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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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Wednesday, 20 October 21
CHINA COAL HITS RECORD HIGH AMID TIGHT SUPPLIES - REUTERS
China coal prices hit a record high on Tuesday buoyed by a widening power crunch and cold weather despite Beijing’s efforts to bolster supply ...
Tuesday, 19 October 21
SPONGE IRON SECTOR MIGHT REPORT NEGATIVE GROWTH DUE TO COAL CRISIS: SIMA - PTI
The domestic sponge iron industry might report a negative growth in the ongoing December quarter “if the shortage of coal is allowed to conti ...
Tuesday, 19 October 21
COAL INDIA, THE FALL GUY FOR POWER CRISIS - INDIA EXPRESS
The post-Covid economic recovery has led to a major increase in the demand for power, both in India and globally. In India, coal-based power plants ...
Saturday, 16 October 21
SOLAR INSTALLATION SURGE PUTS INDIA ON TRACK TO CAP COAL-FIRED POWER AS EARLY AS 2024 - IEEFA
Recent increase in solar power installations could push coal to peak sooner than expected
If India keeps installing solar capacity a ...
Saturday, 16 October 21
DESPITE HIGHER COAL PRICES, U.S. COAL RECOVERY LOOKS WEAK BY MOST MEASURES - IEEFA
U.S. coal sector is locked into a long-term sectoral decline
Coal prices have surged to the highest level in years in the U.S., and have soare ...
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- Latin American Coal - Colombia
- Lanco Infratech Ltd - India
- GN Power Mariveles Coal Plant, Philippines
- Rashtriya Ispat Nigam Limited - India
- Georgia Ports Authority, United States
- Posco Energy - South Korea
- Africa Commodities Group - South Africa
- Chamber of Mines of South Africa
- Edison Trading Spa - Italy
- Minerals Council of Australia
- Essar Steel Hazira Ltd - India
- Ceylon Electricity Board - Sri Lanka
- Eastern Energy - Thailand
- Sarangani Energy Corporation, Philippines
- Jorong Barutama Greston.PT - Indonesia
- Kobexindo Tractors - Indoneisa
- Tamil Nadu electricity Board
- McConnell Dowell - Australia
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Economic Council, Georgia
- Bharathi Cement Corporation - India
- Directorate Of Revenue Intelligence - India
- Planning Commission, India
- Mercuria Energy - Indonesia
- Gujarat Mineral Development Corp Ltd - India
- The Treasury - Australian Government
- Iligan Light & Power Inc, Philippines
- Singapore Mercantile Exchange
- New Zealand Coal & Carbon
- Central Electricity Authority - India
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Riau Bara Harum - Indonesia
- Star Paper Mills Limited - India
- Kartika Selabumi Mining - Indonesia
- European Bulk Services B.V. - Netherlands
- Petrochimia International Co. Ltd.- Taiwan
- Standard Chartered Bank - UAE
- Xindia Steels Limited - India
- Billiton Holdings Pty Ltd - Australia
- MS Steel International - UAE
- Makarim & Taira - Indonesia
- CNBM International Corporation - China
- Mercator Lines Limited - India
- Electricity Generating Authority of Thailand
- SMC Global Power, Philippines
- LBH Netherlands Bv - Netherlands
- Chettinad Cement Corporation Ltd - India
- Timah Investasi Mineral - Indoneisa
- Vedanta Resources Plc - India
- Interocean Group of Companies - India
- Cigading International Bulk Terminal - Indonesia
- Parry Sugars Refinery, India
- Jaiprakash Power Ventures ltd
- AsiaOL BioFuels Corp., Philippines
- Globalindo Alam Lestari - Indonesia
- Global Green Power PLC Corporation, Philippines
- Straits Asia Resources Limited - Singapore
- Asmin Koalindo Tuhup - Indonesia
- Wilmar Investment Holdings
- Orica Mining Services - Indonesia
- OPG Power Generation Pvt Ltd - India
- Petron Corporation, Philippines
- Carbofer General Trading SA - India
- Maharashtra Electricity Regulatory Commission - India
- Bhatia International Limited - India
- Holcim Trading Pte Ltd - Singapore
- Vizag Seaport Private Limited - India
- Australian Commodity Traders Exchange
- Bhoruka Overseas - Indonesia
- ASAPP Information Group - India
- San Jose City I Power Corp, Philippines
- Rio Tinto Coal - Australia
- Parliament of New Zealand
- Borneo Indobara - Indonesia
- Banpu Public Company Limited - Thailand
- Attock Cement Pakistan Limited
- Electricity Authority, New Zealand
- Eastern Coal Council - USA
- Port Waratah Coal Services - Australia
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Thiess Contractors Indonesia
- Alfred C Toepfer International GmbH - Germany
- VISA Power Limited - India
- Bulk Trading Sa - Switzerland
- Renaissance Capital - South Africa
- Jindal Steel & Power Ltd - India
- Anglo American - United Kingdom
- Global Coal Blending Company Limited - Australia
- Leighton Contractors Pty Ltd - Australia
- Meralco Power Generation, Philippines
- Krishnapatnam Port Company Ltd. - India
- CIMB Investment Bank - Malaysia
- Aditya Birla Group - India
- Bahari Cakrawala Sebuku - Indonesia
- Uttam Galva Steels Limited - India
- Meenaskhi Energy Private Limited - India
- Vijayanagar Sugar Pvt Ltd - India
- Sical Logistics Limited - India
- Intertek Mineral Services - Indonesia
- Coastal Gujarat Power Limited - India
- Independent Power Producers Association of India
- Salva Resources Pvt Ltd - India
- Samtan Co., Ltd - South Korea
- Deloitte Consulting - India
- Miang Besar Coal Terminal - Indonesia
- Mintek Dendrill Indonesia
- Karaikal Port Pvt Ltd - India
- Antam Resourcindo - Indonesia
- Gujarat Sidhee Cement - India
- Karbindo Abesyapradhi - Indoneisa
- Barasentosa Lestari - Indonesia
- Sinarmas Energy and Mining - Indonesia
- SN Aboitiz Power Inc, Philippines
- Bukit Asam (Persero) Tbk - Indonesia
- Kideco Jaya Agung - Indonesia
- Oldendorff Carriers - Singapore
- Mjunction Services Limited - India
- Coalindo Energy - Indonesia
- PTC India Limited - India
- Cement Manufacturers Association - India
- Ambuja Cements Ltd - India
- Bayan Resources Tbk. - Indonesia
- Kalimantan Lumbung Energi - Indonesia
- Manunggal Multi Energi - Indonesia
- Videocon Industries ltd - India
- Bangladesh Power Developement Board
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Sindya Power Generating Company Private Ltd
- Energy Development Corp, Philippines
- Ministry of Finance - Indonesia
- Bukit Baiduri Energy - Indonesia
- Indian Energy Exchange, India
- Marubeni Corporation - India
- Formosa Plastics Group - Taiwan
- Simpson Spence & Young - Indonesia
- Indo Tambangraya Megah - Indonesia
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Semirara Mining and Power Corporation, Philippines
- Semirara Mining Corp, Philippines
- Indian Oil Corporation Limited
- Metalloyd Limited - United Kingdom
- PetroVietnam Power Coal Import and Supply Company
- PNOC Exploration Corporation - Philippines
- Kaltim Prima Coal - Indonesia
- London Commodity Brokers - England
- The University of Queensland
- Australian Coal Association
- Coal and Oil Company - UAE
- Aboitiz Power Corporation - Philippines
- Kapuas Tunggal Persada - Indonesia
- Gujarat Electricity Regulatory Commission - India
- Altura Mining Limited, Indonesia
- Agrawal Coal Company - India
- ICICI Bank Limited - India
- Kepco SPC Power Corporation, Philippines
- Pendopo Energi Batubara - Indonesia
- Directorate General of MIneral and Coal - Indonesia
- International Coal Ventures Pvt Ltd - India
- Bhushan Steel Limited - India
- India Bulls Power Limited - India
- GVK Power & Infra Limited - India
- Indogreen Group - Indonesia
- Orica Australia Pty. Ltd.
- Binh Thuan Hamico - Vietnam
- SMG Consultants - Indonesia
- TNB Fuel Sdn Bhd - Malaysia
- Offshore Bulk Terminal Pte Ltd, Singapore
- Indonesian Coal Mining Association
- GMR Energy Limited - India
- Siam City Cement PLC, Thailand
- Kumho Petrochemical, South Korea
- South Luzon Thermal Energy Corporation
- Thai Mozambique Logistica
- TeaM Sual Corporation - Philippines
- Romanian Commodities Exchange
- Central Java Power - Indonesia
- Larsen & Toubro Limited - India
- Savvy Resources Ltd - HongKong
- IHS Mccloskey Coal Group - USA
- Ind-Barath Power Infra Limited - India
- Bukit Makmur.PT - Indonesia
- Kohat Cement Company Ltd. - Pakistan
- Dalmia Cement Bharat India
- Pipit Mutiara Jaya. PT, Indonesia
- Madhucon Powers Ltd - India
- Power Finance Corporation Ltd., India
- Sojitz Corporation - Japan
- Trasteel International SA, Italy
- Wood Mackenzie - Singapore
- Tata Chemicals Ltd - India
- IEA Clean Coal Centre - UK
- Global Business Power Corporation, Philippines
- Ministry of Transport, Egypt
- Baramulti Group, Indonesia
- Bank of Tokyo Mitsubishi UFJ Ltd
- Commonwealth Bank - Australia
- Sree Jayajothi Cements Limited - India
- Medco Energi Mining Internasional
- Heidelberg Cement - Germany
- Goldman Sachs - Singapore
- White Energy Company Limited
- Siam City Cement - Thailand
- Malabar Cements Ltd - India
- Price Waterhouse Coopers - Russia
- Energy Link Ltd, New Zealand
- PowerSource Philippines DevCo
- Merrill Lynch Commodities Europe
- Maheswari Brothers Coal Limited - India
- GAC Shipping (India) Pvt Ltd
- Sakthi Sugars Limited - India
- The State Trading Corporation of India Ltd
- Neyveli Lignite Corporation Ltd, - India
- Therma Luzon, Inc, Philippines
- Toyota Tsusho Corporation, Japan
- Ministry of Mines - Canada
- Grasim Industreis Ltd - India
- Indika Energy - Indonesia
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