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Wednesday, 20 October 21
MARKET INSIGHT - INTERMODAL
 IMO 2020, Ballast Water Treatment regulations, Green Recycling, GHG emissions, EEXI, CII, ETS, Fit for 55, Carbon price/levy, the Poseidon Principles are just a handful pieces of evidence that the environmental regulations are not only knocking on the door, but are already inside the shipping house and with the intention to stay for good.
Ship operators and managers, charterers, ship financiers must take good consideration of all the above before making any operational and investment decision; including placing an order for a new-building vessel, which has become the most complex decision to make, given all the new regulations and technologies coming up.
In this radically changing environment, ship financiers need to assist the industry to bear the burden of the enormous cost of the new regulations/technologies and in general the setting up of the new greener landscape. So far, and while claiming that they will incentivize international shipping’s decarbonization, the focus in the immediate future is to finance solely modern/ecofriendly vessels, while older vessels’ access to financing which would need it the most for their environmentally upgrade is constrained by leading banks and left to alternative financing. This bifurcation in lending constitutes an obstacle for ships that don’t already have green credentials to take significant investment steps towards the energy transition requirements.
Obviously, banks are afraid of being left with portfolios of assets that in 3-4 years’ time have a minimum value (being non green assets). On top of this, there is the concern that a two-tier assets market might develop when the new regulations kick in. The one tier being this of the greener ships and the second one being the tier with the older, non-eco ones that may be employed at a discount. This places another risk factor for the banks. The risk of their financing projects not being profitable anymore. In this context, older ships seem to be left with the operational choice of reducing engine power and thus lower speeds as a primary measure to be “emissions compliant”. While the choice split on the speed level between the shipowner and the charterer will largely depend on the prevailing freight market structure i.e. voyages or timecharters that older vessels will be opted to be deployed under, the sure thing is that they will all try to take advantage of it and negotiate the fixing rates.
Will this be the case? Will we have another scrubber – non scrubber dilemma going forward? Will the new regulations, emissions mitigation costs via carbon prices / potential fuel levies, limited financing options (or expensive options through alternative financing) and lesser charter rates increase scrapping considerations in 2-3 years time, given that approx. 23% of the combined bulk tankers and containers fleet is above 15 years of age? Does the market have the luxury of losing even a fraction of this via scrapping considering the freight market upcycle across most shipping sectors leads to increased deadweight requirements? Let’s just have a look at what’s happening nowadays due to elevated port congestion, which has tied up a significant share of the dry bulk and containers fleet creating market inefficiencies that have exercised strong upward pressures on freight rates with container rates at record high levels and dry bulk freight rates at the highest in 13 years.
Therefore, a further fleet supply squeeze creates good chances that younger vessels will benefit from a charter premium compared to their older peers. However, this that does not mean that older vessels will become obsolete. This is something that the banks need to realise and start supporting their clients when it comes to ‘’older’’ vessels’ financings. It goes without saying that the whole shipping value chain needs to adjust to the new greener environment regime. The banks need to support this new and highly expensive venture of their clients not just by not financing older vessels, but also providing real, monetary incentives that will have tangible and meaningful effect to their daily operating costs.
By George Laios,
Deputy CEO
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.
The Information contained within the website of COALspot.com is intended for informational purposes only and is not intended as professional counsel and should not be used as such.
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Monday, 25 October 21
A QUESTION OF POSSESSION - THE BALTIC EXCHANGE
Possession and tangibility are closely related concepts long established under English law. Yet a change to these concepts is around the corner. Th ...
Monday, 25 October 21
CHINA VOWS TO SEVERELY PUNISH MARKET VIOLATIONS AMID LOW COAL FUTURES PRICES - GLOBAL TIMES
Domestic coal futures had plunged for three consecutive trading days after the government vowed to crack down on soaring prices, and China’s ...
Monday, 25 October 21
FARMERS MAY JOIN THE COAL COMMODITY MARKET TO REDUCE RISKS - GLOBAL TIMES
A recent trip to by the Global Times to East China’s Shandong Province to get a glimpse of China’s coal supply chain revealed a surpris ...
Monday, 25 October 21
CHINA COAL PRICES MARK WORST WEEK SINCE MAY ON GOVERNMENT INTERVENTION - REUTERS
China’s thermal coal futures plunged on Friday and turned in their worst week in five months, following Beijing’s strongest interventio ...
Friday, 22 October 21
THE BIG PICTURE: ENERGY MARKETS - BREAK WAVE ADVISORS
The shipping markets have been pulled further into wild markets of coal and other energy sources. Given how nebulous this sector is, it’s alw ...
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- Parry Sugars Refinery, India
- Aditya Birla Group - India
- Meenaskhi Energy Private Limited - India
- GAC Shipping (India) Pvt Ltd
- Kapuas Tunggal Persada - Indonesia
- PNOC Exploration Corporation - Philippines
- PTC India Limited - India
- LBH Netherlands Bv - Netherlands
- Riau Bara Harum - Indonesia
- Kumho Petrochemical, South Korea
- Sindya Power Generating Company Private Ltd
- Toyota Tsusho Corporation, Japan
- Kideco Jaya Agung - Indonesia
- The Treasury - Australian Government
- Bhushan Steel Limited - India
- Gujarat Electricity Regulatory Commission - India
- Alfred C Toepfer International GmbH - Germany
- Bayan Resources Tbk. - Indonesia
- Interocean Group of Companies - India
- Global Business Power Corporation, Philippines
- Thai Mozambique Logistica
- Cement Manufacturers Association - India
- Jorong Barutama Greston.PT - Indonesia
- Manunggal Multi Energi - Indonesia
- Sakthi Sugars Limited - India
- Central Java Power - Indonesia
- Kaltim Prima Coal - Indonesia
- Larsen & Toubro Limited - India
- SMC Global Power, Philippines
- Independent Power Producers Association of India
- Ministry of Finance - Indonesia
- Indian Energy Exchange, India
- IEA Clean Coal Centre - UK
- Attock Cement Pakistan Limited
- Agrawal Coal Company - India
- Ministry of Mines - Canada
- London Commodity Brokers - England
- Merrill Lynch Commodities Europe
- Altura Mining Limited, Indonesia
- Baramulti Group, Indonesia
- Global Green Power PLC Corporation, Philippines
- CIMB Investment Bank - Malaysia
- Coastal Gujarat Power Limited - India
- GN Power Mariveles Coal Plant, Philippines
- Orica Mining Services - Indonesia
- Billiton Holdings Pty Ltd - Australia
- Indonesian Coal Mining Association
- The University of Queensland
- VISA Power Limited - India
- Aboitiz Power Corporation - Philippines
- Neyveli Lignite Corporation Ltd, - India
- Star Paper Mills Limited - India
- Latin American Coal - Colombia
- Formosa Plastics Group - Taiwan
- Metalloyd Limited - United Kingdom
- CNBM International Corporation - China
- Bukit Asam (Persero) Tbk - Indonesia
- Posco Energy - South Korea
- Krishnapatnam Port Company Ltd. - India
- GMR Energy Limited - India
- Salva Resources Pvt Ltd - India
- Ambuja Cements Ltd - India
- Chamber of Mines of South Africa
- Therma Luzon, Inc, Philippines
- Wilmar Investment Holdings
- Australian Coal Association
- Savvy Resources Ltd - HongKong
- Kobexindo Tractors - Indoneisa
- Minerals Council of Australia
- Petron Corporation, Philippines
- Renaissance Capital - South Africa
- TNB Fuel Sdn Bhd - Malaysia
- Sree Jayajothi Cements Limited - India
- Ceylon Electricity Board - Sri Lanka
- Globalindo Alam Lestari - Indonesia
- Coal and Oil Company - UAE
- Bhoruka Overseas - Indonesia
- Wood Mackenzie - Singapore
- Rio Tinto Coal - Australia
- Videocon Industries ltd - India
- MS Steel International - UAE
- Straits Asia Resources Limited - Singapore
- Thiess Contractors Indonesia
- Meralco Power Generation, Philippines
- Parliament of New Zealand
- Essar Steel Hazira Ltd - India
- Jindal Steel & Power Ltd - India
- San Jose City I Power Corp, Philippines
- Malabar Cements Ltd - India
- Sinarmas Energy and Mining - Indonesia
- Intertek Mineral Services - Indonesia
- Asmin Koalindo Tuhup - Indonesia
- Directorate General of MIneral and Coal - Indonesia
- Edison Trading Spa - Italy
- Electricity Generating Authority of Thailand
- Dalmia Cement Bharat India
- Makarim & Taira - Indonesia
- GVK Power & Infra Limited - India
- Australian Commodity Traders Exchange
- Sojitz Corporation - Japan
- SMG Consultants - Indonesia
- Semirara Mining Corp, Philippines
- Gujarat Mineral Development Corp Ltd - India
- Deloitte Consulting - India
- Pipit Mutiara Jaya. PT, Indonesia
- Antam Resourcindo - Indonesia
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Timah Investasi Mineral - Indoneisa
- Rashtriya Ispat Nigam Limited - India
- Madhucon Powers Ltd - India
- Carbofer General Trading SA - India
- Grasim Industreis Ltd - India
- Mercator Lines Limited - India
- Energy Development Corp, Philippines
- Planning Commission, India
- McConnell Dowell - Australia
- Marubeni Corporation - India
- Indo Tambangraya Megah - Indonesia
- Bukit Baiduri Energy - Indonesia
- Kartika Selabumi Mining - Indonesia
- White Energy Company Limited
- ASAPP Information Group - India
- Singapore Mercantile Exchange
- TeaM Sual Corporation - Philippines
- Vedanta Resources Plc - India
- Sarangani Energy Corporation, Philippines
- Semirara Mining and Power Corporation, Philippines
- New Zealand Coal & Carbon
- Price Waterhouse Coopers - Russia
- Georgia Ports Authority, United States
- Bhatia International Limited - India
- Siam City Cement - Thailand
- Chettinad Cement Corporation Ltd - India
- Medco Energi Mining Internasional
- OPG Power Generation Pvt Ltd - India
- Directorate Of Revenue Intelligence - India
- Simpson Spence & Young - Indonesia
- Maheswari Brothers Coal Limited - India
- Binh Thuan Hamico - Vietnam
- SN Aboitiz Power Inc, Philippines
- Miang Besar Coal Terminal - Indonesia
- Pendopo Energi Batubara - Indonesia
- Mintek Dendrill Indonesia
- Xindia Steels Limited - India
- International Coal Ventures Pvt Ltd - India
- Offshore Bulk Terminal Pte Ltd, Singapore
- Goldman Sachs - Singapore
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- IHS Mccloskey Coal Group - USA
- Energy Link Ltd, New Zealand
- Romanian Commodities Exchange
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Barasentosa Lestari - Indonesia
- Indogreen Group - Indonesia
- European Bulk Services B.V. - Netherlands
- Mercuria Energy - Indonesia
- Orica Australia Pty. Ltd.
- Oldendorff Carriers - Singapore
- South Luzon Thermal Energy Corporation
- Vijayanagar Sugar Pvt Ltd - India
- Mjunction Services Limited - India
- Karbindo Abesyapradhi - Indoneisa
- Siam City Cement PLC, Thailand
- Trasteel International SA, Italy
- Karaikal Port Pvt Ltd - India
- Economic Council, Georgia
- PowerSource Philippines DevCo
- India Bulls Power Limited - India
- Uttam Galva Steels Limited - India
- AsiaOL BioFuels Corp., Philippines
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Kepco SPC Power Corporation, Philippines
- Global Coal Blending Company Limited - Australia
- The State Trading Corporation of India Ltd
- Bulk Trading Sa - Switzerland
- Eastern Energy - Thailand
- Anglo American - United Kingdom
- ICICI Bank Limited - India
- Maharashtra Electricity Regulatory Commission - India
- Africa Commodities Group - South Africa
- Gujarat Sidhee Cement - India
- Bahari Cakrawala Sebuku - Indonesia
- Bharathi Cement Corporation - India
- Banpu Public Company Limited - Thailand
- PetroVietnam Power Coal Import and Supply Company
- Leighton Contractors Pty Ltd - Australia
- Iligan Light & Power Inc, Philippines
- Lanco Infratech Ltd - India
- Electricity Authority, New Zealand
- Kalimantan Lumbung Energi - Indonesia
- Kohat Cement Company Ltd. - Pakistan
- Bukit Makmur.PT - Indonesia
- Sical Logistics Limited - India
- Eastern Coal Council - USA
- Tata Chemicals Ltd - India
- Ministry of Transport, Egypt
- Vizag Seaport Private Limited - India
- Holcim Trading Pte Ltd - Singapore
- Commonwealth Bank - Australia
- Heidelberg Cement - Germany
- Indika Energy - Indonesia
- Standard Chartered Bank - UAE
- Port Waratah Coal Services - Australia
- Jaiprakash Power Ventures ltd
- Power Finance Corporation Ltd., India
- Bangladesh Power Developement Board
- Indian Oil Corporation Limited
- Bank of Tokyo Mitsubishi UFJ Ltd
- Coalindo Energy - Indonesia
- Petrochimia International Co. Ltd.- Taiwan
- Central Electricity Authority - India
- Ind-Barath Power Infra Limited - India
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Samtan Co., Ltd - South Korea
- Tamil Nadu electricity Board
- Borneo Indobara - Indonesia
- Cigading International Bulk Terminal - Indonesia
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