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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, 28 June 24
INDIAN POWER STATIONS STOCKED WITH BUMPER COAL SUPPLY AS TRANSPORT WOES EASE - BUSINESS STANDARD
Even as power demand has touched a historic high of 250 gigawatts (Gw) amid sweltering heat this June, India’s power stations are stocked wit ...
Friday, 28 June 24
INDIA'S CY23 COAL USE LARGER THAN NORTH AMERICA, EUROPE COMBINED - THE HINDU
For the first time, India’s coal consumption surpassed that of North America and Europe combined in the calendar year 2023, said Energy Insti ...
Monday, 24 June 24
PLN'S FINANCIAL SUSTAINABILITY RESTS ON ACCELERATED COAL RETIREMENT AND RENEWABLES DEPLOYMENT - MUTYA YUSTIKA
On 28 May 2024, Indonesia’s national electricity utility, PT Perusahaan Listrik Negara (PLN), released its financial report for 2023. Althoug ...
Monday, 24 June 24
INDIA'S COAL-BASED POWER DEMAND AT ALL-TIME HIGH, GOVERNMENT SAYS - REUTERS
India’s demand for coal-based power has risen by 7.3% this fiscal year to an all-time high, the government said in a statement on Wednesday.
...
Monday, 24 June 24
CHINA'S COAL INDUSTRY TURNS GREENER THROUGH INNOVATIVE APPROACHES - PEOPLE'S DAILY
At an opencast mine operated by Inner Mongolia Pingzhuang Coal Group Co. Ltd., a subsidiary of CHN Energy Investment Group (CHN Energy), a 14-meter ...
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- Coalindo Energy - Indonesia
- Goldman Sachs - Singapore
- TeaM Sual Corporation - Philippines
- Chamber of Mines of South Africa
- Indika Energy - Indonesia
- Maheswari Brothers Coal Limited - India
- Ministry of Finance - Indonesia
- Singapore Mercantile Exchange
- London Commodity Brokers - England
- Wilmar Investment Holdings
- Makarim & Taira - Indonesia
- PTC India Limited - India
- Leighton Contractors Pty Ltd - Australia
- GVK Power & Infra Limited - India
- Vizag Seaport Private Limited - India
- Bangladesh Power Developement Board
- Dalmia Cement Bharat India
- Indo Tambangraya Megah - Indonesia
- Altura Mining Limited, Indonesia
- Attock Cement Pakistan Limited
- Toyota Tsusho Corporation, Japan
- SMC Global Power, Philippines
- Carbofer General Trading SA - India
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Bhatia International Limited - India
- Latin American Coal - Colombia
- Malabar Cements Ltd - India
- Oldendorff Carriers - Singapore
- Xindia Steels Limited - India
- New Zealand Coal & Carbon
- The Treasury - Australian Government
- Grasim Industreis Ltd - India
- Global Green Power PLC Corporation, Philippines
- Thai Mozambique Logistica
- Meenaskhi Energy Private Limited - India
- Jaiprakash Power Ventures ltd
- SMG Consultants - Indonesia
- Savvy Resources Ltd - HongKong
- Timah Investasi Mineral - Indoneisa
- Thiess Contractors Indonesia
- Independent Power Producers Association of India
- Orica Australia Pty. Ltd.
- Parliament of New Zealand
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Power Finance Corporation Ltd., India
- Sakthi Sugars Limited - India
- Kalimantan Lumbung Energi - Indonesia
- Central Electricity Authority - India
- Medco Energi Mining Internasional
- The State Trading Corporation of India Ltd
- Star Paper Mills Limited - India
- Essar Steel Hazira Ltd - India
- Coastal Gujarat Power Limited - India
- Deloitte Consulting - India
- Indonesian Coal Mining Association
- Trasteel International SA, Italy
- Wood Mackenzie - Singapore
- Energy Link Ltd, New Zealand
- Kideco Jaya Agung - Indonesia
- Central Java Power - Indonesia
- Eastern Coal Council - USA
- TNB Fuel Sdn Bhd - Malaysia
- Binh Thuan Hamico - Vietnam
- Economic Council, Georgia
- GAC Shipping (India) Pvt Ltd
- Ceylon Electricity Board - Sri Lanka
- Petrochimia International Co. Ltd.- Taiwan
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Aboitiz Power Corporation - Philippines
- Directorate Of Revenue Intelligence - India
- South Luzon Thermal Energy Corporation
- Rashtriya Ispat Nigam Limited - India
- AsiaOL BioFuels Corp., Philippines
- Barasentosa Lestari - Indonesia
- CIMB Investment Bank - Malaysia
- Petron Corporation, Philippines
- Sical Logistics Limited - India
- Kobexindo Tractors - Indoneisa
- IEA Clean Coal Centre - UK
- GMR Energy Limited - India
- Baramulti Group, Indonesia
- Bharathi Cement Corporation - India
- Sarangani Energy Corporation, Philippines
- Bhoruka Overseas - Indonesia
- Kepco SPC Power Corporation, Philippines
- Mjunction Services Limited - India
- Australian Commodity Traders Exchange
- Bank of Tokyo Mitsubishi UFJ Ltd
- Parry Sugars Refinery, India
- Straits Asia Resources Limited - Singapore
- Bukit Makmur.PT - Indonesia
- Australian Coal Association
- Merrill Lynch Commodities Europe
- Siam City Cement - Thailand
- Simpson Spence & Young - Indonesia
- McConnell Dowell - Australia
- Kohat Cement Company Ltd. - Pakistan
- Bukit Asam (Persero) Tbk - Indonesia
- Mercuria Energy - Indonesia
- CNBM International Corporation - China
- Planning Commission, India
- Sojitz Corporation - Japan
- White Energy Company Limited
- Sree Jayajothi Cements Limited - India
- Mintek Dendrill Indonesia
- Electricity Authority, New Zealand
- Georgia Ports Authority, United States
- Kapuas Tunggal Persada - Indonesia
- Jindal Steel & Power Ltd - India
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Ministry of Mines - Canada
- Global Coal Blending Company Limited - Australia
- Neyveli Lignite Corporation Ltd, - India
- Karbindo Abesyapradhi - Indoneisa
- Bayan Resources Tbk. - Indonesia
- Energy Development Corp, Philippines
- Global Business Power Corporation, Philippines
- San Jose City I Power Corp, Philippines
- Port Waratah Coal Services - Australia
- Therma Luzon, Inc, Philippines
- SN Aboitiz Power Inc, Philippines
- Marubeni Corporation - India
- Cement Manufacturers Association - India
- Romanian Commodities Exchange
- Indian Energy Exchange, India
- PetroVietnam Power Coal Import and Supply Company
- Edison Trading Spa - Italy
- Electricity Generating Authority of Thailand
- Chettinad Cement Corporation Ltd - India
- Samtan Co., Ltd - South Korea
- Formosa Plastics Group - Taiwan
- Orica Mining Services - Indonesia
- Interocean Group of Companies - India
- Karaikal Port Pvt Ltd - India
- Vijayanagar Sugar Pvt Ltd - India
- Rio Tinto Coal - Australia
- Pendopo Energi Batubara - Indonesia
- Bhushan Steel Limited - India
- Cigading International Bulk Terminal - Indonesia
- Metalloyd Limited - United Kingdom
- Semirara Mining and Power Corporation, Philippines
- Mercator Lines Limited - India
- Coal and Oil Company - UAE
- Kaltim Prima Coal - Indonesia
- Antam Resourcindo - Indonesia
- Asmin Koalindo Tuhup - Indonesia
- Anglo American - United Kingdom
- European Bulk Services B.V. - Netherlands
- ICICI Bank Limited - India
- MS Steel International - UAE
- Indogreen Group - Indonesia
- Gujarat Mineral Development Corp Ltd - India
- Tamil Nadu electricity Board
- Africa Commodities Group - South Africa
- Salva Resources Pvt Ltd - India
- VISA Power Limited - India
- Bulk Trading Sa - Switzerland
- Gujarat Electricity Regulatory Commission - India
- Ind-Barath Power Infra Limited - India
- LBH Netherlands Bv - Netherlands
- Renaissance Capital - South Africa
- Directorate General of MIneral and Coal - Indonesia
- Semirara Mining Corp, Philippines
- Price Waterhouse Coopers - Russia
- Banpu Public Company Limited - Thailand
- Globalindo Alam Lestari - Indonesia
- Commonwealth Bank - Australia
- Uttam Galva Steels Limited - India
- Riau Bara Harum - Indonesia
- Miang Besar Coal Terminal - Indonesia
- PowerSource Philippines DevCo
- Kartika Selabumi Mining - Indonesia
- Bahari Cakrawala Sebuku - Indonesia
- Borneo Indobara - Indonesia
- Tata Chemicals Ltd - India
- Agrawal Coal Company - India
- Iligan Light & Power Inc, Philippines
- India Bulls Power Limited - India
- Bukit Baiduri Energy - Indonesia
- Vedanta Resources Plc - India
- Heidelberg Cement - Germany
- Sindya Power Generating Company Private Ltd
- Videocon Industries ltd - India
- Sinarmas Energy and Mining - Indonesia
- Indian Oil Corporation Limited
- Posco Energy - South Korea
- The University of Queensland
- Holcim Trading Pte Ltd - Singapore
- Lanco Infratech Ltd - India
- Larsen & Toubro Limited - India
- Madhucon Powers Ltd - India
- Maharashtra Electricity Regulatory Commission - India
- ASAPP Information Group - India
- Aditya Birla Group - India
- Jorong Barutama Greston.PT - Indonesia
- Eastern Energy - Thailand
- Ambuja Cements Ltd - India
- Minerals Council of Australia
- OPG Power Generation Pvt Ltd - India
- GN Power Mariveles Coal Plant, Philippines
- Manunggal Multi Energi - Indonesia
- Meralco Power Generation, Philippines
- Intertek Mineral Services - Indonesia
- IHS Mccloskey Coal Group - USA
- Standard Chartered Bank - UAE
- Billiton Holdings Pty Ltd - Australia
- Pipit Mutiara Jaya. PT, Indonesia
- Alfred C Toepfer International GmbH - Germany
- Krishnapatnam Port Company Ltd. - India
- Kumho Petrochemical, South Korea
- Gujarat Sidhee Cement - India
- International Coal Ventures Pvt Ltd - India
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Siam City Cement PLC, Thailand
- Offshore Bulk Terminal Pte Ltd, Singapore
- Ministry of Transport, Egypt
- PNOC Exploration Corporation - Philippines
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