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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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- Global Business Power Corporation, Philippines
- Georgia Ports Authority, United States
- Timah Investasi Mineral - Indoneisa
- Sical Logistics Limited - India
- Intertek Mineral Services - Indonesia
- Deloitte Consulting - India
- Straits Asia Resources Limited - Singapore
- London Commodity Brokers - England
- Posco Energy - South Korea
- Power Finance Corporation Ltd., India
- Semirara Mining and Power Corporation, Philippines
- Globalindo Alam Lestari - Indonesia
- GVK Power & Infra Limited - India
- Latin American Coal - Colombia
- Petrochimia International Co. Ltd.- Taiwan
- Kartika Selabumi Mining - Indonesia
- Sree Jayajothi Cements Limited - India
- Ceylon Electricity Board - Sri Lanka
- Mercator Lines Limited - India
- Gujarat Electricity Regulatory Commission - India
- Independent Power Producers Association of India
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Samtan Co., Ltd - South Korea
- Indogreen Group - Indonesia
- White Energy Company Limited
- Vijayanagar Sugar Pvt Ltd - India
- New Zealand Coal & Carbon
- Cigading International Bulk Terminal - Indonesia
- Neyveli Lignite Corporation Ltd, - India
- Chettinad Cement Corporation Ltd - India
- Electricity Generating Authority of Thailand
- Kumho Petrochemical, South Korea
- IHS Mccloskey Coal Group - USA
- Sojitz Corporation - Japan
- Bharathi Cement Corporation - India
- Grasim Industreis Ltd - India
- Orica Australia Pty. Ltd.
- Ministry of Finance - Indonesia
- Energy Development Corp, Philippines
- Semirara Mining Corp, Philippines
- Electricity Authority, New Zealand
- Planning Commission, India
- Indo Tambangraya Megah - Indonesia
- Kapuas Tunggal Persada - Indonesia
- PNOC Exploration Corporation - Philippines
- Jaiprakash Power Ventures ltd
- Metalloyd Limited - United Kingdom
- Bukit Asam (Persero) Tbk - Indonesia
- Thiess Contractors Indonesia
- Bulk Trading Sa - Switzerland
- Pendopo Energi Batubara - Indonesia
- The University of Queensland
- Indian Energy Exchange, India
- Vedanta Resources Plc - India
- Indian Oil Corporation Limited
- CIMB Investment Bank - Malaysia
- Sinarmas Energy and Mining - Indonesia
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Port Waratah Coal Services - Australia
- Coalindo Energy - Indonesia
- Mintek Dendrill Indonesia
- Bayan Resources Tbk. - Indonesia
- Xindia Steels Limited - India
- Rashtriya Ispat Nigam Limited - India
- Chamber of Mines of South Africa
- Gujarat Sidhee Cement - India
- Anglo American - United Kingdom
- Borneo Indobara - Indonesia
- Maheswari Brothers Coal Limited - India
- Banpu Public Company Limited - Thailand
- Kohat Cement Company Ltd. - Pakistan
- Petron Corporation, Philippines
- Billiton Holdings Pty Ltd - Australia
- VISA Power Limited - India
- Marubeni Corporation - India
- Coal and Oil Company - UAE
- Australian Coal Association
- The State Trading Corporation of India Ltd
- Heidelberg Cement - Germany
- Indonesian Coal Mining Association
- CNBM International Corporation - China
- Bukit Baiduri Energy - Indonesia
- Parry Sugars Refinery, India
- Central Java Power - Indonesia
- Aboitiz Power Corporation - Philippines
- Manunggal Multi Energi - Indonesia
- PetroVietnam Power Coal Import and Supply Company
- TNB Fuel Sdn Bhd - Malaysia
- Kepco SPC Power Corporation, Philippines
- Jorong Barutama Greston.PT - Indonesia
- Meralco Power Generation, Philippines
- Maharashtra Electricity Regulatory Commission - India
- OPG Power Generation Pvt Ltd - India
- Parliament of New Zealand
- Central Electricity Authority - India
- Siam City Cement - Thailand
- Mjunction Services Limited - India
- Kaltim Prima Coal - Indonesia
- Eastern Coal Council - USA
- Tata Chemicals Ltd - India
- Riau Bara Harum - Indonesia
- ICICI Bank Limited - India
- Star Paper Mills Limited - India
- ASAPP Information Group - India
- Rio Tinto Coal - Australia
- Holcim Trading Pte Ltd - Singapore
- Commonwealth Bank - Australia
- Meenaskhi Energy Private Limited - India
- Kobexindo Tractors - Indoneisa
- Bhushan Steel Limited - India
- The Treasury - Australian Government
- Australian Commodity Traders Exchange
- Edison Trading Spa - Italy
- Kideco Jaya Agung - Indonesia
- Tamil Nadu electricity Board
- SMC Global Power, Philippines
- Cement Manufacturers Association - India
- McConnell Dowell - Australia
- PowerSource Philippines DevCo
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- PTC India Limited - India
- Larsen & Toubro Limited - India
- Trasteel International SA, Italy
- Minerals Council of Australia
- Agrawal Coal Company - India
- Karbindo Abesyapradhi - Indoneisa
- Energy Link Ltd, New Zealand
- GAC Shipping (India) Pvt Ltd
- San Jose City I Power Corp, Philippines
- Baramulti Group, Indonesia
- Videocon Industries ltd - India
- Pipit Mutiara Jaya. PT, Indonesia
- Miang Besar Coal Terminal - Indonesia
- Renaissance Capital - South Africa
- Orica Mining Services - Indonesia
- Romanian Commodities Exchange
- Interocean Group of Companies - India
- Ind-Barath Power Infra Limited - India
- Bukit Makmur.PT - Indonesia
- Barasentosa Lestari - Indonesia
- Malabar Cements Ltd - India
- Karaikal Port Pvt Ltd - India
- Thai Mozambique Logistica
- South Luzon Thermal Energy Corporation
- Lanco Infratech Ltd - India
- Offshore Bulk Terminal Pte Ltd, Singapore
- India Bulls Power Limited - India
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Price Waterhouse Coopers - Russia
- SMG Consultants - Indonesia
- Bhatia International Limited - India
- Kalimantan Lumbung Energi - Indonesia
- Binh Thuan Hamico - Vietnam
- Directorate General of MIneral and Coal - Indonesia
- Ambuja Cements Ltd - India
- GN Power Mariveles Coal Plant, Philippines
- Directorate Of Revenue Intelligence - India
- Wilmar Investment Holdings
- European Bulk Services B.V. - Netherlands
- Antam Resourcindo - Indonesia
- Aditya Birla Group - India
- Coastal Gujarat Power Limited - India
- Bank of Tokyo Mitsubishi UFJ Ltd
- Bangladesh Power Developement Board
- Leighton Contractors Pty Ltd - Australia
- Simpson Spence & Young - Indonesia
- Global Green Power PLC Corporation, Philippines
- Altura Mining Limited, Indonesia
- Indika Energy - Indonesia
- Africa Commodities Group - South Africa
- Wood Mackenzie - Singapore
- Eastern Energy - Thailand
- Iligan Light & Power Inc, Philippines
- AsiaOL BioFuels Corp., Philippines
- Standard Chartered Bank - UAE
- Therma Luzon, Inc, Philippines
- IEA Clean Coal Centre - UK
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- International Coal Ventures Pvt Ltd - India
- Savvy Resources Ltd - HongKong
- Merrill Lynch Commodities Europe
- Mercuria Energy - Indonesia
- SN Aboitiz Power Inc, Philippines
- Singapore Mercantile Exchange
- Uttam Galva Steels Limited - India
- Vizag Seaport Private Limited - India
- Economic Council, Georgia
- TeaM Sual Corporation - Philippines
- Alfred C Toepfer International GmbH - Germany
- Ministry of Transport, Egypt
- Dalmia Cement Bharat India
- Attock Cement Pakistan Limited
- Medco Energi Mining Internasional
- LBH Netherlands Bv - Netherlands
- MS Steel International - UAE
- Formosa Plastics Group - Taiwan
- Bhoruka Overseas - Indonesia
- Makarim & Taira - Indonesia
- Global Coal Blending Company Limited - Australia
- Sakthi Sugars Limited - India
- Essar Steel Hazira Ltd - India
- GMR Energy Limited - India
- Madhucon Powers Ltd - India
- Asmin Koalindo Tuhup - Indonesia
- Toyota Tsusho Corporation, Japan
- Gujarat Mineral Development Corp Ltd - India
- Krishnapatnam Port Company Ltd. - India
- Ministry of Mines - Canada
- Goldman Sachs - Singapore
- Sindya Power Generating Company Private Ltd
- Sarangani Energy Corporation, Philippines
- Bahari Cakrawala Sebuku - Indonesia
- Oldendorff Carriers - Singapore
- Salva Resources Pvt Ltd - India
- Siam City Cement PLC, Thailand
- Jindal Steel & Power Ltd - India
- Carbofer General Trading SA - India
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