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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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Tuesday, 26 April 22
INDIA'S COAL IMPORTS ARE SHIFTING, THERMAL MORE THAN COKING - REUTERS
India’s coal imports are starting to reflect shifting world trade and pricing dynamics in the wake of Russia’s invasion of neighbouring ...
Monday, 18 April 22
GERMAN COAL IMPORTERS EXPECT A BRIEF SPIKE IN PRICES ON EU BAN - REUTERS
A European Union embargo on Russian coal imports will push up prices in the short term before alternative supplies become available to steady the c ...
Monday, 18 April 22
FINNISH 'LOOPHOLES' ALLOW IMPORTS OF RUSSIAN COAL AND OIL TO CONTINUE - EURONEWS
Activists in Finland are calling for the government to clamp down faster on state-owned companies that continue to import raw materials from Russia ...
Monday, 18 April 22
GOVT IN DISCUSSION WITH WORLD BANK ON FRAMEWORK FOR COAL MINE CLOSURE - BUSINESS STANDARD
The coal ministry is in discussions with the World Bank for collaboration on the mine closure framework, a government official said on Wednesday.
...
Monday, 18 April 22
DEMAND FOR THERMAL COAL TO RISE DUE TO INCREASE IN ELECTRICITY DEMAND: INDIAN COAL MINISTRY - PTI
Coal block allocatees have a golden opportunity to augment production as the demand for thermal coal will rise due to an increase in electricity de ...
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- Ambuja Cements Ltd - India
- Mercuria Energy - Indonesia
- Bharathi Cement Corporation - India
- CNBM International Corporation - China
- Banpu Public Company Limited - Thailand
- Antam Resourcindo - Indonesia
- Offshore Bulk Terminal Pte Ltd, Singapore
- Indogreen Group - Indonesia
- Bulk Trading Sa - Switzerland
- Sakthi Sugars Limited - India
- IEA Clean Coal Centre - UK
- San Jose City I Power Corp, Philippines
- PTC India Limited - India
- Tamil Nadu electricity Board
- The University of Queensland
- Parry Sugars Refinery, India
- GN Power Mariveles Coal Plant, Philippines
- Attock Cement Pakistan Limited
- Malabar Cements Ltd - India
- Sree Jayajothi Cements Limited - India
- Orica Australia Pty. Ltd.
- Bukit Asam (Persero) Tbk - Indonesia
- Anglo American - United Kingdom
- Mercator Lines Limited - India
- Samtan Co., Ltd - South Korea
- GMR Energy Limited - India
- Power Finance Corporation Ltd., India
- Sarangani Energy Corporation, Philippines
- Sical Logistics Limited - India
- Indian Energy Exchange, India
- European Bulk Services B.V. - Netherlands
- Larsen & Toubro Limited - India
- Toyota Tsusho Corporation, Japan
- SN Aboitiz Power Inc, Philippines
- Cigading International Bulk Terminal - Indonesia
- TNB Fuel Sdn Bhd - Malaysia
- SMC Global Power, Philippines
- Altura Mining Limited, Indonesia
- Georgia Ports Authority, United States
- Carbofer General Trading SA - India
- Jorong Barutama Greston.PT - Indonesia
- Tata Chemicals Ltd - India
- Grasim Industreis Ltd - India
- Sinarmas Energy and Mining - Indonesia
- Bhatia International Limited - India
- Alfred C Toepfer International GmbH - Germany
- Kapuas Tunggal Persada - Indonesia
- Meralco Power Generation, Philippines
- Jindal Steel & Power Ltd - India
- Jaiprakash Power Ventures ltd
- Asmin Koalindo Tuhup - Indonesia
- Bahari Cakrawala Sebuku - Indonesia
- Kaltim Prima Coal - Indonesia
- Maharashtra Electricity Regulatory Commission - India
- Commonwealth Bank - Australia
- New Zealand Coal & Carbon
- International Coal Ventures Pvt Ltd - India
- White Energy Company Limited
- Ind-Barath Power Infra Limited - India
- Kobexindo Tractors - Indoneisa
- Cement Manufacturers Association - India
- Chamber of Mines of South Africa
- Directorate General of MIneral and Coal - Indonesia
- Bayan Resources Tbk. - Indonesia
- Aboitiz Power Corporation - Philippines
- Karaikal Port Pvt Ltd - India
- Chettinad Cement Corporation Ltd - India
- Indonesian Coal Mining Association
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Makarim & Taira - Indonesia
- Krishnapatnam Port Company Ltd. - India
- Australian Coal Association
- Intertek Mineral Services - Indonesia
- Gujarat Electricity Regulatory Commission - India
- Interocean Group of Companies - India
- Coalindo Energy - Indonesia
- Star Paper Mills Limited - India
- VISA Power Limited - India
- Wood Mackenzie - Singapore
- Standard Chartered Bank - UAE
- Thai Mozambique Logistica
- GVK Power & Infra Limited - India
- Neyveli Lignite Corporation Ltd, - India
- Mjunction Services Limited - India
- Bank of Tokyo Mitsubishi UFJ Ltd
- PetroVietnam Power Coal Import and Supply Company
- Xindia Steels Limited - India
- Marubeni Corporation - India
- Mintek Dendrill Indonesia
- TeaM Sual Corporation - Philippines
- Vijayanagar Sugar Pvt Ltd - India
- Pipit Mutiara Jaya. PT, Indonesia
- Wilmar Investment Holdings
- Gujarat Sidhee Cement - India
- Eastern Energy - Thailand
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Global Green Power PLC Corporation, Philippines
- Port Waratah Coal Services - Australia
- PNOC Exploration Corporation - Philippines
- Uttam Galva Steels Limited - India
- Binh Thuan Hamico - Vietnam
- Ministry of Mines - Canada
- Pendopo Energi Batubara - Indonesia
- MS Steel International - UAE
- Independent Power Producers Association of India
- Iligan Light & Power Inc, Philippines
- Sojitz Corporation - Japan
- Barasentosa Lestari - Indonesia
- Billiton Holdings Pty Ltd - Australia
- Coastal Gujarat Power Limited - India
- The Treasury - Australian Government
- Leighton Contractors Pty Ltd - Australia
- GAC Shipping (India) Pvt Ltd
- Medco Energi Mining Internasional
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Energy Development Corp, Philippines
- ICICI Bank Limited - India
- Orica Mining Services - Indonesia
- Trasteel International SA, Italy
- Miang Besar Coal Terminal - Indonesia
- IHS Mccloskey Coal Group - USA
- Singapore Mercantile Exchange
- London Commodity Brokers - England
- India Bulls Power Limited - India
- Kumho Petrochemical, South Korea
- Meenaskhi Energy Private Limited - India
- Rio Tinto Coal - Australia
- The State Trading Corporation of India Ltd
- Vedanta Resources Plc - India
- Ministry of Transport, Egypt
- Manunggal Multi Energi - Indonesia
- ASAPP Information Group - India
- Gujarat Mineral Development Corp Ltd - India
- OPG Power Generation Pvt Ltd - India
- Bangladesh Power Developement Board
- Posco Energy - South Korea
- Romanian Commodities Exchange
- Simpson Spence & Young - Indonesia
- Videocon Industries ltd - India
- McConnell Dowell - Australia
- Minerals Council of Australia
- PowerSource Philippines DevCo
- Oldendorff Carriers - Singapore
- Straits Asia Resources Limited - Singapore
- Petron Corporation, Philippines
- Electricity Authority, New Zealand
- Directorate Of Revenue Intelligence - India
- Essar Steel Hazira Ltd - India
- SMG Consultants - Indonesia
- Bukit Baiduri Energy - Indonesia
- Latin American Coal - Colombia
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Siam City Cement - Thailand
- Baramulti Group, Indonesia
- Australian Commodity Traders Exchange
- Kepco SPC Power Corporation, Philippines
- Indo Tambangraya Megah - Indonesia
- Planning Commission, India
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Merrill Lynch Commodities Europe
- AsiaOL BioFuels Corp., Philippines
- Thiess Contractors Indonesia
- Semirara Mining Corp, Philippines
- Energy Link Ltd, New Zealand
- Global Business Power Corporation, Philippines
- Electricity Generating Authority of Thailand
- Bukit Makmur.PT - Indonesia
- Rashtriya Ispat Nigam Limited - India
- Semirara Mining and Power Corporation, Philippines
- Eastern Coal Council - USA
- Indika Energy - Indonesia
- Aditya Birla Group - India
- Salva Resources Pvt Ltd - India
- Goldman Sachs - Singapore
- Ceylon Electricity Board - Sri Lanka
- Kideco Jaya Agung - Indonesia
- Holcim Trading Pte Ltd - Singapore
- Dalmia Cement Bharat India
- Petrochimia International Co. Ltd.- Taiwan
- Globalindo Alam Lestari - Indonesia
- Parliament of New Zealand
- Therma Luzon, Inc, Philippines
- Kohat Cement Company Ltd. - Pakistan
- Madhucon Powers Ltd - India
- Vizag Seaport Private Limited - India
- Bhushan Steel Limited - India
- Kartika Selabumi Mining - Indonesia
- Sindya Power Generating Company Private Ltd
- Africa Commodities Group - South Africa
- CIMB Investment Bank - Malaysia
- Maheswari Brothers Coal Limited - India
- Global Coal Blending Company Limited - Australia
- Timah Investasi Mineral - Indoneisa
- Edison Trading Spa - Italy
- Borneo Indobara - Indonesia
- Indian Oil Corporation Limited
- Price Waterhouse Coopers - Russia
- Central Electricity Authority - India
- Bhoruka Overseas - Indonesia
- Ministry of Finance - Indonesia
- Riau Bara Harum - Indonesia
- Heidelberg Cement - Germany
- Lanco Infratech Ltd - India
- Central Java Power - Indonesia
- Agrawal Coal Company - India
- South Luzon Thermal Energy Corporation
- Deloitte Consulting - India
- Karbindo Abesyapradhi - Indoneisa
- Renaissance Capital - South Africa
- Metalloyd Limited - United Kingdom
- Kalimantan Lumbung Energi - Indonesia
- Savvy Resources Ltd - HongKong
- LBH Netherlands Bv - Netherlands
- Formosa Plastics Group - Taiwan
- Coal and Oil Company - UAE
- Economic Council, Georgia
- Siam City Cement PLC, Thailand
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