Coal Price Refere ...
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- Anglo American - United Kingdom
- Essar Steel Hazira Ltd - India
- McConnell Dowell - Australia
- Therma Luzon, Inc, Philippines
- Sakthi Sugars Limited - India
- Jorong Barutama Greston.PT - Indonesia
- Kaltim Prima Coal - Indonesia
- Ministry of Finance - Indonesia
- Orica Australia Pty. Ltd.
- Thiess Contractors Indonesia
- Vedanta Resources Plc - India
- Timah Investasi Mineral - Indoneisa
- Jindal Steel & Power Ltd - India
- Larsen & Toubro Limited - India
- Pipit Mutiara Jaya. PT, Indonesia
- IEA Clean Coal Centre - UK
- Borneo Indobara - Indonesia
- Bayan Resources Tbk. - Indonesia
- Eastern Coal Council - USA
- Leighton Contractors Pty Ltd - Australia
- The Treasury - Australian Government
- Mjunction Services Limited - India
- Dalmia Cement Bharat India
- Manunggal Multi Energi - Indonesia
- Metalloyd Limited - United Kingdom
- South Luzon Thermal Energy Corporation
- Coal and Oil Company - UAE
- The University of Queensland
- Rio Tinto Coal - Australia
- TNB Fuel Sdn Bhd - Malaysia
- Karbindo Abesyapradhi - Indoneisa
- San Jose City I Power Corp, Philippines
- Karaikal Port Pvt Ltd - India
- Latin American Coal - Colombia
- Power Finance Corporation Ltd., India
- Bhushan Steel Limited - India
- PetroVietnam Power Coal Import and Supply Company
- Lanco Infratech Ltd - India
- Kohat Cement Company Ltd. - Pakistan
- MS Steel International - UAE
- Trasteel International SA, Italy
- Economic Council, Georgia
- PowerSource Philippines DevCo
- Samtan Co., Ltd - South Korea
- GAC Shipping (India) Pvt Ltd
- Baramulti Group, Indonesia
- Energy Link Ltd, New Zealand
- Sojitz Corporation - Japan
- Australian Commodity Traders Exchange
- Star Paper Mills Limited - India
- Kartika Selabumi Mining - Indonesia
- SMG Consultants - Indonesia
- Cigading International Bulk Terminal - Indonesia
- Antam Resourcindo - Indonesia
- Banpu Public Company Limited - Thailand
- Mintek Dendrill Indonesia
- PNOC Exploration Corporation - Philippines
- Formosa Plastics Group - Taiwan
- Sindya Power Generating Company Private Ltd
- CIMB Investment Bank - Malaysia
- Billiton Holdings Pty Ltd - Australia
- Interocean Group of Companies - India
- Independent Power Producers Association of India
- Asmin Koalindo Tuhup - Indonesia
- Goldman Sachs - Singapore
- Riau Bara Harum - Indonesia
- International Coal Ventures Pvt Ltd - India
- Kepco SPC Power Corporation, Philippines
- Semirara Mining Corp, Philippines
- Siam City Cement PLC, Thailand
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Bukit Baiduri Energy - Indonesia
- Orica Mining Services - Indonesia
- European Bulk Services B.V. - Netherlands
- Indian Oil Corporation Limited
- Kumho Petrochemical, South Korea
- Africa Commodities Group - South Africa
- Toyota Tsusho Corporation, Japan
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Standard Chartered Bank - UAE
- Aditya Birla Group - India
- Parliament of New Zealand
- Intertek Mineral Services - Indonesia
- Marubeni Corporation - India
- Xindia Steels Limited - India
- Australian Coal Association
- Global Green Power PLC Corporation, Philippines
- Wilmar Investment Holdings
- Minerals Council of Australia
- Global Coal Blending Company Limited - Australia
- Bhatia International Limited - India
- Medco Energi Mining Internasional
- Gujarat Electricity Regulatory Commission - India
- Ambuja Cements Ltd - India
- Deloitte Consulting - India
- Makarim & Taira - Indonesia
- Malabar Cements Ltd - India
- Ministry of Transport, Egypt
- Krishnapatnam Port Company Ltd. - India
- Holcim Trading Pte Ltd - Singapore
- New Zealand Coal & Carbon
- Binh Thuan Hamico - Vietnam
- Kalimantan Lumbung Energi - Indonesia
- Bhoruka Overseas - Indonesia
- Rashtriya Ispat Nigam Limited - India
- Ceylon Electricity Board - Sri Lanka
- Iligan Light & Power Inc, Philippines
- Planning Commission, India
- Alfred C Toepfer International GmbH - Germany
- Kideco Jaya Agung - Indonesia
- Edison Trading Spa - Italy
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Central Electricity Authority - India
- TeaM Sual Corporation - Philippines
- Romanian Commodities Exchange
- Sinarmas Energy and Mining - Indonesia
- OPG Power Generation Pvt Ltd - India
- Pendopo Energi Batubara - Indonesia
- Neyveli Lignite Corporation Ltd, - India
- Bangladesh Power Developement Board
- Eastern Energy - Thailand
- Bukit Makmur.PT - Indonesia
- Sical Logistics Limited - India
- Salva Resources Pvt Ltd - India
- Carbofer General Trading SA - India
- Grasim Industreis Ltd - India
- Maheswari Brothers Coal Limited - India
- Gujarat Sidhee Cement - India
- Barasentosa Lestari - Indonesia
- Electricity Authority, New Zealand
- Bahari Cakrawala Sebuku - Indonesia
- Singapore Mercantile Exchange
- Petron Corporation, Philippines
- Mercator Lines Limited - India
- Electricity Generating Authority of Thailand
- Siam City Cement - Thailand
- Price Waterhouse Coopers - Russia
- Thai Mozambique Logistica
- Ministry of Mines - Canada
- Directorate Of Revenue Intelligence - India
- Tamil Nadu electricity Board
- Sarangani Energy Corporation, Philippines
- Chettinad Cement Corporation Ltd - India
- ASAPP Information Group - India
- CNBM International Corporation - China
- GVK Power & Infra Limited - India
- Jaiprakash Power Ventures ltd
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Wood Mackenzie - Singapore
- Semirara Mining and Power Corporation, Philippines
- Indo Tambangraya Megah - Indonesia
- GMR Energy Limited - India
- Altura Mining Limited, Indonesia
- Port Waratah Coal Services - Australia
- SMC Global Power, Philippines
- SN Aboitiz Power Inc, Philippines
- ICICI Bank Limited - India
- Energy Development Corp, Philippines
- Agrawal Coal Company - India
- Chamber of Mines of South Africa
- Mercuria Energy - Indonesia
- Commonwealth Bank - Australia
- Tata Chemicals Ltd - India
- The State Trading Corporation of India Ltd
- Coastal Gujarat Power Limited - India
- Bank of Tokyo Mitsubishi UFJ Ltd
- Central Java Power - Indonesia
- Heidelberg Cement - Germany
- Indonesian Coal Mining Association
- Meenaskhi Energy Private Limited - India
- Vijayanagar Sugar Pvt Ltd - India
- Kobexindo Tractors - Indoneisa
- Miang Besar Coal Terminal - Indonesia
- Coalindo Energy - Indonesia
- Madhucon Powers Ltd - India
- Merrill Lynch Commodities Europe
- Indian Energy Exchange, India
- Videocon Industries ltd - India
- London Commodity Brokers - England
- Petrochimia International Co. Ltd.- Taiwan
- Uttam Galva Steels Limited - India
- Indogreen Group - Indonesia
- Cement Manufacturers Association - India
- Renaissance Capital - South Africa
- White Energy Company Limited
- Attock Cement Pakistan Limited
- India Bulls Power Limited - India
- Parry Sugars Refinery, India
- Bharathi Cement Corporation - India
- Kapuas Tunggal Persada - Indonesia
- LBH Netherlands Bv - Netherlands
- Gujarat Mineral Development Corp Ltd - India
- Sree Jayajothi Cements Limited - India
- Oldendorff Carriers - Singapore
- VISA Power Limited - India
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Global Business Power Corporation, Philippines
- Maharashtra Electricity Regulatory Commission - India
- Meralco Power Generation, Philippines
- IHS Mccloskey Coal Group - USA
- Ind-Barath Power Infra Limited - India
- Globalindo Alam Lestari - Indonesia
- Bulk Trading Sa - Switzerland
- GN Power Mariveles Coal Plant, Philippines
- Bukit Asam (Persero) Tbk - Indonesia
- Vizag Seaport Private Limited - India
- Aboitiz Power Corporation - Philippines
- Georgia Ports Authority, United States
- PTC India Limited - India
- AsiaOL BioFuels Corp., Philippines
- Directorate General of MIneral and Coal - Indonesia
- Simpson Spence & Young - Indonesia
- Savvy Resources Ltd - HongKong
- Posco Energy - South Korea
- Indika Energy - Indonesia
- Straits Asia Resources Limited - Singapore
- Offshore Bulk Terminal Pte Ltd, Singapore
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