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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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Sunday, 03 July 22
CHINESE VICE PREMIER STRESSES CLEAN, EFFICIENT USE OF COAL - XINHUA
Chinese Vice Premier Han Zheng has stressed efforts to promote the clean and efficient use of coal, and pursue green, low-carbon and high-quality d ...
Sunday, 03 July 22
SOVEREIGN SECTOR OUTLOOK REVISED TO NEUTRAL ON UKRAINE WAR IMPACT - FITCH RATINGS
The deterioration in global sovereign credit conditions this year relative to our expectations at end-2021 has caused Fitch Ratings to change its g ...
Saturday, 02 July 22
GLOBAL SEABORNE COAL EXPORTS IN 2021 INCREASED BY 4.4% Y-O-Y TO 1147 MLN TONNES - BANCHERO COSTA
In the full 12 months of 2021, global seaborne coal exports increased by +4.4% y-o-y to 1147 mln tonnes, from 1099 mln tonnes in 2020, according to ...
Friday, 01 July 22
INDIA'S TOP CEMENT MAKER PAYING FOR RUSSIAN COAL IN CHINESE YUAN - REUTERS
India’s biggest cement producer, UltraTech Cement ULTC.NS, is importing a cargo of Russian coal and paying using Chinese yuan, according to a ...
Thursday, 30 June 22
FINANCIAL GAINS SUPPORT COAL TRANSITION - BALTIC EXCHANGE
Support for the shift away from coal dependency continues to mount, with the International Monetary Fund (IMF) calculating that the move would gene ...
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- Eastern Energy - Thailand
- Orica Australia Pty. Ltd.
- Samtan Co., Ltd - South Korea
- Intertek Mineral Services - Indonesia
- SN Aboitiz Power Inc, Philippines
- Power Finance Corporation Ltd., India
- Bulk Trading Sa - Switzerland
- Coal and Oil Company - UAE
- Essar Steel Hazira Ltd - India
- Tamil Nadu electricity Board
- South Luzon Thermal Energy Corporation
- Antam Resourcindo - Indonesia
- Bayan Resources Tbk. - Indonesia
- Indonesian Coal Mining Association
- OPG Power Generation Pvt Ltd - India
- Price Waterhouse Coopers - Russia
- Indogreen Group - Indonesia
- Petrochimia International Co. Ltd.- Taiwan
- Tata Chemicals Ltd - India
- Manunggal Multi Energi - Indonesia
- Toyota Tsusho Corporation, Japan
- Mintek Dendrill Indonesia
- Uttam Galva Steels Limited - India
- Kobexindo Tractors - Indoneisa
- Miang Besar Coal Terminal - Indonesia
- Indika Energy - Indonesia
- Kaltim Prima Coal - Indonesia
- Semirara Mining Corp, Philippines
- The University of Queensland
- Bahari Cakrawala Sebuku - Indonesia
- GAC Shipping (India) Pvt Ltd
- Vijayanagar Sugar Pvt Ltd - India
- GMR Energy Limited - India
- Jaiprakash Power Ventures ltd
- CNBM International Corporation - China
- Cigading International Bulk Terminal - Indonesia
- Borneo Indobara - Indonesia
- Billiton Holdings Pty Ltd - Australia
- Barasentosa Lestari - Indonesia
- Ministry of Mines - Canada
- TNB Fuel Sdn Bhd - Malaysia
- Posco Energy - South Korea
- SMG Consultants - Indonesia
- Aboitiz Power Corporation - Philippines
- Dalmia Cement Bharat India
- Bukit Asam (Persero) Tbk - Indonesia
- Bank of Tokyo Mitsubishi UFJ Ltd
- Timah Investasi Mineral - Indoneisa
- Goldman Sachs - Singapore
- Grasim Industreis Ltd - India
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Parry Sugars Refinery, India
- Baramulti Group, Indonesia
- Bhatia International Limited - India
- Sinarmas Energy and Mining - Indonesia
- Offshore Bulk Terminal Pte Ltd, Singapore
- Electricity Authority, New Zealand
- Global Coal Blending Company Limited - Australia
- Therma Luzon, Inc, Philippines
- Bangladesh Power Developement Board
- Australian Coal Association
- Globalindo Alam Lestari - Indonesia
- Altura Mining Limited, Indonesia
- Bhoruka Overseas - Indonesia
- ICICI Bank Limited - India
- Petron Corporation, Philippines
- MS Steel International - UAE
- McConnell Dowell - Australia
- Lanco Infratech Ltd - India
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- PowerSource Philippines DevCo
- Edison Trading Spa - Italy
- Indian Energy Exchange, India
- Kalimantan Lumbung Energi - Indonesia
- Kartika Selabumi Mining - Indonesia
- CIMB Investment Bank - Malaysia
- Directorate Of Revenue Intelligence - India
- Sakthi Sugars Limited - India
- Anglo American - United Kingdom
- Economic Council, Georgia
- Larsen & Toubro Limited - India
- Cement Manufacturers Association - India
- VISA Power Limited - India
- Deloitte Consulting - India
- International Coal Ventures Pvt Ltd - India
- Jorong Barutama Greston.PT - Indonesia
- TeaM Sual Corporation - Philippines
- Metalloyd Limited - United Kingdom
- Ceylon Electricity Board - Sri Lanka
- San Jose City I Power Corp, Philippines
- Meralco Power Generation, Philippines
- Ministry of Transport, Egypt
- Malabar Cements Ltd - India
- Kideco Jaya Agung - Indonesia
- European Bulk Services B.V. - Netherlands
- Gujarat Mineral Development Corp Ltd - India
- Renaissance Capital - South Africa
- Heidelberg Cement - Germany
- GN Power Mariveles Coal Plant, Philippines
- Krishnapatnam Port Company Ltd. - India
- Interocean Group of Companies - India
- Ind-Barath Power Infra Limited - India
- IHS Mccloskey Coal Group - USA
- IEA Clean Coal Centre - UK
- White Energy Company Limited
- ASAPP Information Group - India
- Planning Commission, India
- Pendopo Energi Batubara - Indonesia
- Oldendorff Carriers - Singapore
- Chettinad Cement Corporation Ltd - India
- Leighton Contractors Pty Ltd - Australia
- The Treasury - Australian Government
- Agrawal Coal Company - India
- Rashtriya Ispat Nigam Limited - India
- Rio Tinto Coal - Australia
- Indian Oil Corporation Limited
- Global Green Power PLC Corporation, Philippines
- Sical Logistics Limited - India
- Gujarat Sidhee Cement - India
- Global Business Power Corporation, Philippines
- Bukit Baiduri Energy - Indonesia
- Formosa Plastics Group - Taiwan
- Ambuja Cements Ltd - India
- Neyveli Lignite Corporation Ltd, - India
- Kohat Cement Company Ltd. - Pakistan
- Salva Resources Pvt Ltd - India
- Latin American Coal - Colombia
- Riau Bara Harum - Indonesia
- Star Paper Mills Limited - India
- Eastern Coal Council - USA
- Vedanta Resources Plc - India
- Port Waratah Coal Services - Australia
- Coastal Gujarat Power Limited - India
- New Zealand Coal & Carbon
- Siam City Cement - Thailand
- Holcim Trading Pte Ltd - Singapore
- Energy Link Ltd, New Zealand
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Minerals Council of Australia
- PTC India Limited - India
- Sindya Power Generating Company Private Ltd
- Videocon Industries ltd - India
- PNOC Exploration Corporation - Philippines
- Pipit Mutiara Jaya. PT, Indonesia
- London Commodity Brokers - England
- Orica Mining Services - Indonesia
- Africa Commodities Group - South Africa
- Sojitz Corporation - Japan
- Commonwealth Bank - Australia
- Carbofer General Trading SA - India
- Semirara Mining and Power Corporation, Philippines
- SMC Global Power, Philippines
- Thai Mozambique Logistica
- Kapuas Tunggal Persada - Indonesia
- AsiaOL BioFuels Corp., Philippines
- Mercator Lines Limited - India
- Madhucon Powers Ltd - India
- Standard Chartered Bank - UAE
- Indo Tambangraya Megah - Indonesia
- Binh Thuan Hamico - Vietnam
- Independent Power Producers Association of India
- Straits Asia Resources Limited - Singapore
- Kumho Petrochemical, South Korea
- Georgia Ports Authority, United States
- Coalindo Energy - Indonesia
- Asmin Koalindo Tuhup - Indonesia
- Simpson Spence & Young - Indonesia
- Maharashtra Electricity Regulatory Commission - India
- Ministry of Finance - Indonesia
- Sree Jayajothi Cements Limited - India
- Bhushan Steel Limited - India
- Sarangani Energy Corporation, Philippines
- Wilmar Investment Holdings
- Energy Development Corp, Philippines
- Mercuria Energy - Indonesia
- Electricity Generating Authority of Thailand
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Xindia Steels Limited - India
- Savvy Resources Ltd - HongKong
- Wood Mackenzie - Singapore
- The State Trading Corporation of India Ltd
- Attock Cement Pakistan Limited
- PetroVietnam Power Coal Import and Supply Company
- Jindal Steel & Power Ltd - India
- Maheswari Brothers Coal Limited - India
- Karbindo Abesyapradhi - Indoneisa
- Bukit Makmur.PT - Indonesia
- Iligan Light & Power Inc, Philippines
- Medco Energi Mining Internasional
- Meenaskhi Energy Private Limited - India
- India Bulls Power Limited - India
- Trasteel International SA, Italy
- Alfred C Toepfer International GmbH - Germany
- Romanian Commodities Exchange
- Siam City Cement PLC, Thailand
- GVK Power & Infra Limited - India
- Merrill Lynch Commodities Europe
- Directorate General of MIneral and Coal - Indonesia
- Aditya Birla Group - India
- Banpu Public Company Limited - Thailand
- LBH Netherlands Bv - Netherlands
- Australian Commodity Traders Exchange
- Parliament of New Zealand
- Singapore Mercantile Exchange
- Thiess Contractors Indonesia
- Bharathi Cement Corporation - India
- Central Electricity Authority - India
- Central Java Power - Indonesia
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Vizag Seaport Private Limited - India
- Karaikal Port Pvt Ltd - India
- Mjunction Services Limited - India
- Marubeni Corporation - India
- Makarim & Taira - Indonesia
- Gujarat Electricity Regulatory Commission - India
- Chamber of Mines of South Africa
- Kepco SPC Power Corporation, Philippines
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