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