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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.
The Information contained within the website of COALspot.com is intended for informational purposes only and is not intended as professional counsel and should not be used as such.
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Wednesday, 10 August 22
THE FUTURE OF COAL: EIGHT KEY THEMES FROM THE GLOBAL COAL FORUM - WOOD MACKENZIE
Coal investors face a multi-layered and unavoidable challenge: markets distorted by war, trade constraints and the existential threat of the energy ...
Saturday, 06 August 22
SUMITOMO Q1 PROFIT RISES 45% ON STRONGER PRICES OF COAL, NICKEL - REUTERS
Japanese trading house Sumitomo Corp 8053.T said on Wednesday its net profit for the April-June quarter rose 45% to a record thanks to higher price ...
Saturday, 06 August 22
GERMANY'S ENERGY U-TURN: COAL INSTEAD OF GAS - DEUTSCHE WELLE
Berlin has realized it will never again import as much energy from Russia as before the Ukraine war. So the challenge is to wean Germany off its de ...
Saturday, 30 July 22
NUANCES OF FORCE MAJEURE CLAUSE - BALTIC EXCHANGE
Knowledge to Elevate
In NKD Maritime Limited v. Bart Maritime (No 2) Inc (Shagang Giant) [2022] EWHC 1615 (Comm), Bart Maritime (No 2) Inc (th ...
Saturday, 30 July 22
AEMO URGES QUICKER SHIFT TO RENEWABLES AMID COAL FAILURES AND SOARING FOSSIL FUEL COSTS
The Australian Energy Market Operator has called for an accelerated shift to wind and solar, backed up by batteries and other storage, as a devasta ...
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- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Globalindo Alam Lestari - Indonesia
- Jorong Barutama Greston.PT - Indonesia
- Kideco Jaya Agung - Indonesia
- Krishnapatnam Port Company Ltd. - India
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- India Bulls Power Limited - India
- Georgia Ports Authority, United States
- Maharashtra Electricity Regulatory Commission - India
- Romanian Commodities Exchange
- Tata Chemicals Ltd - India
- Dalmia Cement Bharat India
- McConnell Dowell - Australia
- Manunggal Multi Energi - Indonesia
- Kohat Cement Company Ltd. - Pakistan
- Salva Resources Pvt Ltd - India
- Wood Mackenzie - Singapore
- Sarangani Energy Corporation, Philippines
- Interocean Group of Companies - India
- Binh Thuan Hamico - Vietnam
- Savvy Resources Ltd - HongKong
- Chamber of Mines of South Africa
- Power Finance Corporation Ltd., India
- London Commodity Brokers - England
- OPG Power Generation Pvt Ltd - India
- Central Java Power - Indonesia
- Thai Mozambique Logistica
- Ceylon Electricity Board - Sri Lanka
- Edison Trading Spa - Italy
- Antam Resourcindo - Indonesia
- Makarim & Taira - Indonesia
- Bukit Baiduri Energy - Indonesia
- Directorate Of Revenue Intelligence - India
- European Bulk Services B.V. - Netherlands
- Ministry of Finance - Indonesia
- Alfred C Toepfer International GmbH - Germany
- Global Green Power PLC Corporation, Philippines
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Electricity Generating Authority of Thailand
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Jaiprakash Power Ventures ltd
- Gujarat Mineral Development Corp Ltd - India
- South Luzon Thermal Energy Corporation
- Bukit Makmur.PT - Indonesia
- Indonesian Coal Mining Association
- TeaM Sual Corporation - Philippines
- Oldendorff Carriers - Singapore
- CNBM International Corporation - China
- Holcim Trading Pte Ltd - Singapore
- Sinarmas Energy and Mining - Indonesia
- Aditya Birla Group - India
- Leighton Contractors Pty Ltd - Australia
- Indogreen Group - Indonesia
- San Jose City I Power Corp, Philippines
- ICICI Bank Limited - India
- Eastern Energy - Thailand
- Commonwealth Bank - Australia
- Rio Tinto Coal - Australia
- Iligan Light & Power Inc, Philippines
- Tamil Nadu electricity Board
- Maheswari Brothers Coal Limited - India
- VISA Power Limited - India
- International Coal Ventures Pvt Ltd - India
- Africa Commodities Group - South Africa
- Bharathi Cement Corporation - India
- Energy Development Corp, Philippines
- Borneo Indobara - Indonesia
- Vijayanagar Sugar Pvt Ltd - India
- White Energy Company Limited
- Bank of Tokyo Mitsubishi UFJ Ltd
- Thiess Contractors Indonesia
- Planning Commission, India
- Timah Investasi Mineral - Indoneisa
- Samtan Co., Ltd - South Korea
- Latin American Coal - Colombia
- Madhucon Powers Ltd - India
- Formosa Plastics Group - Taiwan
- Bukit Asam (Persero) Tbk - Indonesia
- IHS Mccloskey Coal Group - USA
- Ambuja Cements Ltd - India
- Asmin Koalindo Tuhup - Indonesia
- Port Waratah Coal Services - Australia
- Medco Energi Mining Internasional
- Sical Logistics Limited - India
- Kapuas Tunggal Persada - Indonesia
- Semirara Mining and Power Corporation, Philippines
- SMC Global Power, Philippines
- Larsen & Toubro Limited - India
- Anglo American - United Kingdom
- PTC India Limited - India
- Attock Cement Pakistan Limited
- The State Trading Corporation of India Ltd
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Lanco Infratech Ltd - India
- MS Steel International - UAE
- Ministry of Mines - Canada
- GN Power Mariveles Coal Plant, Philippines
- Kepco SPC Power Corporation, Philippines
- Sakthi Sugars Limited - India
- Barasentosa Lestari - Indonesia
- Siam City Cement PLC, Thailand
- Posco Energy - South Korea
- PowerSource Philippines DevCo
- IEA Clean Coal Centre - UK
- Therma Luzon, Inc, Philippines
- Indian Oil Corporation Limited
- Directorate General of MIneral and Coal - Indonesia
- Carbofer General Trading SA - India
- Straits Asia Resources Limited - Singapore
- Meralco Power Generation, Philippines
- Orica Mining Services - Indonesia
- Banpu Public Company Limited - Thailand
- Parliament of New Zealand
- Essar Steel Hazira Ltd - India
- Bhatia International Limited - India
- Sojitz Corporation - Japan
- Standard Chartered Bank - UAE
- Cement Manufacturers Association - India
- Trasteel International SA, Italy
- Riau Bara Harum - Indonesia
- Wilmar Investment Holdings
- Pendopo Energi Batubara - Indonesia
- Australian Coal Association
- Toyota Tsusho Corporation, Japan
- Bulk Trading Sa - Switzerland
- Global Coal Blending Company Limited - Australia
- Chettinad Cement Corporation Ltd - India
- Marubeni Corporation - India
- Bayan Resources Tbk. - Indonesia
- Indika Energy - Indonesia
- Aboitiz Power Corporation - Philippines
- Petron Corporation, Philippines
- TNB Fuel Sdn Bhd - Malaysia
- Mercator Lines Limited - India
- Sree Jayajothi Cements Limited - India
- Rashtriya Ispat Nigam Limited - India
- The Treasury - Australian Government
- Agrawal Coal Company - India
- Deloitte Consulting - India
- Electricity Authority, New Zealand
- Grasim Industreis Ltd - India
- Ministry of Transport, Egypt
- Petrochimia International Co. Ltd.- Taiwan
- Coalindo Energy - Indonesia
- LBH Netherlands Bv - Netherlands
- GAC Shipping (India) Pvt Ltd
- Bhoruka Overseas - Indonesia
- Price Waterhouse Coopers - Russia
- Kumho Petrochemical, South Korea
- Metalloyd Limited - United Kingdom
- Neyveli Lignite Corporation Ltd, - India
- Eastern Coal Council - USA
- Cigading International Bulk Terminal - Indonesia
- Goldman Sachs - Singapore
- Independent Power Producers Association of India
- Mjunction Services Limited - India
- Mintek Dendrill Indonesia
- Merrill Lynch Commodities Europe
- Meenaskhi Energy Private Limited - India
- Altura Mining Limited, Indonesia
- Indo Tambangraya Megah - Indonesia
- AsiaOL BioFuels Corp., Philippines
- Videocon Industries ltd - India
- Heidelberg Cement - Germany
- Kalimantan Lumbung Energi - Indonesia
- Karbindo Abesyapradhi - Indoneisa
- Minerals Council of Australia
- Malabar Cements Ltd - India
- CIMB Investment Bank - Malaysia
- Renaissance Capital - South Africa
- Pipit Mutiara Jaya. PT, Indonesia
- Uttam Galva Steels Limited - India
- Gujarat Sidhee Cement - India
- Central Electricity Authority - India
- New Zealand Coal & Carbon
- Coastal Gujarat Power Limited - India
- Simpson Spence & Young - Indonesia
- ASAPP Information Group - India
- Vedanta Resources Plc - India
- Australian Commodity Traders Exchange
- Global Business Power Corporation, Philippines
- Singapore Mercantile Exchange
- Bhushan Steel Limited - India
- Kartika Selabumi Mining - Indonesia
- Indian Energy Exchange, India
- Miang Besar Coal Terminal - Indonesia
- Billiton Holdings Pty Ltd - Australia
- Baramulti Group, Indonesia
- Coal and Oil Company - UAE
- Orica Australia Pty. Ltd.
- GMR Energy Limited - India
- The University of Queensland
- Sindya Power Generating Company Private Ltd
- Bangladesh Power Developement Board
- Mercuria Energy - Indonesia
- Gujarat Electricity Regulatory Commission - India
- Kobexindo Tractors - Indoneisa
- GVK Power & Infra Limited - India
- Kaltim Prima Coal - Indonesia
- Jindal Steel & Power Ltd - India
- SN Aboitiz Power Inc, Philippines
- PetroVietnam Power Coal Import and Supply Company
- Offshore Bulk Terminal Pte Ltd, Singapore
- Semirara Mining Corp, Philippines
- Karaikal Port Pvt Ltd - India
- Siam City Cement - Thailand
- Intertek Mineral Services - Indonesia
- Vizag Seaport Private Limited - India
- Economic Council, Georgia
- Energy Link Ltd, New Zealand
- SMG Consultants - Indonesia
- Parry Sugars Refinery, India
- PNOC Exploration Corporation - Philippines
- Bahari Cakrawala Sebuku - Indonesia
- Star Paper Mills Limited - India
- Ind-Barath Power Infra Limited - India
- Xindia Steels Limited - India
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