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