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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, 23 August 22
SHIPPING INDUSTRY TO REMOVE THE INDIAN OCEAN HIGH RISK AREA - BIMCO
After more than a decade of effective threat-reducing counter-piracy operations the shipping industry has removed the ‘Indian Ocean High Risk ...
Tuesday, 23 August 22
SHIPPING: GLOBAL TAX REFORM - WATSON FARLEY & WILLIAMS
OECD rules designed to implement a global minimum corporate tax rate for very large multinational groups have now been published and are expected t ...
Tuesday, 23 August 22
PARTIES CONCLUDE JOINT R&D AGREEMENT FOR WORLD’S FIRST AMMONIA FLOATING STORAGE AND REGASIFICATION BARGE CONTRIBUTING TO PROMOTING THE EARLY INTRODUCTION OF AMMONIA FUEL - NYK
NYK Line, Nihon Shipyard Co., Ltd. (NSY), ClassNK, and IHI Corporation (IHI) signed a joint research and development agreement for the commercializ ...
Monday, 22 August 22
INDONESIAN GOVERNMENT IMPOSED ON NEW PROGRESSIVE ROYALTIES FOR COAL
Indonesian President Joko Widodo has signed a Government Regulation (Number 26 of 2022) on 15 August 2022 related to the progressive royalty rates ...
Monday, 22 August 22
CHINA'S JULY RUSSIAN COAL IMPORTS HIT 5-YR HIGH AS WEST SHUNS MOSCOW - REUTERS
China’s coal imports from Russia jumped 14% in July from a year earlier to their highest in at least five years, as China bought discounted c ...
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- Orica Mining Services - Indonesia
- Lanco Infratech Ltd - India
- Latin American Coal - Colombia
- Central Electricity Authority - India
- Dalmia Cement Bharat India
- Indika Energy - Indonesia
- Semirara Mining Corp, Philippines
- Grasim Industreis Ltd - India
- Indo Tambangraya Megah - Indonesia
- India Bulls Power Limited - India
- Karaikal Port Pvt Ltd - India
- Petrochimia International Co. Ltd.- Taiwan
- Pendopo Energi Batubara - Indonesia
- VISA Power Limited - India
- ASAPP Information Group - India
- SMG Consultants - Indonesia
- Rashtriya Ispat Nigam Limited - India
- Price Waterhouse Coopers - Russia
- Chettinad Cement Corporation Ltd - India
- Thiess Contractors Indonesia
- Carbofer General Trading SA - India
- Bukit Asam (Persero) Tbk - Indonesia
- Ministry of Transport, Egypt
- Metalloyd Limited - United Kingdom
- Kartika Selabumi Mining - Indonesia
- Globalindo Alam Lestari - Indonesia
- Sical Logistics Limited - India
- Eastern Energy - Thailand
- Tata Chemicals Ltd - India
- Coal and Oil Company - UAE
- Makarim & Taira - Indonesia
- Indogreen Group - Indonesia
- Straits Asia Resources Limited - Singapore
- Star Paper Mills Limited - India
- TNB Fuel Sdn Bhd - Malaysia
- Kobexindo Tractors - Indoneisa
- GAC Shipping (India) Pvt Ltd
- CNBM International Corporation - China
- Gujarat Sidhee Cement - India
- Ind-Barath Power Infra Limited - India
- The University of Queensland
- Standard Chartered Bank - UAE
- Parry Sugars Refinery, India
- GVK Power & Infra Limited - India
- Orica Australia Pty. Ltd.
- Jindal Steel & Power Ltd - India
- Bhatia International Limited - India
- The Treasury - Australian Government
- Directorate General of MIneral and Coal - Indonesia
- GMR Energy Limited - India
- Sinarmas Energy and Mining - Indonesia
- Bukit Makmur.PT - Indonesia
- Videocon Industries ltd - India
- Singapore Mercantile Exchange
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Gujarat Mineral Development Corp Ltd - India
- Larsen & Toubro Limited - India
- Mercuria Energy - Indonesia
- Mercator Lines Limited - India
- Georgia Ports Authority, United States
- Coalindo Energy - Indonesia
- Planning Commission, India
- Mjunction Services Limited - India
- Electricity Generating Authority of Thailand
- Sojitz Corporation - Japan
- Edison Trading Spa - Italy
- PetroVietnam Power Coal Import and Supply Company
- LBH Netherlands Bv - Netherlands
- Rio Tinto Coal - Australia
- IHS Mccloskey Coal Group - USA
- Banpu Public Company Limited - Thailand
- Ministry of Finance - Indonesia
- Petron Corporation, Philippines
- Barasentosa Lestari - Indonesia
- Essar Steel Hazira Ltd - India
- Indonesian Coal Mining Association
- San Jose City I Power Corp, Philippines
- CIMB Investment Bank - Malaysia
- International Coal Ventures Pvt Ltd - India
- Agrawal Coal Company - India
- Kideco Jaya Agung - Indonesia
- Cement Manufacturers Association - India
- Jorong Barutama Greston.PT - Indonesia
- Ministry of Mines - Canada
- Bukit Baiduri Energy - Indonesia
- Maheswari Brothers Coal Limited - India
- Ambuja Cements Ltd - India
- Therma Luzon, Inc, Philippines
- Samtan Co., Ltd - South Korea
- Alfred C Toepfer International GmbH - Germany
- Bhushan Steel Limited - India
- Ceylon Electricity Board - Sri Lanka
- Bhoruka Overseas - Indonesia
- McConnell Dowell - Australia
- Meenaskhi Energy Private Limited - India
- Directorate Of Revenue Intelligence - India
- Xindia Steels Limited - India
- Sakthi Sugars Limited - India
- New Zealand Coal & Carbon
- Binh Thuan Hamico - Vietnam
- Karbindo Abesyapradhi - Indoneisa
- Global Coal Blending Company Limited - Australia
- MS Steel International - UAE
- Romanian Commodities Exchange
- SN Aboitiz Power Inc, Philippines
- Thai Mozambique Logistica
- Australian Commodity Traders Exchange
- Africa Commodities Group - South Africa
- Timah Investasi Mineral - Indoneisa
- Uttam Galva Steels Limited - India
- Iligan Light & Power Inc, Philippines
- Formosa Plastics Group - Taiwan
- Heidelberg Cement - Germany
- Parliament of New Zealand
- Kohat Cement Company Ltd. - Pakistan
- Australian Coal Association
- Cigading International Bulk Terminal - Indonesia
- Vizag Seaport Private Limited - India
- Merrill Lynch Commodities Europe
- Gujarat Electricity Regulatory Commission - India
- Salva Resources Pvt Ltd - India
- Savvy Resources Ltd - HongKong
- London Commodity Brokers - England
- Malabar Cements Ltd - India
- PTC India Limited - India
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Pipit Mutiara Jaya. PT, Indonesia
- Energy Development Corp, Philippines
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Bangladesh Power Developement Board
- Altura Mining Limited, Indonesia
- Wilmar Investment Holdings
- Bharathi Cement Corporation - India
- European Bulk Services B.V. - Netherlands
- Holcim Trading Pte Ltd - Singapore
- Billiton Holdings Pty Ltd - Australia
- Kapuas Tunggal Persada - Indonesia
- Manunggal Multi Energi - Indonesia
- Independent Power Producers Association of India
- Vijayanagar Sugar Pvt Ltd - India
- Siam City Cement PLC, Thailand
- Posco Energy - South Korea
- Siam City Cement - Thailand
- Chamber of Mines of South Africa
- Kaltim Prima Coal - Indonesia
- Economic Council, Georgia
- Asmin Koalindo Tuhup - Indonesia
- Renaissance Capital - South Africa
- Wood Mackenzie - Singapore
- Bulk Trading Sa - Switzerland
- Central Java Power - Indonesia
- Borneo Indobara - Indonesia
- Aditya Birla Group - India
- Bank of Tokyo Mitsubishi UFJ Ltd
- Simpson Spence & Young - Indonesia
- Leighton Contractors Pty Ltd - Australia
- Maharashtra Electricity Regulatory Commission - India
- Medco Energi Mining Internasional
- Sree Jayajothi Cements Limited - India
- Bayan Resources Tbk. - Indonesia
- Sindya Power Generating Company Private Ltd
- Global Green Power PLC Corporation, Philippines
- Commonwealth Bank - Australia
- Sarangani Energy Corporation, Philippines
- Electricity Authority, New Zealand
- Meralco Power Generation, Philippines
- Power Finance Corporation Ltd., India
- ICICI Bank Limited - India
- Vedanta Resources Plc - India
- Bahari Cakrawala Sebuku - Indonesia
- Global Business Power Corporation, Philippines
- Krishnapatnam Port Company Ltd. - India
- Semirara Mining and Power Corporation, Philippines
- Kepco SPC Power Corporation, Philippines
- PowerSource Philippines DevCo
- Aboitiz Power Corporation - Philippines
- Oldendorff Carriers - Singapore
- Interocean Group of Companies - India
- Eastern Coal Council - USA
- South Luzon Thermal Energy Corporation
- Tamil Nadu electricity Board
- Jaiprakash Power Ventures ltd
- Miang Besar Coal Terminal - Indonesia
- AsiaOL BioFuels Corp., Philippines
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Riau Bara Harum - Indonesia
- Toyota Tsusho Corporation, Japan
- Energy Link Ltd, New Zealand
- Trasteel International SA, Italy
- Kalimantan Lumbung Energi - Indonesia
- Minerals Council of Australia
- Indian Oil Corporation Limited
- Neyveli Lignite Corporation Ltd, - India
- Mintek Dendrill Indonesia
- PNOC Exploration Corporation - Philippines
- Attock Cement Pakistan Limited
- Antam Resourcindo - Indonesia
- Asia Pacific Energy Resources Ventures Inc, Philippines
- OPG Power Generation Pvt Ltd - India
- Intertek Mineral Services - Indonesia
- Marubeni Corporation - India
- Madhucon Powers Ltd - India
- Baramulti Group, Indonesia
- IEA Clean Coal Centre - UK
- Port Waratah Coal Services - Australia
- TeaM Sual Corporation - Philippines
- Deloitte Consulting - India
- Kumho Petrochemical, South Korea
- Anglo American - United Kingdom
- Coastal Gujarat Power Limited - India
- Indian Energy Exchange, India
- SMC Global Power, Philippines
- GN Power Mariveles Coal Plant, Philippines
- White Energy Company Limited
- Goldman Sachs - Singapore
- The State Trading Corporation of India Ltd
- Offshore Bulk Terminal Pte Ltd, Singapore
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