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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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Saturday, 23 July 22
STABILITY OF RUSSIAN GAS FLOWS REMAIN UNCERTAIN, DESPITE THE REOPENING OF NORD STREAM - WOOD MACKENZIE
Gazprom confirmed today that regular annual maintenance of Nord Stream is officially over and gas flows restarted at 63 million cubic metres per da ...
Friday, 22 July 22
MARKET INSIGHT - INTERMODAL
Faced with uncertainty regarding the most cost-efficient alternative fuels and the future dominant method to reduce their greenhouse emissions, man ...
Friday, 22 July 22
YANCOAL AUSTRALIA CUTS 2022 COAL OUTPUT VIEW AS FLOODS, COVID BITE - REUTERS
Coal miner Yancoal Australia Ltd YAL.AX cut its 2022 output forecast on Wednesday, signalling a hit from higher-than-expected rainfall, COVID-19-le ...
Wednesday, 20 July 22
BOOST FOR BIOFUELS AS IMO REMOVES REGULATORY HURDLE - GARD
MARPOL Annex VI regulations were written for petroleum derived fuels but also apply to biofuels. It has been a challenge to meet the regulatory req ...
Wednesday, 20 July 22
INDONESIA’S COAL EXPORTS TO THE EU INCREASED SIGNIFICANTLY RECENTLY
European countries have increased coal imports from Indonesia due to the energy crisis that hit the region after Russia cuts gas exports to Europe. ...
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- Attock Cement Pakistan Limited
- Sinarmas Energy and Mining - Indonesia
- Siam City Cement - Thailand
- Global Coal Blending Company Limited - Australia
- Vizag Seaport Private Limited - India
- Straits Asia Resources Limited - Singapore
- Holcim Trading Pte Ltd - Singapore
- Intertek Mineral Services - Indonesia
- Port Waratah Coal Services - Australia
- OPG Power Generation Pvt Ltd - India
- LBH Netherlands Bv - Netherlands
- PowerSource Philippines DevCo
- Sree Jayajothi Cements Limited - India
- Sojitz Corporation - Japan
- CIMB Investment Bank - Malaysia
- Power Finance Corporation Ltd., India
- Bank of Tokyo Mitsubishi UFJ Ltd
- Indian Oil Corporation Limited
- Binh Thuan Hamico - Vietnam
- Wilmar Investment Holdings
- Directorate Of Revenue Intelligence - India
- Marubeni Corporation - India
- Sical Logistics Limited - India
- Kepco SPC Power Corporation, Philippines
- Tamil Nadu electricity Board
- Antam Resourcindo - Indonesia
- Electricity Generating Authority of Thailand
- Medco Energi Mining Internasional
- Ministry of Transport, Egypt
- Indika Energy - Indonesia
- Orica Mining Services - Indonesia
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Maheswari Brothers Coal Limited - India
- Sindya Power Generating Company Private Ltd
- Ceylon Electricity Board - Sri Lanka
- Kapuas Tunggal Persada - Indonesia
- Bukit Makmur.PT - Indonesia
- Toyota Tsusho Corporation, Japan
- White Energy Company Limited
- Bahari Cakrawala Sebuku - Indonesia
- Uttam Galva Steels Limited - India
- PNOC Exploration Corporation - Philippines
- Metalloyd Limited - United Kingdom
- Lanco Infratech Ltd - India
- Ind-Barath Power Infra Limited - India
- Manunggal Multi Energi - Indonesia
- Indo Tambangraya Megah - Indonesia
- Meralco Power Generation, Philippines
- Billiton Holdings Pty Ltd - Australia
- TNB Fuel Sdn Bhd - Malaysia
- Goldman Sachs - Singapore
- Georgia Ports Authority, United States
- Bangladesh Power Developement Board
- Bhatia International Limited - India
- Savvy Resources Ltd - HongKong
- International Coal Ventures Pvt Ltd - India
- Edison Trading Spa - Italy
- Coastal Gujarat Power Limited - India
- Meenaskhi Energy Private Limited - India
- South Luzon Thermal Energy Corporation
- Chamber of Mines of South Africa
- IEA Clean Coal Centre - UK
- Semirara Mining and Power Corporation, Philippines
- European Bulk Services B.V. - Netherlands
- Jaiprakash Power Ventures ltd
- Larsen & Toubro Limited - India
- Dalmia Cement Bharat India
- SMG Consultants - Indonesia
- Electricity Authority, New Zealand
- Merrill Lynch Commodities Europe
- Ministry of Mines - Canada
- Leighton Contractors Pty Ltd - Australia
- Carbofer General Trading SA - India
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Africa Commodities Group - South Africa
- Renaissance Capital - South Africa
- Bhushan Steel Limited - India
- Standard Chartered Bank - UAE
- Riau Bara Harum - Indonesia
- Banpu Public Company Limited - Thailand
- Mjunction Services Limited - India
- Maharashtra Electricity Regulatory Commission - India
- Cigading International Bulk Terminal - Indonesia
- ICICI Bank Limited - India
- Barasentosa Lestari - Indonesia
- Planning Commission, India
- Aditya Birla Group - India
- ASAPP Information Group - India
- GVK Power & Infra Limited - India
- Parry Sugars Refinery, India
- The University of Queensland
- Oldendorff Carriers - Singapore
- Globalindo Alam Lestari - Indonesia
- Vedanta Resources Plc - India
- PTC India Limited - India
- VISA Power Limited - India
- New Zealand Coal & Carbon
- Kartika Selabumi Mining - Indonesia
- Kalimantan Lumbung Energi - Indonesia
- Heidelberg Cement - Germany
- Makarim & Taira - Indonesia
- Australian Coal Association
- Timah Investasi Mineral - Indoneisa
- Offshore Bulk Terminal Pte Ltd, Singapore
- Anglo American - United Kingdom
- Central Java Power - Indonesia
- Altura Mining Limited, Indonesia
- Ambuja Cements Ltd - India
- Agrawal Coal Company - India
- Thai Mozambique Logistica
- Krishnapatnam Port Company Ltd. - India
- MS Steel International - UAE
- Minerals Council of Australia
- Simpson Spence & Young - Indonesia
- Interocean Group of Companies - India
- Kideco Jaya Agung - Indonesia
- Parliament of New Zealand
- London Commodity Brokers - England
- Borneo Indobara - Indonesia
- Directorate General of MIneral and Coal - Indonesia
- Cement Manufacturers Association - India
- Romanian Commodities Exchange
- Central Electricity Authority - India
- Economic Council, Georgia
- Rashtriya Ispat Nigam Limited - India
- Latin American Coal - Colombia
- Indogreen Group - Indonesia
- Indian Energy Exchange, India
- Baramulti Group, Indonesia
- Star Paper Mills Limited - India
- San Jose City I Power Corp, Philippines
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Independent Power Producers Association of India
- Therma Luzon, Inc, Philippines
- Iligan Light & Power Inc, Philippines
- Formosa Plastics Group - Taiwan
- Kobexindo Tractors - Indoneisa
- Samtan Co., Ltd - South Korea
- Karaikal Port Pvt Ltd - India
- Wood Mackenzie - Singapore
- Bukit Asam (Persero) Tbk - Indonesia
- CNBM International Corporation - China
- Singapore Mercantile Exchange
- Alfred C Toepfer International GmbH - Germany
- IHS Mccloskey Coal Group - USA
- Kaltim Prima Coal - Indonesia
- Miang Besar Coal Terminal - Indonesia
- Asmin Koalindo Tuhup - Indonesia
- Salva Resources Pvt Ltd - India
- Energy Development Corp, Philippines
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Price Waterhouse Coopers - Russia
- SMC Global Power, Philippines
- The State Trading Corporation of India Ltd
- Thiess Contractors Indonesia
- Coalindo Energy - Indonesia
- Semirara Mining Corp, Philippines
- McConnell Dowell - Australia
- Sarangani Energy Corporation, Philippines
- The Treasury - Australian Government
- Eastern Energy - Thailand
- Energy Link Ltd, New Zealand
- Sakthi Sugars Limited - India
- Trasteel International SA, Italy
- Videocon Industries ltd - India
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Vijayanagar Sugar Pvt Ltd - India
- Kumho Petrochemical, South Korea
- Global Green Power PLC Corporation, Philippines
- Mintek Dendrill Indonesia
- Aboitiz Power Corporation - Philippines
- Ministry of Finance - Indonesia
- Bukit Baiduri Energy - Indonesia
- GAC Shipping (India) Pvt Ltd
- Gujarat Electricity Regulatory Commission - India
- Pipit Mutiara Jaya. PT, Indonesia
- Posco Energy - South Korea
- Xindia Steels Limited - India
- SN Aboitiz Power Inc, Philippines
- Pendopo Energi Batubara - Indonesia
- Gujarat Sidhee Cement - India
- Petron Corporation, Philippines
- Eastern Coal Council - USA
- Deloitte Consulting - India
- Siam City Cement PLC, Thailand
- Rio Tinto Coal - Australia
- Jorong Barutama Greston.PT - Indonesia
- Australian Commodity Traders Exchange
- Commonwealth Bank - Australia
- Bhoruka Overseas - Indonesia
- Bharathi Cement Corporation - India
- India Bulls Power Limited - India
- Mercator Lines Limited - India
- Jindal Steel & Power Ltd - India
- PetroVietnam Power Coal Import and Supply Company
- Karbindo Abesyapradhi - Indoneisa
- Indonesian Coal Mining Association
- Bayan Resources Tbk. - Indonesia
- Gujarat Mineral Development Corp Ltd - India
- Kohat Cement Company Ltd. - Pakistan
- Grasim Industreis Ltd - India
- Malabar Cements Ltd - India
- AsiaOL BioFuels Corp., Philippines
- Petrochimia International Co. Ltd.- Taiwan
- GMR Energy Limited - India
- Bulk Trading Sa - Switzerland
- Global Business Power Corporation, Philippines
- Essar Steel Hazira Ltd - India
- Madhucon Powers Ltd - India
- Tata Chemicals Ltd - India
- Coal and Oil Company - UAE
- Orica Australia Pty. Ltd.
- TeaM Sual Corporation - Philippines
- Chettinad Cement Corporation Ltd - India
- GN Power Mariveles Coal Plant, Philippines
- Neyveli Lignite Corporation Ltd, - India
- Mercuria Energy - Indonesia
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