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