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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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Monday, 12 September 22
COAL PRICE HIKE REMAINS DIFFICULT FOR CIL: CHAIRMAN TELLS ANALYSTS - PTI
Coal India on Thursday informed investors that increasing coal prices remains difficult in the current context when the economy is grappling with h ...
Friday, 09 September 22
GREECE WILL KEEP COAL-FIRED PLANTS RUNNING FOR LONGER AMID GAS CRISIS - REUTERS
Greece will keep seven coal-fired plants running for longer than previously planned as European countries adjust to a cut in gas flows coming from ...
Friday, 09 September 22
CHINA'S DROUGHT INTENSIFIES GLOBAL COAL SHORTAGE - REUTERS
China’s drought has sent coal prices surging as traders anticipate the lack of hydroelectric generation will force it to burn more coal to me ...
Thursday, 08 September 22
MOODY.S AFFIRMS ABM INVESTAMA'S B1 RATINGS FOLLOWING PLANNED MINORITY INVESTMENT IN COAL MINER; OUTLOOK STABLE
Moody's Investors Service has affirmed ABM Investama Tbk (P.T.)'s B1 corporate family rating (CFR), along with the B1 rating on its senior ...
Thursday, 08 September 22
MARKET INSIGHT - INTERMODAL
While the energy markets are historically stretched, Russian flows of crude oil are closely monitored as the oil trade is ultimately realigned. Mor ...
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- Tata Chemicals Ltd - India
- Orica Australia Pty. Ltd.
- TNB Fuel Sdn Bhd - Malaysia
- Sojitz Corporation - Japan
- Petron Corporation, Philippines
- Kobexindo Tractors - Indoneisa
- Economic Council, Georgia
- Alfred C Toepfer International GmbH - Germany
- SMG Consultants - Indonesia
- LBH Netherlands Bv - Netherlands
- Minerals Council of Australia
- Indika Energy - Indonesia
- Power Finance Corporation Ltd., India
- Grasim Industreis Ltd - India
- Thiess Contractors Indonesia
- Romanian Commodities Exchange
- PTC India Limited - India
- Pendopo Energi Batubara - Indonesia
- Sakthi Sugars Limited - India
- Asmin Koalindo Tuhup - Indonesia
- Formosa Plastics Group - Taiwan
- Commonwealth Bank - Australia
- Africa Commodities Group - South Africa
- Agrawal Coal Company - India
- Trasteel International SA, Italy
- Eastern Energy - Thailand
- Energy Development Corp, Philippines
- Savvy Resources Ltd - HongKong
- Directorate Of Revenue Intelligence - India
- Dalmia Cement Bharat India
- SN Aboitiz Power Inc, Philippines
- Aditya Birla Group - India
- Rio Tinto Coal - Australia
- The University of Queensland
- Mjunction Services Limited - India
- Heidelberg Cement - Germany
- Uttam Galva Steels Limited - India
- TeaM Sual Corporation - Philippines
- Bharathi Cement Corporation - India
- Toyota Tsusho Corporation, Japan
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- IEA Clean Coal Centre - UK
- Leighton Contractors Pty Ltd - Australia
- McConnell Dowell - Australia
- ICICI Bank Limited - India
- Kohat Cement Company Ltd. - Pakistan
- Maharashtra Electricity Regulatory Commission - India
- Siam City Cement PLC, Thailand
- Antam Resourcindo - Indonesia
- OPG Power Generation Pvt Ltd - India
- Ambuja Cements Ltd - India
- Marubeni Corporation - India
- Posco Energy - South Korea
- Renaissance Capital - South Africa
- Kalimantan Lumbung Energi - Indonesia
- Parry Sugars Refinery, India
- Bulk Trading Sa - Switzerland
- Sarangani Energy Corporation, Philippines
- International Coal Ventures Pvt Ltd - India
- Sinarmas Energy and Mining - Indonesia
- Meralco Power Generation, Philippines
- Thai Mozambique Logistica
- PetroVietnam Power Coal Import and Supply Company
- Gujarat Sidhee Cement - India
- Merrill Lynch Commodities Europe
- Holcim Trading Pte Ltd - Singapore
- The State Trading Corporation of India Ltd
- Electricity Authority, New Zealand
- Rashtriya Ispat Nigam Limited - India
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Straits Asia Resources Limited - Singapore
- Chamber of Mines of South Africa
- Bhushan Steel Limited - India
- Wilmar Investment Holdings
- Borneo Indobara - Indonesia
- Interocean Group of Companies - India
- Indian Oil Corporation Limited
- Larsen & Toubro Limited - India
- AsiaOL BioFuels Corp., Philippines
- Krishnapatnam Port Company Ltd. - India
- Independent Power Producers Association of India
- Simpson Spence & Young - Indonesia
- Gujarat Electricity Regulatory Commission - India
- Vizag Seaport Private Limited - India
- Maheswari Brothers Coal Limited - India
- Singapore Mercantile Exchange
- Jindal Steel & Power Ltd - India
- Cement Manufacturers Association - India
- Ministry of Transport, Egypt
- Bayan Resources Tbk. - Indonesia
- Essar Steel Hazira Ltd - India
- Bukit Baiduri Energy - Indonesia
- Petrochimia International Co. Ltd.- Taiwan
- Cigading International Bulk Terminal - Indonesia
- Timah Investasi Mineral - Indoneisa
- GVK Power & Infra Limited - India
- Central Electricity Authority - India
- Medco Energi Mining Internasional
- Sindya Power Generating Company Private Ltd
- Mercator Lines Limited - India
- Bhoruka Overseas - Indonesia
- Ceylon Electricity Board - Sri Lanka
- Madhucon Powers Ltd - India
- South Luzon Thermal Energy Corporation
- Goldman Sachs - Singapore
- Chettinad Cement Corporation Ltd - India
- Pipit Mutiara Jaya. PT, Indonesia
- Neyveli Lignite Corporation Ltd, - India
- Ind-Barath Power Infra Limited - India
- Banpu Public Company Limited - Thailand
- GAC Shipping (India) Pvt Ltd
- Electricity Generating Authority of Thailand
- Ministry of Mines - Canada
- CNBM International Corporation - China
- Ministry of Finance - Indonesia
- Billiton Holdings Pty Ltd - Australia
- Global Green Power PLC Corporation, Philippines
- Riau Bara Harum - Indonesia
- Makarim & Taira - Indonesia
- Indian Energy Exchange, India
- Deloitte Consulting - India
- Siam City Cement - Thailand
- Orica Mining Services - Indonesia
- Eastern Coal Council - USA
- Salva Resources Pvt Ltd - India
- Bangladesh Power Developement Board
- Miang Besar Coal Terminal - Indonesia
- Parliament of New Zealand
- Port Waratah Coal Services - Australia
- Barasentosa Lestari - Indonesia
- Australian Commodity Traders Exchange
- Global Business Power Corporation, Philippines
- GMR Energy Limited - India
- Indogreen Group - Indonesia
- Meenaskhi Energy Private Limited - India
- Sical Logistics Limited - India
- Sree Jayajothi Cements Limited - India
- Iligan Light & Power Inc, Philippines
- Videocon Industries ltd - India
- Kartika Selabumi Mining - Indonesia
- Binh Thuan Hamico - Vietnam
- Coal and Oil Company - UAE
- Oldendorff Carriers - Singapore
- Baramulti Group, Indonesia
- Malabar Cements Ltd - India
- VISA Power Limited - India
- Mintek Dendrill Indonesia
- Bukit Asam (Persero) Tbk - Indonesia
- Aboitiz Power Corporation - Philippines
- Bahari Cakrawala Sebuku - Indonesia
- Anglo American - United Kingdom
- India Bulls Power Limited - India
- Asia Pacific Energy Resources Ventures Inc, Philippines
- MS Steel International - UAE
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Samtan Co., Ltd - South Korea
- The Treasury - Australian Government
- Karbindo Abesyapradhi - Indoneisa
- Metalloyd Limited - United Kingdom
- Kapuas Tunggal Persada - Indonesia
- Directorate General of MIneral and Coal - Indonesia
- PowerSource Philippines DevCo
- Semirara Mining Corp, Philippines
- London Commodity Brokers - England
- Coastal Gujarat Power Limited - India
- CIMB Investment Bank - Malaysia
- Kepco SPC Power Corporation, Philippines
- Planning Commission, India
- Kideco Jaya Agung - Indonesia
- Attock Cement Pakistan Limited
- ASAPP Information Group - India
- Vijayanagar Sugar Pvt Ltd - India
- Xindia Steels Limited - India
- European Bulk Services B.V. - Netherlands
- Jorong Barutama Greston.PT - Indonesia
- Latin American Coal - Colombia
- Vedanta Resources Plc - India
- Edison Trading Spa - Italy
- SMC Global Power, Philippines
- Bukit Makmur.PT - Indonesia
- Energy Link Ltd, New Zealand
- Altura Mining Limited, Indonesia
- Carbofer General Trading SA - India
- Star Paper Mills Limited - India
- Central Java Power - Indonesia
- Globalindo Alam Lestari - Indonesia
- Coalindo Energy - Indonesia
- Kaltim Prima Coal - Indonesia
- San Jose City I Power Corp, Philippines
- Bank of Tokyo Mitsubishi UFJ Ltd
- GN Power Mariveles Coal Plant, Philippines
- Kumho Petrochemical, South Korea
- Georgia Ports Authority, United States
- Manunggal Multi Energi - Indonesia
- Gujarat Mineral Development Corp Ltd - India
- Offshore Bulk Terminal Pte Ltd, Singapore
- Lanco Infratech Ltd - India
- Intertek Mineral Services - Indonesia
- Mercuria Energy - Indonesia
- Wood Mackenzie - Singapore
- New Zealand Coal & Carbon
- Indo Tambangraya Megah - Indonesia
- IHS Mccloskey Coal Group - USA
- Price Waterhouse Coopers - Russia
- Karaikal Port Pvt Ltd - India
- Australian Coal Association
- Indonesian Coal Mining Association
- Standard Chartered Bank - UAE
- Tamil Nadu electricity Board
- White Energy Company Limited
- Jaiprakash Power Ventures ltd
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Global Coal Blending Company Limited - Australia
- Semirara Mining and Power Corporation, Philippines
- PNOC Exploration Corporation - Philippines
- Bhatia International Limited - India
- Therma Luzon, Inc, Philippines
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