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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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Wednesday, 17 August 22
CHINA'S COAL-RICH SHANXI MAKES STRIDES IN HIGH-QUALITY DEVELOPMENT - XINHUA
Shanxi, a major coal-producing province in north China, has made continuous advances in high-quality development over the past decade, according to ...
Wednesday, 17 August 22
PAXOCEAN, HONG LAM MARINE AND BUREAU VERITAS SIGN MOU TO DEVELOP AMMONIA BUNKER VESSEL DESIGN - BUREAU VERITAS
PaxOcean Engineering Pte. Ltd. has signed a Memorandum of Understanding (MOU) with Singapore-based bunker vessel operator Hong Lam Marine and class ...
Wednesday, 17 August 22
GOODFUELSS ASIA-PACIFIC BRANCH KICKSTARTS SUSTAINABLE BIOFUEL DELIVERIES WITH NYK AS FIRST CLIENT - GOOD FUELS
GoodFuels, the leading biofuels pioneer for the global transport industry, has today announced that it has successfully supplied sustainable marine ...
Tuesday, 16 August 22
EU BAN ON RUSSIAN COAL IMPORTS COMES INTO FORCE - DEUTSCHE WELLE
The European Union banned Russian coal imports in response to the invasion of Ukraine as part of sanctions in April. Since then, it’s been sc ...
Thursday, 11 August 22
MARKET INSIGHT - INTERMODAL
On July 22nd, Ukraine signed a deal with Russia to release 22mn tons of grain from Ukraine’s 3 major ports (Yuzhny, Chornomorsk, Odesa). Such ...
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- ASAPP Information Group - India
- Minerals Council of Australia
- Ambuja Cements Ltd - India
- Pipit Mutiara Jaya. PT, Indonesia
- LBH Netherlands Bv - Netherlands
- Makarim & Taira - Indonesia
- GVK Power & Infra Limited - India
- European Bulk Services B.V. - Netherlands
- Bharathi Cement Corporation - India
- Kalimantan Lumbung Energi - Indonesia
- Dalmia Cement Bharat India
- Cigading International Bulk Terminal - Indonesia
- Aboitiz Power Corporation - Philippines
- Bhushan Steel Limited - India
- India Bulls Power Limited - India
- Energy Development Corp, Philippines
- Petron Corporation, Philippines
- Borneo Indobara - Indonesia
- Semirara Mining and Power Corporation, Philippines
- Iligan Light & Power Inc, Philippines
- Rashtriya Ispat Nigam Limited - India
- Edison Trading Spa - Italy
- Offshore Bulk Terminal Pte Ltd, Singapore
- Renaissance Capital - South Africa
- London Commodity Brokers - England
- Grasim Industreis Ltd - India
- White Energy Company Limited
- Merrill Lynch Commodities Europe
- Banpu Public Company Limited - Thailand
- Eastern Energy - Thailand
- Maheswari Brothers Coal Limited - India
- Alfred C Toepfer International GmbH - Germany
- Bhoruka Overseas - Indonesia
- San Jose City I Power Corp, Philippines
- Jaiprakash Power Ventures ltd
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Latin American Coal - Colombia
- Holcim Trading Pte Ltd - Singapore
- Port Waratah Coal Services - Australia
- Eastern Coal Council - USA
- Ministry of Transport, Egypt
- Sinarmas Energy and Mining - Indonesia
- Petrochimia International Co. Ltd.- Taiwan
- Mercator Lines Limited - India
- Neyveli Lignite Corporation Ltd, - India
- Leighton Contractors Pty Ltd - Australia
- Timah Investasi Mineral - Indoneisa
- Australian Coal Association
- Medco Energi Mining Internasional
- Bhatia International Limited - India
- PTC India Limited - India
- Global Coal Blending Company Limited - Australia
- The State Trading Corporation of India Ltd
- Chamber of Mines of South Africa
- Siam City Cement - Thailand
- Goldman Sachs - Singapore
- McConnell Dowell - Australia
- Essar Steel Hazira Ltd - India
- Global Green Power PLC Corporation, Philippines
- Globalindo Alam Lestari - Indonesia
- Energy Link Ltd, New Zealand
- Kepco SPC Power Corporation, Philippines
- Mintek Dendrill Indonesia
- Independent Power Producers Association of India
- Jindal Steel & Power Ltd - India
- SMC Global Power, Philippines
- Planning Commission, India
- Chettinad Cement Corporation Ltd - India
- Tamil Nadu electricity Board
- Indonesian Coal Mining Association
- Attock Cement Pakistan Limited
- Cement Manufacturers Association - India
- Indogreen Group - Indonesia
- Kaltim Prima Coal - Indonesia
- Ind-Barath Power Infra Limited - India
- Vizag Seaport Private Limited - India
- Posco Energy - South Korea
- Coalindo Energy - Indonesia
- Mercuria Energy - Indonesia
- Samtan Co., Ltd - South Korea
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- CIMB Investment Bank - Malaysia
- GMR Energy Limited - India
- Romanian Commodities Exchange
- Siam City Cement PLC, Thailand
- Marubeni Corporation - India
- Indo Tambangraya Megah - Indonesia
- GN Power Mariveles Coal Plant, Philippines
- Bukit Makmur.PT - Indonesia
- Kartika Selabumi Mining - Indonesia
- Bank of Tokyo Mitsubishi UFJ Ltd
- CNBM International Corporation - China
- Coastal Gujarat Power Limited - India
- Singapore Mercantile Exchange
- Directorate Of Revenue Intelligence - India
- Salva Resources Pvt Ltd - India
- Standard Chartered Bank - UAE
- Parry Sugars Refinery, India
- Star Paper Mills Limited - India
- Directorate General of MIneral and Coal - Indonesia
- Metalloyd Limited - United Kingdom
- Africa Commodities Group - South Africa
- Global Business Power Corporation, Philippines
- Agrawal Coal Company - India
- Kohat Cement Company Ltd. - Pakistan
- Sarangani Energy Corporation, Philippines
- Anglo American - United Kingdom
- Meenaskhi Energy Private Limited - India
- Antam Resourcindo - Indonesia
- Semirara Mining Corp, Philippines
- The University of Queensland
- Binh Thuan Hamico - Vietnam
- Baramulti Group, Indonesia
- Orica Australia Pty. Ltd.
- Gujarat Sidhee Cement - India
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Gujarat Electricity Regulatory Commission - India
- Ministry of Mines - Canada
- Kobexindo Tractors - Indoneisa
- Miang Besar Coal Terminal - Indonesia
- Bangladesh Power Developement Board
- Price Waterhouse Coopers - Russia
- Kapuas Tunggal Persada - Indonesia
- Aditya Birla Group - India
- Indika Energy - Indonesia
- PetroVietnam Power Coal Import and Supply Company
- Indian Energy Exchange, India
- Altura Mining Limited, Indonesia
- Electricity Authority, New Zealand
- Kumho Petrochemical, South Korea
- Madhucon Powers Ltd - India
- Barasentosa Lestari - Indonesia
- Videocon Industries ltd - India
- VISA Power Limited - India
- Electricity Generating Authority of Thailand
- Intertek Mineral Services - Indonesia
- Bahari Cakrawala Sebuku - Indonesia
- Sakthi Sugars Limited - India
- Commonwealth Bank - Australia
- New Zealand Coal & Carbon
- Interocean Group of Companies - India
- Ceylon Electricity Board - Sri Lanka
- Formosa Plastics Group - Taiwan
- Oldendorff Carriers - Singapore
- Meralco Power Generation, Philippines
- PowerSource Philippines DevCo
- Carbofer General Trading SA - India
- OPG Power Generation Pvt Ltd - India
- Trasteel International SA, Italy
- SMG Consultants - Indonesia
- Australian Commodity Traders Exchange
- Malabar Cements Ltd - India
- TNB Fuel Sdn Bhd - Malaysia
- Central Java Power - Indonesia
- Sree Jayajothi Cements Limited - India
- Power Finance Corporation Ltd., India
- Mjunction Services Limited - India
- Tata Chemicals Ltd - India
- Sindya Power Generating Company Private Ltd
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Parliament of New Zealand
- Economic Council, Georgia
- Gujarat Mineral Development Corp Ltd - India
- South Luzon Thermal Energy Corporation
- Manunggal Multi Energi - Indonesia
- MS Steel International - UAE
- Wood Mackenzie - Singapore
- Savvy Resources Ltd - HongKong
- Thiess Contractors Indonesia
- Xindia Steels Limited - India
- Toyota Tsusho Corporation, Japan
- PNOC Exploration Corporation - Philippines
- AsiaOL BioFuels Corp., Philippines
- Kideco Jaya Agung - Indonesia
- Billiton Holdings Pty Ltd - Australia
- Karbindo Abesyapradhi - Indoneisa
- TeaM Sual Corporation - Philippines
- Riau Bara Harum - Indonesia
- Bayan Resources Tbk. - Indonesia
- Wilmar Investment Holdings
- Vedanta Resources Plc - India
- Indian Oil Corporation Limited
- Bukit Asam (Persero) Tbk - Indonesia
- Pendopo Energi Batubara - Indonesia
- Orica Mining Services - Indonesia
- Bulk Trading Sa - Switzerland
- Rio Tinto Coal - Australia
- The Treasury - Australian Government
- Uttam Galva Steels Limited - India
- IHS Mccloskey Coal Group - USA
- Straits Asia Resources Limited - Singapore
- Maharashtra Electricity Regulatory Commission - India
- Bukit Baiduri Energy - Indonesia
- Lanco Infratech Ltd - India
- Krishnapatnam Port Company Ltd. - India
- Simpson Spence & Young - Indonesia
- Jorong Barutama Greston.PT - Indonesia
- Karaikal Port Pvt Ltd - India
- Sojitz Corporation - Japan
- Heidelberg Cement - Germany
- Georgia Ports Authority, United States
- Coal and Oil Company - UAE
- Therma Luzon, Inc, Philippines
- Larsen & Toubro Limited - India
- Sical Logistics Limited - India
- GAC Shipping (India) Pvt Ltd
- International Coal Ventures Pvt Ltd - India
- Vijayanagar Sugar Pvt Ltd - India
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- IEA Clean Coal Centre - UK
- Thai Mozambique Logistica
- Deloitte Consulting - India
- Ministry of Finance - Indonesia
- Asmin Koalindo Tuhup - Indonesia
- ICICI Bank Limited - India
- Central Electricity Authority - India
- SN Aboitiz Power Inc, Philippines
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