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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, 26 July 22
CAP RUSSIA'S OIL PRICE NOW - PROJECT SYNDICATE
Though the price of oil has declined in recent weeks, it is still through the roof, filtering through to gasoline prices, and causing economic and ...
Tuesday, 26 July 22
WILL SOUTH AMERICA’S WINTER DEMAND DRAW LNG CARGOES AWAY FROM EUROPE? - ICIS
South America is now in the middle of its winter demand season. Last year the region increased its share of global LNG imports in winter, with Braz ...
Monday, 25 July 22
GLOBAL 2021 COAL-FIRED ELECTRICITY GENERATION SURGES TO RECORD HIGH - REUTERS
By contrast, mine output was still fractionally below the record set between 2012 and 2014 because older and less efficient coal generators have be ...
Saturday, 23 July 22
THE EU HAS BEEN REDUCING IMPORTS OF RUSSIAN REFINED OIL PRODUCTS SINCE MARCH - BANCHERO COSTA
The European Union could now ban the import and transit of fuel oil from Russia around six months ahead of the planned deadline, an EU official and ...
Saturday, 23 July 22
INDONESIA CONSIDERING SCRAPPING DOMESTIC SALES RULE FOR PALM OIL EXPORTS - REUTERS
Indonesia is considering removing a domestic sales requirement for palm oil exports because high inventories of the vegetable oil have been holding ...
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- SMC Global Power, Philippines
- Central Electricity Authority - India
- Bhatia International Limited - India
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Dalmia Cement Bharat India
- GN Power Mariveles Coal Plant, Philippines
- Tata Chemicals Ltd - India
- Global Coal Blending Company Limited - Australia
- Meralco Power Generation, Philippines
- Goldman Sachs - Singapore
- Ambuja Cements Ltd - India
- Chettinad Cement Corporation Ltd - India
- Bank of Tokyo Mitsubishi UFJ Ltd
- Xindia Steels Limited - India
- Indonesian Coal Mining Association
- Directorate Of Revenue Intelligence - India
- Latin American Coal - Colombia
- Australian Commodity Traders Exchange
- Kepco SPC Power Corporation, Philippines
- Minerals Council of Australia
- Siam City Cement PLC, Thailand
- Sree Jayajothi Cements Limited - India
- IEA Clean Coal Centre - UK
- Kalimantan Lumbung Energi - Indonesia
- Singapore Mercantile Exchange
- Global Green Power PLC Corporation, Philippines
- MS Steel International - UAE
- McConnell Dowell - Australia
- Essar Steel Hazira Ltd - India
- Altura Mining Limited, Indonesia
- Pipit Mutiara Jaya. PT, Indonesia
- Ministry of Mines - Canada
- Straits Asia Resources Limited - Singapore
- Directorate General of MIneral and Coal - Indonesia
- Coalindo Energy - Indonesia
- Makarim & Taira - Indonesia
- Billiton Holdings Pty Ltd - Australia
- LBH Netherlands Bv - Netherlands
- Mercuria Energy - Indonesia
- Deloitte Consulting - India
- Parry Sugars Refinery, India
- Larsen & Toubro Limited - India
- Indian Oil Corporation Limited
- Mercator Lines Limited - India
- Central Java Power - Indonesia
- Maharashtra Electricity Regulatory Commission - India
- Riau Bara Harum - Indonesia
- Renaissance Capital - South Africa
- Kobexindo Tractors - Indoneisa
- Indogreen Group - Indonesia
- Savvy Resources Ltd - HongKong
- Indika Energy - Indonesia
- Sindya Power Generating Company Private Ltd
- Leighton Contractors Pty Ltd - Australia
- South Luzon Thermal Energy Corporation
- Wood Mackenzie - Singapore
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Merrill Lynch Commodities Europe
- Sakthi Sugars Limited - India
- Petrochimia International Co. Ltd.- Taiwan
- Orica Mining Services - Indonesia
- Formosa Plastics Group - Taiwan
- Offshore Bulk Terminal Pte Ltd, Singapore
- ASAPP Information Group - India
- Kumho Petrochemical, South Korea
- International Coal Ventures Pvt Ltd - India
- SN Aboitiz Power Inc, Philippines
- Baramulti Group, Indonesia
- Orica Australia Pty. Ltd.
- Cigading International Bulk Terminal - Indonesia
- CNBM International Corporation - China
- Jindal Steel & Power Ltd - India
- Banpu Public Company Limited - Thailand
- IHS Mccloskey Coal Group - USA
- Globalindo Alam Lestari - Indonesia
- OPG Power Generation Pvt Ltd - India
- Grasim Industreis Ltd - India
- TeaM Sual Corporation - Philippines
- The University of Queensland
- Marubeni Corporation - India
- CIMB Investment Bank - Malaysia
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Trasteel International SA, Italy
- Aditya Birla Group - India
- Salva Resources Pvt Ltd - India
- Rio Tinto Coal - Australia
- Jorong Barutama Greston.PT - Indonesia
- Sojitz Corporation - Japan
- Energy Link Ltd, New Zealand
- Economic Council, Georgia
- Indian Energy Exchange, India
- GVK Power & Infra Limited - India
- Uttam Galva Steels Limited - India
- SMG Consultants - Indonesia
- Bulk Trading Sa - Switzerland
- Ministry of Finance - Indonesia
- Kideco Jaya Agung - Indonesia
- Asmin Koalindo Tuhup - Indonesia
- White Energy Company Limited
- Port Waratah Coal Services - Australia
- Bayan Resources Tbk. - Indonesia
- European Bulk Services B.V. - Netherlands
- Coastal Gujarat Power Limited - India
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Energy Development Corp, Philippines
- Oldendorff Carriers - Singapore
- Madhucon Powers Ltd - India
- Attock Cement Pakistan Limited
- Iligan Light & Power Inc, Philippines
- Samtan Co., Ltd - South Korea
- Independent Power Producers Association of India
- Kapuas Tunggal Persada - Indonesia
- Georgia Ports Authority, United States
- Africa Commodities Group - South Africa
- Agrawal Coal Company - India
- Eastern Energy - Thailand
- The State Trading Corporation of India Ltd
- Timah Investasi Mineral - Indoneisa
- Simpson Spence & Young - Indonesia
- Global Business Power Corporation, Philippines
- Posco Energy - South Korea
- Lanco Infratech Ltd - India
- India Bulls Power Limited - India
- Kaltim Prima Coal - Indonesia
- Gujarat Mineral Development Corp Ltd - India
- Manunggal Multi Energi - Indonesia
- Vedanta Resources Plc - India
- Cement Manufacturers Association - India
- GMR Energy Limited - India
- Edison Trading Spa - Italy
- Vizag Seaport Private Limited - India
- GAC Shipping (India) Pvt Ltd
- Electricity Generating Authority of Thailand
- Alfred C Toepfer International GmbH - Germany
- Mintek Dendrill Indonesia
- Therma Luzon, Inc, Philippines
- Standard Chartered Bank - UAE
- Thiess Contractors Indonesia
- Semirara Mining and Power Corporation, Philippines
- Kohat Cement Company Ltd. - Pakistan
- Sarangani Energy Corporation, Philippines
- Toyota Tsusho Corporation, Japan
- Price Waterhouse Coopers - Russia
- Tamil Nadu electricity Board
- The Treasury - Australian Government
- Eastern Coal Council - USA
- Bukit Makmur.PT - Indonesia
- Jaiprakash Power Ventures ltd
- Bhushan Steel Limited - India
- Metalloyd Limited - United Kingdom
- Videocon Industries ltd - India
- London Commodity Brokers - England
- Gujarat Electricity Regulatory Commission - India
- Carbofer General Trading SA - India
- Australian Coal Association
- Planning Commission, India
- Ceylon Electricity Board - Sri Lanka
- Petron Corporation, Philippines
- Krishnapatnam Port Company Ltd. - India
- Miang Besar Coal Terminal - Indonesia
- VISA Power Limited - India
- Bhoruka Overseas - Indonesia
- Indo Tambangraya Megah - Indonesia
- PowerSource Philippines DevCo
- Rashtriya Ispat Nigam Limited - India
- Kartika Selabumi Mining - Indonesia
- AsiaOL BioFuels Corp., Philippines
- Pendopo Energi Batubara - Indonesia
- Bharathi Cement Corporation - India
- Sinarmas Energy and Mining - Indonesia
- Sical Logistics Limited - India
- Bukit Baiduri Energy - Indonesia
- Vijayanagar Sugar Pvt Ltd - India
- Siam City Cement - Thailand
- Neyveli Lignite Corporation Ltd, - India
- Binh Thuan Hamico - Vietnam
- Bangladesh Power Developement Board
- New Zealand Coal & Carbon
- Commonwealth Bank - Australia
- Parliament of New Zealand
- Gujarat Sidhee Cement - India
- Intertek Mineral Services - Indonesia
- TNB Fuel Sdn Bhd - Malaysia
- Semirara Mining Corp, Philippines
- Bukit Asam (Persero) Tbk - Indonesia
- ICICI Bank Limited - India
- Holcim Trading Pte Ltd - Singapore
- Interocean Group of Companies - India
- Thai Mozambique Logistica
- PNOC Exploration Corporation - Philippines
- PetroVietnam Power Coal Import and Supply Company
- Aboitiz Power Corporation - Philippines
- Meenaskhi Energy Private Limited - India
- Power Finance Corporation Ltd., India
- Barasentosa Lestari - Indonesia
- Karbindo Abesyapradhi - Indoneisa
- Karaikal Port Pvt Ltd - India
- Electricity Authority, New Zealand
- Antam Resourcindo - Indonesia
- Coal and Oil Company - UAE
- Medco Energi Mining Internasional
- San Jose City I Power Corp, Philippines
- Ministry of Transport, Egypt
- Bahari Cakrawala Sebuku - Indonesia
- Maheswari Brothers Coal Limited - India
- Ind-Barath Power Infra Limited - India
- Mjunction Services Limited - India
- PTC India Limited - India
- Wilmar Investment Holdings
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Heidelberg Cement - Germany
- Borneo Indobara - Indonesia
- Romanian Commodities Exchange
- Anglo American - United Kingdom
- Malabar Cements Ltd - India
- Chamber of Mines of South Africa
- Star Paper Mills Limited - India
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