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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, 16 September 22
WHEN IS A VESSEL'S INCOME EARNING CAPACITY AT RISK? 'CONTROLLED INCOME CAN BE A KEY OF SUCCESS' - MARASCO MARINE
Managing marine risks is not an easy task, which requires special knowledge and expertise on the subject per se. Customarily, big ship management c ...
Friday, 16 September 22
DRY BULK MARKET: EU’S BAN ON RUSSIAN COAL LIFTS DEMAND DESPITE ECONOMIC HEADWINDS - BIMCO
Highlights
– The Baltic Exchange Dry Index (BDI) peaked in late May and has since fallen sharply as lower Chinese demand and adverse glob ...
Friday, 16 September 22
BIMCO EMBARKS ON NEW STANDARD FOR “QUIET ENJOYMENT”
KNOWLEDGE TO ELEVATE
A newly set-up BIMCO drafting team involving a cross-section of shipowners, charterers, financing and leasing i ...
Friday, 16 September 22
INDIAN COAL PRODUCTION TO RISE 150 PER CENT IN 10 YEARS: CENTRE - EXPRESS NEWS SERVICE
The Union Ministry of Mines is expecting 150 per cent growth in coal production 10 years down the line as a result of coal reforms that had been us ...
Thursday, 15 September 22
MARKET INSIGHT - INTERMODAL
While the Organization of Petroleum Exporting Countries and its allies agreed on a 100,000 b/d output cut last week, oil flows are in the spotlight ...
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- New Zealand Coal & Carbon
- Vijayanagar Sugar Pvt Ltd - India
- AsiaOL BioFuels Corp., Philippines
- Gujarat Electricity Regulatory Commission - India
- Indika Energy - Indonesia
- Larsen & Toubro Limited - India
- PNOC Exploration Corporation - Philippines
- Coalindo Energy - Indonesia
- Lanco Infratech Ltd - India
- Posco Energy - South Korea
- Pendopo Energi Batubara - Indonesia
- San Jose City I Power Corp, Philippines
- Directorate Of Revenue Intelligence - India
- Metalloyd Limited - United Kingdom
- CIMB Investment Bank - Malaysia
- Therma Luzon, Inc, Philippines
- Coastal Gujarat Power Limited - India
- Dalmia Cement Bharat India
- Parliament of New Zealand
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Global Green Power PLC Corporation, Philippines
- Meenaskhi Energy Private Limited - India
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Latin American Coal - Colombia
- Australian Coal Association
- Toyota Tsusho Corporation, Japan
- Bangladesh Power Developement Board
- The University of Queensland
- Binh Thuan Hamico - Vietnam
- Sakthi Sugars Limited - India
- Meralco Power Generation, Philippines
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Standard Chartered Bank - UAE
- Borneo Indobara - Indonesia
- Ind-Barath Power Infra Limited - India
- Krishnapatnam Port Company Ltd. - India
- Indogreen Group - Indonesia
- GMR Energy Limited - India
- Trasteel International SA, Italy
- Ministry of Finance - Indonesia
- Planning Commission, India
- Asmin Koalindo Tuhup - Indonesia
- Savvy Resources Ltd - HongKong
- Cigading International Bulk Terminal - Indonesia
- Electricity Generating Authority of Thailand
- Banpu Public Company Limited - Thailand
- White Energy Company Limited
- Baramulti Group, Indonesia
- Holcim Trading Pte Ltd - Singapore
- PowerSource Philippines DevCo
- Rashtriya Ispat Nigam Limited - India
- Bahari Cakrawala Sebuku - Indonesia
- Sindya Power Generating Company Private Ltd
- Iligan Light & Power Inc, Philippines
- Singapore Mercantile Exchange
- Mintek Dendrill Indonesia
- Videocon Industries ltd - India
- Romanian Commodities Exchange
- Kideco Jaya Agung - Indonesia
- Vedanta Resources Plc - India
- Jindal Steel & Power Ltd - India
- Petron Corporation, Philippines
- Barasentosa Lestari - Indonesia
- Port Waratah Coal Services - Australia
- OPG Power Generation Pvt Ltd - India
- Tata Chemicals Ltd - India
- Grasim Industreis Ltd - India
- Gujarat Mineral Development Corp Ltd - India
- Heidelberg Cement - Germany
- Mercuria Energy - Indonesia
- Sinarmas Energy and Mining - Indonesia
- Central Electricity Authority - India
- CNBM International Corporation - China
- Eastern Coal Council - USA
- Madhucon Powers Ltd - India
- Aditya Birla Group - India
- European Bulk Services B.V. - Netherlands
- Georgia Ports Authority, United States
- Altura Mining Limited, Indonesia
- Formosa Plastics Group - Taiwan
- South Luzon Thermal Energy Corporation
- TNB Fuel Sdn Bhd - Malaysia
- Electricity Authority, New Zealand
- Miang Besar Coal Terminal - Indonesia
- TeaM Sual Corporation - Philippines
- Ambuja Cements Ltd - India
- Neyveli Lignite Corporation Ltd, - India
- Africa Commodities Group - South Africa
- Energy Link Ltd, New Zealand
- Straits Asia Resources Limited - Singapore
- Offshore Bulk Terminal Pte Ltd, Singapore
- Bhushan Steel Limited - India
- Renaissance Capital - South Africa
- Mjunction Services Limited - India
- Siam City Cement - Thailand
- Indo Tambangraya Megah - Indonesia
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Thai Mozambique Logistica
- Ministry of Transport, Egypt
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Xindia Steels Limited - India
- Bukit Makmur.PT - Indonesia
- Antam Resourcindo - Indonesia
- SMG Consultants - Indonesia
- VISA Power Limited - India
- Deloitte Consulting - India
- Karbindo Abesyapradhi - Indoneisa
- Bhoruka Overseas - Indonesia
- Rio Tinto Coal - Australia
- Global Coal Blending Company Limited - Australia
- Vizag Seaport Private Limited - India
- PetroVietnam Power Coal Import and Supply Company
- Price Waterhouse Coopers - Russia
- Salva Resources Pvt Ltd - India
- Jaiprakash Power Ventures ltd
- SN Aboitiz Power Inc, Philippines
- Kalimantan Lumbung Energi - Indonesia
- Kepco SPC Power Corporation, Philippines
- Aboitiz Power Corporation - Philippines
- London Commodity Brokers - England
- Oldendorff Carriers - Singapore
- Star Paper Mills Limited - India
- Jorong Barutama Greston.PT - Indonesia
- Indian Energy Exchange, India
- Bulk Trading Sa - Switzerland
- Essar Steel Hazira Ltd - India
- Power Finance Corporation Ltd., India
- Makarim & Taira - Indonesia
- Indian Oil Corporation Limited
- Alfred C Toepfer International GmbH - Germany
- Manunggal Multi Energi - Indonesia
- Thiess Contractors Indonesia
- Mercator Lines Limited - India
- Kartika Selabumi Mining - Indonesia
- Sical Logistics Limited - India
- IHS Mccloskey Coal Group - USA
- Kumho Petrochemical, South Korea
- Globalindo Alam Lestari - Indonesia
- Pipit Mutiara Jaya. PT, Indonesia
- Malabar Cements Ltd - India
- Semirara Mining Corp, Philippines
- International Coal Ventures Pvt Ltd - India
- Edison Trading Spa - Italy
- Bukit Baiduri Energy - Indonesia
- Coal and Oil Company - UAE
- McConnell Dowell - Australia
- Sojitz Corporation - Japan
- Kapuas Tunggal Persada - Indonesia
- Cement Manufacturers Association - India
- Bank of Tokyo Mitsubishi UFJ Ltd
- Ministry of Mines - Canada
- Wilmar Investment Holdings
- Gujarat Sidhee Cement - India
- Samtan Co., Ltd - South Korea
- The Treasury - Australian Government
- Semirara Mining and Power Corporation, Philippines
- Kobexindo Tractors - Indoneisa
- Uttam Galva Steels Limited - India
- Wood Mackenzie - Singapore
- Ceylon Electricity Board - Sri Lanka
- PTC India Limited - India
- Riau Bara Harum - Indonesia
- Sree Jayajothi Cements Limited - India
- The State Trading Corporation of India Ltd
- Maheswari Brothers Coal Limited - India
- Kohat Cement Company Ltd. - Pakistan
- Minerals Council of Australia
- Goldman Sachs - Singapore
- Parry Sugars Refinery, India
- IEA Clean Coal Centre - UK
- Sarangani Energy Corporation, Philippines
- GVK Power & Infra Limited - India
- GAC Shipping (India) Pvt Ltd
- Chamber of Mines of South Africa
- Anglo American - United Kingdom
- ICICI Bank Limited - India
- Bharathi Cement Corporation - India
- Billiton Holdings Pty Ltd - Australia
- Orica Mining Services - Indonesia
- Timah Investasi Mineral - Indoneisa
- India Bulls Power Limited - India
- SMC Global Power, Philippines
- MS Steel International - UAE
- Carbofer General Trading SA - India
- Kaltim Prima Coal - Indonesia
- Simpson Spence & Young - Indonesia
- Economic Council, Georgia
- Energy Development Corp, Philippines
- Merrill Lynch Commodities Europe
- Leighton Contractors Pty Ltd - Australia
- Attock Cement Pakistan Limited
- Central Java Power - Indonesia
- Interocean Group of Companies - India
- Directorate General of MIneral and Coal - Indonesia
- Karaikal Port Pvt Ltd - India
- Agrawal Coal Company - India
- Tamil Nadu electricity Board
- Indonesian Coal Mining Association
- Orica Australia Pty. Ltd.
- Bayan Resources Tbk. - Indonesia
- Global Business Power Corporation, Philippines
- Petrochimia International Co. Ltd.- Taiwan
- Maharashtra Electricity Regulatory Commission - India
- Medco Energi Mining Internasional
- Independent Power Producers Association of India
- ASAPP Information Group - India
- Bukit Asam (Persero) Tbk - Indonesia
- Siam City Cement PLC, Thailand
- Marubeni Corporation - India
- Eastern Energy - Thailand
- Chettinad Cement Corporation Ltd - India
- GN Power Mariveles Coal Plant, Philippines
- Commonwealth Bank - Australia
- Intertek Mineral Services - Indonesia
- LBH Netherlands Bv - Netherlands
- Australian Commodity Traders Exchange
- Bhatia International Limited - India
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