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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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Tuesday, 19 July 22
SEEING RED? - WOOD MACKENZIE
What a Republican mid-term victory could mean for US energy and climate policy
According to current polling the Republican Party has ...
Thursday, 14 July 22
INDIA'S COAL IMPORTS HIT RECORD HIGH IN JUNE - REUTERS
India's coal imports hit a record high in June despite high global prices, data from three trade sources and Refinitiv ship tracking showed, as ...
Thursday, 14 July 22
CHINA'S JUNE COAL IMPORTS SLUMP AS TRADERS SHUN EXPENSIVE OVERSEAS CARGOES - REUTERS
China’s coal imports fell 33% in June from a year ago, with traders turning down expensive overseas cargoes in favor of domestic ones with ca ...
Wednesday, 13 July 22
KOWEPO TO IMPORT 2.79 MILLION TONS OF LOW TO MEDIUM COAL
COALspot.com: Korea Western Power Co., Ltd. (KOWEPO) has issued an International tender for Total 1360k MT of Min.4400 kcal/kg NCV coal and Total 1 ...
Wednesday, 13 July 22
HAVE MINERS MISSED THE BOAT TO INVEST AND GET AHEAD OF THE ENERGY TRANSITION? - WOOD MACKENZIE
Miners are in rude health, benefiting from economic stimuli, the post-pandemic recovery and associated supply constraints. Initially the Ukraine wa ...
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- Toyota Tsusho Corporation, Japan
- Timah Investasi Mineral - Indoneisa
- Bhushan Steel Limited - India
- Barasentosa Lestari - Indonesia
- Mjunction Services Limited - India
- Romanian Commodities Exchange
- Deloitte Consulting - India
- Therma Luzon, Inc, Philippines
- Holcim Trading Pte Ltd - Singapore
- Pendopo Energi Batubara - Indonesia
- Minerals Council of Australia
- Kumho Petrochemical, South Korea
- Bhatia International Limited - India
- Sindya Power Generating Company Private Ltd
- Sical Logistics Limited - India
- Latin American Coal - Colombia
- Karaikal Port Pvt Ltd - India
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Offshore Bulk Terminal Pte Ltd, Singapore
- Gujarat Sidhee Cement - India
- Parry Sugars Refinery, India
- Alfred C Toepfer International GmbH - Germany
- Banpu Public Company Limited - Thailand
- Malabar Cements Ltd - India
- Vijayanagar Sugar Pvt Ltd - India
- Savvy Resources Ltd - HongKong
- South Luzon Thermal Energy Corporation
- Coalindo Energy - Indonesia
- Videocon Industries ltd - India
- Larsen & Toubro Limited - India
- AsiaOL BioFuels Corp., Philippines
- PowerSource Philippines DevCo
- Sakthi Sugars Limited - India
- San Jose City I Power Corp, Philippines
- Sinarmas Energy and Mining - Indonesia
- Commonwealth Bank - Australia
- Renaissance Capital - South Africa
- CIMB Investment Bank - Malaysia
- Karbindo Abesyapradhi - Indoneisa
- Port Waratah Coal Services - Australia
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- ASAPP Information Group - India
- Globalindo Alam Lestari - Indonesia
- Bulk Trading Sa - Switzerland
- Ceylon Electricity Board - Sri Lanka
- European Bulk Services B.V. - Netherlands
- Wood Mackenzie - Singapore
- Mercuria Energy - Indonesia
- Ministry of Transport, Egypt
- Pipit Mutiara Jaya. PT, Indonesia
- Carbofer General Trading SA - India
- Star Paper Mills Limited - India
- Makarim & Taira - Indonesia
- Semirara Mining Corp, Philippines
- Straits Asia Resources Limited - Singapore
- Riau Bara Harum - Indonesia
- Price Waterhouse Coopers - Russia
- Jindal Steel & Power Ltd - India
- Petron Corporation, Philippines
- GN Power Mariveles Coal Plant, Philippines
- Maharashtra Electricity Regulatory Commission - India
- Bank of Tokyo Mitsubishi UFJ Ltd
- Siam City Cement - Thailand
- Kideco Jaya Agung - Indonesia
- Jaiprakash Power Ventures ltd
- Aditya Birla Group - India
- Marubeni Corporation - India
- Indian Energy Exchange, India
- Posco Energy - South Korea
- Bharathi Cement Corporation - India
- TeaM Sual Corporation - Philippines
- Ind-Barath Power Infra Limited - India
- IEA Clean Coal Centre - UK
- Chettinad Cement Corporation Ltd - India
- Kaltim Prima Coal - Indonesia
- Parliament of New Zealand
- The State Trading Corporation of India Ltd
- Altura Mining Limited, Indonesia
- Lanco Infratech Ltd - India
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- IHS Mccloskey Coal Group - USA
- Agrawal Coal Company - India
- Interocean Group of Companies - India
- Trasteel International SA, Italy
- Coal and Oil Company - UAE
- VISA Power Limited - India
- Edison Trading Spa - Italy
- PetroVietnam Power Coal Import and Supply Company
- Global Green Power PLC Corporation, Philippines
- Indika Energy - Indonesia
- Kapuas Tunggal Persada - Indonesia
- Kalimantan Lumbung Energi - Indonesia
- CNBM International Corporation - China
- Sree Jayajothi Cements Limited - India
- Cigading International Bulk Terminal - Indonesia
- Cement Manufacturers Association - India
- Oldendorff Carriers - Singapore
- Bhoruka Overseas - Indonesia
- Heidelberg Cement - Germany
- Australian Commodity Traders Exchange
- Ministry of Finance - Indonesia
- Orica Australia Pty. Ltd.
- GAC Shipping (India) Pvt Ltd
- Bahari Cakrawala Sebuku - Indonesia
- Dalmia Cement Bharat India
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- GVK Power & Infra Limited - India
- SMG Consultants - Indonesia
- Essar Steel Hazira Ltd - India
- India Bulls Power Limited - India
- Leighton Contractors Pty Ltd - Australia
- SMC Global Power, Philippines
- Simpson Spence & Young - Indonesia
- Bukit Makmur.PT - Indonesia
- Tata Chemicals Ltd - India
- OPG Power Generation Pvt Ltd - India
- Meenaskhi Energy Private Limited - India
- MS Steel International - UAE
- Energy Development Corp, Philippines
- PNOC Exploration Corporation - Philippines
- Grasim Industreis Ltd - India
- Australian Coal Association
- LBH Netherlands Bv - Netherlands
- Madhucon Powers Ltd - India
- Attock Cement Pakistan Limited
- Manunggal Multi Energi - Indonesia
- White Energy Company Limited
- Bukit Baiduri Energy - Indonesia
- Bukit Asam (Persero) Tbk - Indonesia
- Vizag Seaport Private Limited - India
- Neyveli Lignite Corporation Ltd, - India
- Medco Energi Mining Internasional
- TNB Fuel Sdn Bhd - Malaysia
- McConnell Dowell - Australia
- Anglo American - United Kingdom
- Sarangani Energy Corporation, Philippines
- Aboitiz Power Corporation - Philippines
- Binh Thuan Hamico - Vietnam
- Kartika Selabumi Mining - Indonesia
- Africa Commodities Group - South Africa
- Georgia Ports Authority, United States
- Chamber of Mines of South Africa
- New Zealand Coal & Carbon
- Electricity Generating Authority of Thailand
- Salva Resources Pvt Ltd - India
- Thai Mozambique Logistica
- Orica Mining Services - Indonesia
- Merrill Lynch Commodities Europe
- Directorate Of Revenue Intelligence - India
- Maheswari Brothers Coal Limited - India
- Goldman Sachs - Singapore
- Metalloyd Limited - United Kingdom
- PTC India Limited - India
- Billiton Holdings Pty Ltd - Australia
- Samtan Co., Ltd - South Korea
- Vedanta Resources Plc - India
- Kobexindo Tractors - Indoneisa
- Power Finance Corporation Ltd., India
- Global Business Power Corporation, Philippines
- Gujarat Mineral Development Corp Ltd - India
- Kohat Cement Company Ltd. - Pakistan
- Bangladesh Power Developement Board
- Ministry of Mines - Canada
- Eastern Coal Council - USA
- Rio Tinto Coal - Australia
- The Treasury - Australian Government
- Indian Oil Corporation Limited
- Rashtriya Ispat Nigam Limited - India
- Jorong Barutama Greston.PT - Indonesia
- Central Java Power - Indonesia
- Wilmar Investment Holdings
- Baramulti Group, Indonesia
- Mintek Dendrill Indonesia
- Thiess Contractors Indonesia
- Mercator Lines Limited - India
- Xindia Steels Limited - India
- Borneo Indobara - Indonesia
- Miang Besar Coal Terminal - Indonesia
- SN Aboitiz Power Inc, Philippines
- Gujarat Electricity Regulatory Commission - India
- Singapore Mercantile Exchange
- Intertek Mineral Services - Indonesia
- ICICI Bank Limited - India
- Indogreen Group - Indonesia
- Bayan Resources Tbk. - Indonesia
- Coastal Gujarat Power Limited - India
- Antam Resourcindo - Indonesia
- Electricity Authority, New Zealand
- Asmin Koalindo Tuhup - Indonesia
- Formosa Plastics Group - Taiwan
- Uttam Galva Steels Limited - India
- Economic Council, Georgia
- Indo Tambangraya Megah - Indonesia
- Petrochimia International Co. Ltd.- Taiwan
- Siam City Cement PLC, Thailand
- Ambuja Cements Ltd - India
- Sojitz Corporation - Japan
- Tamil Nadu electricity Board
- Directorate General of MIneral and Coal - Indonesia
- Iligan Light & Power Inc, Philippines
- Krishnapatnam Port Company Ltd. - India
- Planning Commission, India
- Energy Link Ltd, New Zealand
- London Commodity Brokers - England
- Eastern Energy - Thailand
- Independent Power Producers Association of India
- Indonesian Coal Mining Association
- International Coal Ventures Pvt Ltd - India
- Global Coal Blending Company Limited - Australia
- Semirara Mining and Power Corporation, Philippines
- Central Electricity Authority - India
- The University of Queensland
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Standard Chartered Bank - UAE
- Meralco Power Generation, Philippines
- GMR Energy Limited - India
- Kepco SPC Power Corporation, Philippines
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