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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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Tuesday, 20 September 22
CHINA COAL OUTPUT UP 8.1 PCT IN AUGUST - XINHUA
China’s raw coal output posted stable expansion in August, official data showed.
The country produced 370 million tonnes of ra ...
Monday, 19 September 22
BUMA AUSTRALIA AWARDED A$400 MILLION CONTRACT EXTENSION BY BMA FOR GOONYELLA PROJECT
Press Release – PT Delta Dunia Makmur Tbk. (the "Company") announced that its subsidiary, PT Bukit Makmur Mandiri Utama ("BUMA ...
Saturday, 17 September 22
CHINA WARNS COAL COMPANIES AGAINST DUAL CONTRACTS, KEEP PRICES STABLE - REUTERS
China’s state economic planner warned coal companies operating at ports in the Bohai Bay region to comply with their long-term contracts to k ...
Saturday, 17 September 22
IS A GLOBAL RECESSION IMMINENT? - WORLD BANK
Since the beginning of the year, a rapid deterioration of growth prospects coupled with rising inflation and tightening financing conditions, has i ...
Saturday, 17 September 22
FITCH RATINGS REVISES GLOBAL METALS & MINING PRICE ASSUMPTIONS
Fitch Ratings has revised its metals and mining price assumptions reflecting evolving economic growth expectations and demand and supply dynamics.
...
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- Vizag Seaport Private Limited - India
- Goldman Sachs - Singapore
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Sakthi Sugars Limited - India
- Kumho Petrochemical, South Korea
- TeaM Sual Corporation - Philippines
- SMG Consultants - Indonesia
- Ministry of Finance - Indonesia
- Global Coal Blending Company Limited - Australia
- Intertek Mineral Services - Indonesia
- LBH Netherlands Bv - Netherlands
- Maheswari Brothers Coal Limited - India
- GMR Energy Limited - India
- Timah Investasi Mineral - Indoneisa
- Coal and Oil Company - UAE
- Standard Chartered Bank - UAE
- Global Business Power Corporation, Philippines
- Mjunction Services Limited - India
- Miang Besar Coal Terminal - Indonesia
- Therma Luzon, Inc, Philippines
- Globalindo Alam Lestari - Indonesia
- Cement Manufacturers Association - India
- Kartika Selabumi Mining - Indonesia
- Bharathi Cement Corporation - India
- Tamil Nadu electricity Board
- Kobexindo Tractors - Indoneisa
- Lanco Infratech Ltd - India
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Tata Chemicals Ltd - India
- GN Power Mariveles Coal Plant, Philippines
- Rashtriya Ispat Nigam Limited - India
- Ministry of Mines - Canada
- Malabar Cements Ltd - India
- Thiess Contractors Indonesia
- Simpson Spence & Young - Indonesia
- PTC India Limited - India
- Aboitiz Power Corporation - Philippines
- CNBM International Corporation - China
- Coalindo Energy - Indonesia
- Bangladesh Power Developement Board
- Kohat Cement Company Ltd. - Pakistan
- Jindal Steel & Power Ltd - India
- Minerals Council of Australia
- European Bulk Services B.V. - Netherlands
- The State Trading Corporation of India Ltd
- Africa Commodities Group - South Africa
- Indogreen Group - Indonesia
- Central Java Power - Indonesia
- Global Green Power PLC Corporation, Philippines
- Kepco SPC Power Corporation, Philippines
- Meenaskhi Energy Private Limited - India
- Larsen & Toubro Limited - India
- Kalimantan Lumbung Energi - Indonesia
- Indian Energy Exchange, India
- Baramulti Group, Indonesia
- India Bulls Power Limited - India
- Mintek Dendrill Indonesia
- IEA Clean Coal Centre - UK
- Semirara Mining Corp, Philippines
- Metalloyd Limited - United Kingdom
- Directorate Of Revenue Intelligence - India
- Heidelberg Cement - Germany
- Mercuria Energy - Indonesia
- Attock Cement Pakistan Limited
- CIMB Investment Bank - Malaysia
- PNOC Exploration Corporation - Philippines
- Chettinad Cement Corporation Ltd - India
- Sinarmas Energy and Mining - Indonesia
- Medco Energi Mining Internasional
- MS Steel International - UAE
- Xindia Steels Limited - India
- Coastal Gujarat Power Limited - India
- Bulk Trading Sa - Switzerland
- Jorong Barutama Greston.PT - Indonesia
- Holcim Trading Pte Ltd - Singapore
- GAC Shipping (India) Pvt Ltd
- Star Paper Mills Limited - India
- Economic Council, Georgia
- Eastern Coal Council - USA
- Sindya Power Generating Company Private Ltd
- ICICI Bank Limited - India
- Manunggal Multi Energi - Indonesia
- Leighton Contractors Pty Ltd - Australia
- PetroVietnam Power Coal Import and Supply Company
- Singapore Mercantile Exchange
- Barasentosa Lestari - Indonesia
- Bayan Resources Tbk. - Indonesia
- White Energy Company Limited
- Ceylon Electricity Board - Sri Lanka
- Chamber of Mines of South Africa
- Makarim & Taira - Indonesia
- OPG Power Generation Pvt Ltd - India
- Meralco Power Generation, Philippines
- Agrawal Coal Company - India
- Indika Energy - Indonesia
- Rio Tinto Coal - Australia
- Independent Power Producers Association of India
- Siam City Cement - Thailand
- Riau Bara Harum - Indonesia
- Siam City Cement PLC, Thailand
- Romanian Commodities Exchange
- Energy Link Ltd, New Zealand
- Bank of Tokyo Mitsubishi UFJ Ltd
- Indo Tambangraya Megah - Indonesia
- Wood Mackenzie - Singapore
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Australian Coal Association
- San Jose City I Power Corp, Philippines
- Parry Sugars Refinery, India
- Krishnapatnam Port Company Ltd. - India
- Australian Commodity Traders Exchange
- Kideco Jaya Agung - Indonesia
- Jaiprakash Power Ventures ltd
- New Zealand Coal & Carbon
- Edison Trading Spa - Italy
- Toyota Tsusho Corporation, Japan
- Eastern Energy - Thailand
- Port Waratah Coal Services - Australia
- Directorate General of MIneral and Coal - Indonesia
- Energy Development Corp, Philippines
- Indonesian Coal Mining Association
- Aditya Birla Group - India
- Ministry of Transport, Egypt
- AsiaOL BioFuels Corp., Philippines
- McConnell Dowell - Australia
- Iligan Light & Power Inc, Philippines
- Bhushan Steel Limited - India
- Ind-Barath Power Infra Limited - India
- Uttam Galva Steels Limited - India
- Georgia Ports Authority, United States
- Karaikal Port Pvt Ltd - India
- Merrill Lynch Commodities Europe
- GVK Power & Infra Limited - India
- Orica Mining Services - Indonesia
- Sojitz Corporation - Japan
- Ambuja Cements Ltd - India
- Bukit Asam (Persero) Tbk - Indonesia
- VISA Power Limited - India
- Bukit Baiduri Energy - Indonesia
- Power Finance Corporation Ltd., India
- Cigading International Bulk Terminal - Indonesia
- Mercator Lines Limited - India
- Pipit Mutiara Jaya. PT, Indonesia
- Essar Steel Hazira Ltd - India
- Samtan Co., Ltd - South Korea
- Petrochimia International Co. Ltd.- Taiwan
- Asmin Koalindo Tuhup - Indonesia
- Bahari Cakrawala Sebuku - Indonesia
- Parliament of New Zealand
- Vedanta Resources Plc - India
- Kaltim Prima Coal - Indonesia
- Gujarat Mineral Development Corp Ltd - India
- SMC Global Power, Philippines
- Alfred C Toepfer International GmbH - Germany
- Salva Resources Pvt Ltd - India
- Sarangani Energy Corporation, Philippines
- Orica Australia Pty. Ltd.
- Gujarat Sidhee Cement - India
- Semirara Mining and Power Corporation, Philippines
- Posco Energy - South Korea
- Wilmar Investment Holdings
- Kapuas Tunggal Persada - Indonesia
- Videocon Industries ltd - India
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Dalmia Cement Bharat India
- Price Waterhouse Coopers - Russia
- Electricity Authority, New Zealand
- Interocean Group of Companies - India
- Carbofer General Trading SA - India
- TNB Fuel Sdn Bhd - Malaysia
- Gujarat Electricity Regulatory Commission - India
- Karbindo Abesyapradhi - Indoneisa
- Bhoruka Overseas - Indonesia
- Bhatia International Limited - India
- Maharashtra Electricity Regulatory Commission - India
- Straits Asia Resources Limited - Singapore
- Thai Mozambique Logistica
- Altura Mining Limited, Indonesia
- SN Aboitiz Power Inc, Philippines
- Commonwealth Bank - Australia
- Petron Corporation, Philippines
- Electricity Generating Authority of Thailand
- Trasteel International SA, Italy
- Oldendorff Carriers - Singapore
- ASAPP Information Group - India
- Antam Resourcindo - Indonesia
- Formosa Plastics Group - Taiwan
- Savvy Resources Ltd - HongKong
- Indian Oil Corporation Limited
- Pendopo Energi Batubara - Indonesia
- Borneo Indobara - Indonesia
- IHS Mccloskey Coal Group - USA
- International Coal Ventures Pvt Ltd - India
- Binh Thuan Hamico - Vietnam
- Bukit Makmur.PT - Indonesia
- Sree Jayajothi Cements Limited - India
- Deloitte Consulting - India
- Banpu Public Company Limited - Thailand
- PowerSource Philippines DevCo
- Sical Logistics Limited - India
- Neyveli Lignite Corporation Ltd, - India
- Grasim Industreis Ltd - India
- Offshore Bulk Terminal Pte Ltd, Singapore
- The Treasury - Australian Government
- Billiton Holdings Pty Ltd - Australia
- Vijayanagar Sugar Pvt Ltd - India
- Madhucon Powers Ltd - India
- The University of Queensland
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- London Commodity Brokers - England
- Central Electricity Authority - India
- South Luzon Thermal Energy Corporation
- Marubeni Corporation - India
- Latin American Coal - Colombia
- Anglo American - United Kingdom
- Planning Commission, India
- Renaissance Capital - South Africa
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