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