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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, 19 July 22
DRY BULK MARKET: CAPESIZE MARKET FIRMS THIS WEEK - BALTIC EXCHANGE
Capesize
Firmer sentiment across both basins pushed the Capesize 5TC route average above the $20,000 threshold this week, closing at $24,209. A ...
Tuesday, 19 July 22
WHY SHIPPING MIGHT BE ABOUT TO GET A LITTLE BIT SLOWER - WORLD ECONOMIC FORUM
If shipping is the beating heart of global trade, its pulse is about to get slower.
Faced with uncertainty about which fuels to use in the long ...
Tuesday, 19 July 22
GERMANY'S INCREASED COAL, OIL USE WILL BE TEMPORARY, SCHOLZ SAYS - CNBC
Chancellor Olaf Scholz says Germany’s decision to reactivate coal and oil-fired power plants to relieve energy shortages because of the war i ...
Tuesday, 19 July 22
INDONESIA REMOVES PALM OIL EXPORT LEVY UNTIL AUG. 31 - REUTERS
Indonesia has scrapped its export levy for all palm oil products until Aug. 31 in a fresh attempt to boost exports and ease high inventories, finan ...
Tuesday, 19 July 22
CHINA'S JUNE DAILY COAL OUTPUT JUMPS ON PEAK SUMMER DEMAND - REUTERS
China’s daily coal output in June rose 6.6 per cent from a month earlier as miners cranked up output ahead of peak summer temperatures, when ...
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- Krishnapatnam Port Company Ltd. - India
- Australian Coal Association
- Tamil Nadu electricity Board
- South Luzon Thermal Energy Corporation
- Indian Energy Exchange, India
- Global Coal Blending Company Limited - Australia
- Ind-Barath Power Infra Limited - India
- Meralco Power Generation, Philippines
- Semirara Mining and Power Corporation, Philippines
- Wood Mackenzie - Singapore
- Bukit Baiduri Energy - Indonesia
- Karbindo Abesyapradhi - Indoneisa
- Carbofer General Trading SA - India
- GAC Shipping (India) Pvt Ltd
- Grasim Industreis Ltd - India
- Power Finance Corporation Ltd., India
- Siam City Cement - Thailand
- Standard Chartered Bank - UAE
- Binh Thuan Hamico - Vietnam
- Dalmia Cement Bharat India
- Therma Luzon, Inc, Philippines
- Cigading International Bulk Terminal - Indonesia
- Asmin Koalindo Tuhup - Indonesia
- Kepco SPC Power Corporation, Philippines
- SMG Consultants - Indonesia
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Singapore Mercantile Exchange
- Directorate Of Revenue Intelligence - India
- Essar Steel Hazira Ltd - India
- Commonwealth Bank - Australia
- Gujarat Mineral Development Corp Ltd - India
- Bhatia International Limited - India
- TNB Fuel Sdn Bhd - Malaysia
- GN Power Mariveles Coal Plant, Philippines
- Bhoruka Overseas - Indonesia
- Antam Resourcindo - Indonesia
- Pipit Mutiara Jaya. PT, Indonesia
- IHS Mccloskey Coal Group - USA
- ICICI Bank Limited - India
- Jorong Barutama Greston.PT - Indonesia
- Coastal Gujarat Power Limited - India
- GVK Power & Infra Limited - India
- Renaissance Capital - South Africa
- Sindya Power Generating Company Private Ltd
- Tata Chemicals Ltd - India
- Bank of Tokyo Mitsubishi UFJ Ltd
- Maharashtra Electricity Regulatory Commission - India
- Manunggal Multi Energi - Indonesia
- PNOC Exploration Corporation - Philippines
- Uttam Galva Steels Limited - India
- Medco Energi Mining Internasional
- Savvy Resources Ltd - HongKong
- Intertek Mineral Services - Indonesia
- Videocon Industries ltd - India
- SMC Global Power, Philippines
- Directorate General of MIneral and Coal - Indonesia
- Sakthi Sugars Limited - India
- Ministry of Mines - Canada
- Petron Corporation, Philippines
- European Bulk Services B.V. - Netherlands
- Anglo American - United Kingdom
- The State Trading Corporation of India Ltd
- CIMB Investment Bank - Malaysia
- McConnell Dowell - Australia
- Toyota Tsusho Corporation, Japan
- Mercator Lines Limited - India
- Sojitz Corporation - Japan
- Bahari Cakrawala Sebuku - Indonesia
- Baramulti Group, Indonesia
- Aboitiz Power Corporation - Philippines
- Kideco Jaya Agung - Indonesia
- Barasentosa Lestari - Indonesia
- The Treasury - Australian Government
- Kaltim Prima Coal - Indonesia
- Petrochimia International Co. Ltd.- Taiwan
- Romanian Commodities Exchange
- Planning Commission, India
- Deloitte Consulting - India
- AsiaOL BioFuels Corp., Philippines
- Iligan Light & Power Inc, Philippines
- Wilmar Investment Holdings
- Mintek Dendrill Indonesia
- Orica Mining Services - Indonesia
- Jindal Steel & Power Ltd - India
- Sical Logistics Limited - India
- Larsen & Toubro Limited - India
- Economic Council, Georgia
- Globalindo Alam Lestari - Indonesia
- Meenaskhi Energy Private Limited - India
- LBH Netherlands Bv - Netherlands
- Mjunction Services Limited - India
- Bhushan Steel Limited - India
- Coalindo Energy - Indonesia
- Goldman Sachs - Singapore
- Parry Sugars Refinery, India
- Vizag Seaport Private Limited - India
- Edison Trading Spa - Italy
- International Coal Ventures Pvt Ltd - India
- Simpson Spence & Young - Indonesia
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Coal and Oil Company - UAE
- IEA Clean Coal Centre - UK
- Indo Tambangraya Megah - Indonesia
- Bulk Trading Sa - Switzerland
- Billiton Holdings Pty Ltd - Australia
- Agrawal Coal Company - India
- The University of Queensland
- Attock Cement Pakistan Limited
- Kobexindo Tractors - Indoneisa
- Thiess Contractors Indonesia
- Kohat Cement Company Ltd. - Pakistan
- Port Waratah Coal Services - Australia
- Straits Asia Resources Limited - Singapore
- Energy Development Corp, Philippines
- Electricity Generating Authority of Thailand
- Maheswari Brothers Coal Limited - India
- Riau Bara Harum - Indonesia
- Thai Mozambique Logistica
- Timah Investasi Mineral - Indoneisa
- Kumho Petrochemical, South Korea
- Borneo Indobara - Indonesia
- Cement Manufacturers Association - India
- CNBM International Corporation - China
- Bharathi Cement Corporation - India
- Parliament of New Zealand
- Indian Oil Corporation Limited
- Bayan Resources Tbk. - Indonesia
- Star Paper Mills Limited - India
- Oldendorff Carriers - Singapore
- Marubeni Corporation - India
- Ministry of Finance - Indonesia
- SN Aboitiz Power Inc, Philippines
- Global Business Power Corporation, Philippines
- Minerals Council of Australia
- Gujarat Sidhee Cement - India
- San Jose City I Power Corp, Philippines
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Bukit Asam (Persero) Tbk - Indonesia
- Bangladesh Power Developement Board
- Formosa Plastics Group - Taiwan
- Ministry of Transport, Egypt
- Ambuja Cements Ltd - India
- Banpu Public Company Limited - Thailand
- Sree Jayajothi Cements Limited - India
- India Bulls Power Limited - India
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Neyveli Lignite Corporation Ltd, - India
- Chamber of Mines of South Africa
- Semirara Mining Corp, Philippines
- Central Electricity Authority - India
- Salva Resources Pvt Ltd - India
- GMR Energy Limited - India
- Heidelberg Cement - Germany
- Price Waterhouse Coopers - Russia
- Pendopo Energi Batubara - Indonesia
- Bukit Makmur.PT - Indonesia
- Makarim & Taira - Indonesia
- OPG Power Generation Pvt Ltd - India
- Posco Energy - South Korea
- Mercuria Energy - Indonesia
- Global Green Power PLC Corporation, Philippines
- Georgia Ports Authority, United States
- Miang Besar Coal Terminal - Indonesia
- Chettinad Cement Corporation Ltd - India
- Indika Energy - Indonesia
- Energy Link Ltd, New Zealand
- Central Java Power - Indonesia
- Metalloyd Limited - United Kingdom
- Lanco Infratech Ltd - India
- Sinarmas Energy and Mining - Indonesia
- ASAPP Information Group - India
- Karaikal Port Pvt Ltd - India
- Vedanta Resources Plc - India
- Merrill Lynch Commodities Europe
- Rashtriya Ispat Nigam Limited - India
- Gujarat Electricity Regulatory Commission - India
- Leighton Contractors Pty Ltd - Australia
- Xindia Steels Limited - India
- Holcim Trading Pte Ltd - Singapore
- MS Steel International - UAE
- VISA Power Limited - India
- Vijayanagar Sugar Pvt Ltd - India
- Ceylon Electricity Board - Sri Lanka
- Sarangani Energy Corporation, Philippines
- Samtan Co., Ltd - South Korea
- Kalimantan Lumbung Energi - Indonesia
- Siam City Cement PLC, Thailand
- Eastern Energy - Thailand
- Orica Australia Pty. Ltd.
- Interocean Group of Companies - India
- Trasteel International SA, Italy
- Altura Mining Limited, Indonesia
- PetroVietnam Power Coal Import and Supply Company
- Africa Commodities Group - South Africa
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Jaiprakash Power Ventures ltd
- Indogreen Group - Indonesia
- Independent Power Producers Association of India
- Indonesian Coal Mining Association
- White Energy Company Limited
- Rio Tinto Coal - Australia
- Kartika Selabumi Mining - Indonesia
- Australian Commodity Traders Exchange
- PowerSource Philippines DevCo
- London Commodity Brokers - England
- Kapuas Tunggal Persada - Indonesia
- TeaM Sual Corporation - Philippines
- Eastern Coal Council - USA
- Aditya Birla Group - India
- Offshore Bulk Terminal Pte Ltd, Singapore
- PTC India Limited - India
- Madhucon Powers Ltd - India
- Malabar Cements Ltd - India
- Electricity Authority, New Zealand
- New Zealand Coal & Carbon
- Alfred C Toepfer International GmbH - Germany
- Latin American Coal - Colombia
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