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