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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, 02 August 24
COAL MARKET DEVELOPMENTS: FALLING PRICES AMID RECORD-HIGH OUTPUT - WORLD BANK
Coal prices inched up in May (m/m) following an 8 percent decline in 2024Q1. The Australian and South African benchmarks have plummeted more ...
Friday, 26 July 24
FUELEU MARITME IS COMING. IS YOUR CHARTERPARTY READY? - GARD
With less than six months to implementation of FuelEU Maritime in EU and EEA trades, there has been little published advice regarding how to alloca ...
Thursday, 04 July 24
INDIA'S COAL PRODUCTION RISES 14% IN JUNE - PTI
The country’s coal production rose by 14.49% to 84.63 million tonne (MT) in June. The country’s coal output was 73.92 MT in June last f ...
Tuesday, 02 July 24
NTPC CAPTIVE COAL OUTPUT GROWS 15% IN Q1; DESPATCH RISES 17%
State-owned NTPC on Monday reported a 15 per cent year-on-year increase in the production of coal from captives mines to 9.862 metric million tonne ...
Friday, 28 June 24
KOSPO INVITED BIDS FOR 400,000 MT OF MINIMUM 4000 NCV COAL FOR FIVE YEARS
Korea Southern Power Co., Ltd. (KOSPO), is inviting bids for total 400,000 MT of Low Calorific Value Coal for 5 years starting from July 2024 until ...
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- Holcim Trading Pte Ltd - Singapore
- Indika Energy - Indonesia
- Posco Energy - South Korea
- Jindal Steel & Power Ltd - India
- GAC Shipping (India) Pvt Ltd
- GVK Power & Infra Limited - India
- Pendopo Energi Batubara - Indonesia
- Global Business Power Corporation, Philippines
- Antam Resourcindo - Indonesia
- Madhucon Powers Ltd - India
- Bangladesh Power Developement Board
- Indo Tambangraya Megah - Indonesia
- Simpson Spence & Young - Indonesia
- Lanco Infratech Ltd - India
- Leighton Contractors Pty Ltd - Australia
- Eastern Coal Council - USA
- Bukit Asam (Persero) Tbk - Indonesia
- Baramulti Group, Indonesia
- Georgia Ports Authority, United States
- Vizag Seaport Private Limited - India
- Global Coal Blending Company Limited - Australia
- Commonwealth Bank - Australia
- Medco Energi Mining Internasional
- Parliament of New Zealand
- PTC India Limited - India
- Gujarat Mineral Development Corp Ltd - India
- Sarangani Energy Corporation, Philippines
- Semirara Mining and Power Corporation, Philippines
- Coastal Gujarat Power Limited - India
- Bukit Baiduri Energy - Indonesia
- Merrill Lynch Commodities Europe
- Makarim & Taira - Indonesia
- Pipit Mutiara Jaya. PT, Indonesia
- TeaM Sual Corporation - Philippines
- Billiton Holdings Pty Ltd - Australia
- Offshore Bulk Terminal Pte Ltd, Singapore
- Deloitte Consulting - India
- Indogreen Group - Indonesia
- Chamber of Mines of South Africa
- GMR Energy Limited - India
- Edison Trading Spa - Italy
- Thai Mozambique Logistica
- Meenaskhi Energy Private Limited - India
- Indian Oil Corporation Limited
- Kumho Petrochemical, South Korea
- Mjunction Services Limited - India
- Electricity Generating Authority of Thailand
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Alfred C Toepfer International GmbH - Germany
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Eastern Energy - Thailand
- Vijayanagar Sugar Pvt Ltd - India
- Grasim Industreis Ltd - India
- Anglo American - United Kingdom
- Ambuja Cements Ltd - India
- Chettinad Cement Corporation Ltd - India
- Petrochimia International Co. Ltd.- Taiwan
- Kepco SPC Power Corporation, Philippines
- Directorate General of MIneral and Coal - Indonesia
- Central Java Power - Indonesia
- CNBM International Corporation - China
- SMC Global Power, Philippines
- Romanian Commodities Exchange
- Oldendorff Carriers - Singapore
- Straits Asia Resources Limited - Singapore
- Economic Council, Georgia
- Videocon Industries ltd - India
- SMG Consultants - Indonesia
- White Energy Company Limited
- Larsen & Toubro Limited - India
- Trasteel International SA, Italy
- Kobexindo Tractors - Indoneisa
- Miang Besar Coal Terminal - Indonesia
- Heidelberg Cement - Germany
- Agrawal Coal Company - India
- Sree Jayajothi Cements Limited - India
- Thiess Contractors Indonesia
- Bank of Tokyo Mitsubishi UFJ Ltd
- London Commodity Brokers - England
- ICICI Bank Limited - India
- Intertek Mineral Services - Indonesia
- Price Waterhouse Coopers - Russia
- Ind-Barath Power Infra Limited - India
- Orica Mining Services - Indonesia
- Kaltim Prima Coal - Indonesia
- Indian Energy Exchange, India
- Dalmia Cement Bharat India
- Goldman Sachs - Singapore
- Coalindo Energy - Indonesia
- Ceylon Electricity Board - Sri Lanka
- Latin American Coal - Colombia
- Bhoruka Overseas - Indonesia
- Australian Commodity Traders Exchange
- Rio Tinto Coal - Australia
- India Bulls Power Limited - India
- Wilmar Investment Holdings
- Power Finance Corporation Ltd., India
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Directorate Of Revenue Intelligence - India
- Interocean Group of Companies - India
- Maharashtra Electricity Regulatory Commission - India
- Kalimantan Lumbung Energi - Indonesia
- Barasentosa Lestari - Indonesia
- Globalindo Alam Lestari - Indonesia
- TNB Fuel Sdn Bhd - Malaysia
- Wood Mackenzie - Singapore
- Africa Commodities Group - South Africa
- PetroVietnam Power Coal Import and Supply Company
- IHS Mccloskey Coal Group - USA
- Carbofer General Trading SA - India
- Timah Investasi Mineral - Indoneisa
- Riau Bara Harum - Indonesia
- Mintek Dendrill Indonesia
- PNOC Exploration Corporation - Philippines
- Semirara Mining Corp, Philippines
- Singapore Mercantile Exchange
- Banpu Public Company Limited - Thailand
- Orica Australia Pty. Ltd.
- Sojitz Corporation - Japan
- Ministry of Transport, Egypt
- Star Paper Mills Limited - India
- Kohat Cement Company Ltd. - Pakistan
- Kapuas Tunggal Persada - Indonesia
- Samtan Co., Ltd - South Korea
- Jorong Barutama Greston.PT - Indonesia
- Uttam Galva Steels Limited - India
- Bulk Trading Sa - Switzerland
- Sindya Power Generating Company Private Ltd
- Manunggal Multi Energi - Indonesia
- PowerSource Philippines DevCo
- Port Waratah Coal Services - Australia
- Meralco Power Generation, Philippines
- Metalloyd Limited - United Kingdom
- LBH Netherlands Bv - Netherlands
- Vedanta Resources Plc - India
- Sical Logistics Limited - India
- Mercator Lines Limited - India
- Altura Mining Limited, Indonesia
- Cement Manufacturers Association - India
- Formosa Plastics Group - Taiwan
- Electricity Authority, New Zealand
- Marubeni Corporation - India
- IEA Clean Coal Centre - UK
- International Coal Ventures Pvt Ltd - India
- Energy Development Corp, Philippines
- Kideco Jaya Agung - Indonesia
- Therma Luzon, Inc, Philippines
- Central Electricity Authority - India
- Maheswari Brothers Coal Limited - India
- Siam City Cement PLC, Thailand
- Krishnapatnam Port Company Ltd. - India
- Siam City Cement - Thailand
- South Luzon Thermal Energy Corporation
- Karaikal Port Pvt Ltd - India
- Sinarmas Energy and Mining - Indonesia
- Malabar Cements Ltd - India
- SN Aboitiz Power Inc, Philippines
- Kartika Selabumi Mining - Indonesia
- Aditya Birla Group - India
- The University of Queensland
- Essar Steel Hazira Ltd - India
- Parry Sugars Refinery, India
- Renaissance Capital - South Africa
- Karbindo Abesyapradhi - Indoneisa
- Aboitiz Power Corporation - Philippines
- Bhatia International Limited - India
- Coal and Oil Company - UAE
- Bahari Cakrawala Sebuku - Indonesia
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- The State Trading Corporation of India Ltd
- Bayan Resources Tbk. - Indonesia
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Bukit Makmur.PT - Indonesia
- Neyveli Lignite Corporation Ltd, - India
- Binh Thuan Hamico - Vietnam
- Indonesian Coal Mining Association
- Mercuria Energy - Indonesia
- Xindia Steels Limited - India
- Bharathi Cement Corporation - India
- Attock Cement Pakistan Limited
- Global Green Power PLC Corporation, Philippines
- VISA Power Limited - India
- Gujarat Sidhee Cement - India
- New Zealand Coal & Carbon
- Sakthi Sugars Limited - India
- Tata Chemicals Ltd - India
- Australian Coal Association
- The Treasury - Australian Government
- Gujarat Electricity Regulatory Commission - India
- Minerals Council of Australia
- Salva Resources Pvt Ltd - India
- Jaiprakash Power Ventures ltd
- Iligan Light & Power Inc, Philippines
- AsiaOL BioFuels Corp., Philippines
- Ministry of Finance - Indonesia
- Ministry of Mines - Canada
- Standard Chartered Bank - UAE
- Independent Power Producers Association of India
- Savvy Resources Ltd - HongKong
- Toyota Tsusho Corporation, Japan
- Asmin Koalindo Tuhup - Indonesia
- Bhushan Steel Limited - India
- CIMB Investment Bank - Malaysia
- European Bulk Services B.V. - Netherlands
- OPG Power Generation Pvt Ltd - India
- MS Steel International - UAE
- Tamil Nadu electricity Board
- ASAPP Information Group - India
- McConnell Dowell - Australia
- Rashtriya Ispat Nigam Limited - India
- San Jose City I Power Corp, Philippines
- Energy Link Ltd, New Zealand
- Borneo Indobara - Indonesia
- Cigading International Bulk Terminal - Indonesia
- GN Power Mariveles Coal Plant, Philippines
- Planning Commission, India
- Petron Corporation, Philippines
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