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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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Friday, 06 September 24
REBOUND IN OIL DEMAND COULD LIFT MARKET IN LATTER HALF OF 2024 - BIMCO
Supply/demand
Based on a strong second half demand, the supply/balance is forecast to strengthen in 2024 but weaken slightly in 2025 as n ...
Friday, 06 September 24
GLOBAL SEABORNE LNG TRADE HAS CONTINUED TO INCREASE LAST YEAR - BANCHERO COSTA
Global seaborne LNG trade has continued to increase last year, helped also by the events in Ukraine which forced Europe to diversify away from Russ ...
Wednesday, 28 August 24
SEABORNE COAL IMPORTS INTO INDIA INCREASED BY +9.9% Y-O-Y TO 146.6 MLN T - BANCHERO COSTA
Global coal trade has really picked up pace over the past year, and is now fully back to pre-Covid levels said Banchero Costa Research in its lates ...
Tuesday, 06 August 24
EXERCISE CAUTION WITH AMMONIA SWITCH - BALTIC EXCHANGE
A new study from the Massachusetts Institute of Technology (MIT) has thrown a spanner into the plan to transition ships from diesel fuel to ammonia ...
Friday, 02 August 24
ENERGY MARKET DEVELOPMENTS: COAL AND NATURAL GAS PRICES REACH RECORD HIGHS - WORLD BANK
The recent surge in natural gas and coal prices has been so swift that the main benchmarks were roughly three times higher in 2022Q2 compared to a ...
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- PNOC Exploration Corporation - Philippines
- Meenaskhi Energy Private Limited - India
- Anglo American - United Kingdom
- Orica Australia Pty. Ltd.
- Pipit Mutiara Jaya. PT, Indonesia
- Bukit Baiduri Energy - Indonesia
- Global Coal Blending Company Limited - Australia
- Borneo Indobara - Indonesia
- Larsen & Toubro Limited - India
- Metalloyd Limited - United Kingdom
- Essar Steel Hazira Ltd - India
- Chettinad Cement Corporation Ltd - India
- The University of Queensland
- ASAPP Information Group - India
- Renaissance Capital - South Africa
- Vizag Seaport Private Limited - India
- Sakthi Sugars Limited - India
- Karaikal Port Pvt Ltd - India
- Thai Mozambique Logistica
- Kalimantan Lumbung Energi - Indonesia
- Bahari Cakrawala Sebuku - Indonesia
- Oldendorff Carriers - Singapore
- Karbindo Abesyapradhi - Indoneisa
- Altura Mining Limited, Indonesia
- Savvy Resources Ltd - HongKong
- Bayan Resources Tbk. - Indonesia
- Electricity Authority, New Zealand
- Indian Energy Exchange, India
- Gujarat Electricity Regulatory Commission - India
- SMC Global Power, Philippines
- Bank of Tokyo Mitsubishi UFJ Ltd
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Indogreen Group - Indonesia
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Barasentosa Lestari - Indonesia
- The State Trading Corporation of India Ltd
- Vedanta Resources Plc - India
- Sojitz Corporation - Japan
- TNB Fuel Sdn Bhd - Malaysia
- VISA Power Limited - India
- Bharathi Cement Corporation - India
- Indika Energy - Indonesia
- Mercuria Energy - Indonesia
- Australian Commodity Traders Exchange
- Holcim Trading Pte Ltd - Singapore
- Miang Besar Coal Terminal - Indonesia
- GMR Energy Limited - India
- South Luzon Thermal Energy Corporation
- San Jose City I Power Corp, Philippines
- Kartika Selabumi Mining - Indonesia
- Straits Asia Resources Limited - Singapore
- Aboitiz Power Corporation - Philippines
- Chamber of Mines of South Africa
- Bukit Asam (Persero) Tbk - Indonesia
- Sree Jayajothi Cements Limited - India
- Mintek Dendrill Indonesia
- AsiaOL BioFuels Corp., Philippines
- Coastal Gujarat Power Limited - India
- OPG Power Generation Pvt Ltd - India
- European Bulk Services B.V. - Netherlands
- Toyota Tsusho Corporation, Japan
- Baramulti Group, Indonesia
- Krishnapatnam Port Company Ltd. - India
- Binh Thuan Hamico - Vietnam
- Rashtriya Ispat Nigam Limited - India
- IHS Mccloskey Coal Group - USA
- Parliament of New Zealand
- London Commodity Brokers - England
- PetroVietnam Power Coal Import and Supply Company
- Kideco Jaya Agung - Indonesia
- Power Finance Corporation Ltd., India
- Iligan Light & Power Inc, Philippines
- CIMB Investment Bank - Malaysia
- Directorate Of Revenue Intelligence - India
- Parry Sugars Refinery, India
- Wilmar Investment Holdings
- Coal and Oil Company - UAE
- Merrill Lynch Commodities Europe
- New Zealand Coal & Carbon
- Medco Energi Mining Internasional
- Central Electricity Authority - India
- Eastern Coal Council - USA
- Therma Luzon, Inc, Philippines
- Port Waratah Coal Services - Australia
- Bulk Trading Sa - Switzerland
- The Treasury - Australian Government
- Energy Development Corp, Philippines
- Planning Commission, India
- Wood Mackenzie - Singapore
- Directorate General of MIneral and Coal - Indonesia
- Indian Oil Corporation Limited
- Kepco SPC Power Corporation, Philippines
- International Coal Ventures Pvt Ltd - India
- Standard Chartered Bank - UAE
- Cement Manufacturers Association - India
- Ministry of Finance - Indonesia
- Malabar Cements Ltd - India
- GN Power Mariveles Coal Plant, Philippines
- Singapore Mercantile Exchange
- Offshore Bulk Terminal Pte Ltd, Singapore
- Latin American Coal - Colombia
- Kohat Cement Company Ltd. - Pakistan
- Bhoruka Overseas - Indonesia
- Economic Council, Georgia
- Siam City Cement PLC, Thailand
- Minerals Council of Australia
- GVK Power & Infra Limited - India
- Rio Tinto Coal - Australia
- Madhucon Powers Ltd - India
- Posco Energy - South Korea
- Commonwealth Bank - Australia
- McConnell Dowell - Australia
- Riau Bara Harum - Indonesia
- PTC India Limited - India
- Billiton Holdings Pty Ltd - Australia
- Global Green Power PLC Corporation, Philippines
- Aditya Birla Group - India
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Semirara Mining and Power Corporation, Philippines
- Bukit Makmur.PT - Indonesia
- Trasteel International SA, Italy
- Kumho Petrochemical, South Korea
- Coalindo Energy - Indonesia
- Petrochimia International Co. Ltd.- Taiwan
- Bhatia International Limited - India
- Kaltim Prima Coal - Indonesia
- PowerSource Philippines DevCo
- MS Steel International - UAE
- Neyveli Lignite Corporation Ltd, - India
- Attock Cement Pakistan Limited
- TeaM Sual Corporation - Philippines
- Energy Link Ltd, New Zealand
- Central Java Power - Indonesia
- Bangladesh Power Developement Board
- Edison Trading Spa - Italy
- Sical Logistics Limited - India
- Australian Coal Association
- Makarim & Taira - Indonesia
- Interocean Group of Companies - India
- Cigading International Bulk Terminal - Indonesia
- Tamil Nadu electricity Board
- Bhushan Steel Limited - India
- Star Paper Mills Limited - India
- Leighton Contractors Pty Ltd - Australia
- Ambuja Cements Ltd - India
- Intertek Mineral Services - Indonesia
- SN Aboitiz Power Inc, Philippines
- Marubeni Corporation - India
- Ministry of Transport, Egypt
- Gujarat Sidhee Cement - India
- Africa Commodities Group - South Africa
- Georgia Ports Authority, United States
- Deloitte Consulting - India
- IEA Clean Coal Centre - UK
- Eastern Energy - Thailand
- LBH Netherlands Bv - Netherlands
- Goldman Sachs - Singapore
- Ind-Barath Power Infra Limited - India
- Siam City Cement - Thailand
- Globalindo Alam Lestari - Indonesia
- Kapuas Tunggal Persada - Indonesia
- Ceylon Electricity Board - Sri Lanka
- Manunggal Multi Energi - Indonesia
- Pendopo Energi Batubara - Indonesia
- Lanco Infratech Ltd - India
- CNBM International Corporation - China
- Ministry of Mines - Canada
- SMG Consultants - Indonesia
- Sarangani Energy Corporation, Philippines
- Global Business Power Corporation, Philippines
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Grasim Industreis Ltd - India
- Petron Corporation, Philippines
- Sindya Power Generating Company Private Ltd
- Kobexindo Tractors - Indoneisa
- Maharashtra Electricity Regulatory Commission - India
- White Energy Company Limited
- Gujarat Mineral Development Corp Ltd - India
- Alfred C Toepfer International GmbH - Germany
- Mercator Lines Limited - India
- Heidelberg Cement - Germany
- Dalmia Cement Bharat India
- Antam Resourcindo - Indonesia
- Xindia Steels Limited - India
- Samtan Co., Ltd - South Korea
- Salva Resources Pvt Ltd - India
- Banpu Public Company Limited - Thailand
- Vijayanagar Sugar Pvt Ltd - India
- Jorong Barutama Greston.PT - Indonesia
- Carbofer General Trading SA - India
- Semirara Mining Corp, Philippines
- Thiess Contractors Indonesia
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Indo Tambangraya Megah - Indonesia
- Tata Chemicals Ltd - India
- Sinarmas Energy and Mining - Indonesia
- Mjunction Services Limited - India
- Videocon Industries ltd - India
- Price Waterhouse Coopers - Russia
- Electricity Generating Authority of Thailand
- Indonesian Coal Mining Association
- Jindal Steel & Power Ltd - India
- Simpson Spence & Young - Indonesia
- Independent Power Producers Association of India
- Maheswari Brothers Coal Limited - India
- Jaiprakash Power Ventures ltd
- Formosa Plastics Group - Taiwan
- ICICI Bank Limited - India
- Timah Investasi Mineral - Indoneisa
- Romanian Commodities Exchange
- GAC Shipping (India) Pvt Ltd
- Uttam Galva Steels Limited - India
- India Bulls Power Limited - India
- Agrawal Coal Company - India
- Meralco Power Generation, Philippines
- Asmin Koalindo Tuhup - Indonesia
- Orica Mining Services - Indonesia
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