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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 $500/t range. While HSFO markets in Asia have been weakening on the back of sanctions on Urals crude in Europe and the US, VLSFO markets are seeing a tight supply as refineries have been utilizing sweeter crude to maximize gasoline production to meet the demand for the peak driving season in the US and due to the expanded regional turnaround and strong gasoline cracks.
At the moment, retrofitting times vary between 30 and 50 days, which is important to consider under the current market conditions. According to our data, retrofits now take place at a slower pace, while during 1H of 2022 only 3.7% of newbuilt vessels are scrubber fitted, compared to 13.9% during 1H of 2021. Since investments in technology are capital intensive, owners tend to keep a more conservative stance and ensure a balance in their fleets, until clarity is given on what will be the most cost-efficient and dominant compliant method.
By Chara Georgousi,
Research Analyst
Compiled by:
Intermodal Research & Valuations
Analysts:
Yiannis Parganas
Tamara Apostolou
Disclaimer and legal disclosure: For any further queries please do not hesitate to contact our Research & Valuations Department. The information contained in this report has been obtained from various sources, as reported in the market. Intermodal Shipbrokers Co. believes such information to be factual and reliable without making guarantees regarding its accuracy or completeness. Whilst every care has been taken in the production of the above review, no liability can be accepted for any loss or damage incurred in any way whatsoever by any person who may seek to rely on the information and views contained in this material. This report is being produced for the internal use of the intended recipients only and no reproducing is allowed, without the prior written authorization of Intermodal Shipbrokers Co.
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Friday, 08 July 22
AUSTRALIAN COAL PRICE BREAKS AGAIN LEVEL US$ 400/TON!, UP AROUND 4% - CNBC INDONESIA
Coal prices shot up again and crossed the level of US$ 400 per ton. On Thursday (7/7/2022) trading, the selling price of August contract closed at ...
Friday, 08 July 22
INDONESIA MULLS MORE FREQUENT SETTING OF CRUDE PALM OIL REFERENCE PRICE - REUTERS
Indonesia is considering setting its crude palm oil (CPO) export reference price every two weeks instead of monthly, a senior trade ministry offici ...
Friday, 08 July 22
BUNKER PRICES EXPECTED TO RECOVER LOST GROUND NEXT WEEK - SERGEY IVANOV, MABUX
Over the Week 27, the world bunker indices showed a sharp decline, primarily due to the fall in oil prices on July 05. The 380 HSFO index fell by 5 ...
Thursday, 07 July 22
NTPC MINES 61% MORE COAL AT 4.22 MN METRIC TONNES IN APRIL-JUNE: PTI
State-owned power giant NTPC on Tuesday said that its coal output grew by 61 per cent to Rs 42.40 lakh metric tonnes in April-June quarter from 26. ...
Thursday, 07 July 22
COAL INDIA'S PRODUCTION SETS RECORD INCREASE OF 29% YOY AT 36 MT IN Q1FY23 - IIFL SECURITIES
Coal India Limited (CIL) has ended April-June quarter FY’23 capping a historic high of 29% yoy output growth, compared to same quarter FY&rsq ...
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- Latin American Coal - Colombia
- SMC Global Power, Philippines
- Kideco Jaya Agung - Indonesia
- TeaM Sual Corporation - Philippines
- GAC Shipping (India) Pvt Ltd
- Cement Manufacturers Association - India
- Minerals Council of Australia
- Asmin Koalindo Tuhup - Indonesia
- Ministry of Finance - Indonesia
- AsiaOL BioFuels Corp., Philippines
- Sojitz Corporation - Japan
- TNB Fuel Sdn Bhd - Malaysia
- Therma Luzon, Inc, Philippines
- London Commodity Brokers - England
- Mjunction Services Limited - India
- Global Green Power PLC Corporation, Philippines
- Kumho Petrochemical, South Korea
- Intertek Mineral Services - Indonesia
- White Energy Company Limited
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Bangladesh Power Developement Board
- Deloitte Consulting - India
- Sarangani Energy Corporation, Philippines
- Heidelberg Cement - Germany
- Interocean Group of Companies - India
- Gujarat Sidhee Cement - India
- Xindia Steels Limited - India
- Tamil Nadu electricity Board
- Sical Logistics Limited - India
- Sinarmas Energy and Mining - Indonesia
- Orica Australia Pty. Ltd.
- VISA Power Limited - India
- Vijayanagar Sugar Pvt Ltd - India
- Malabar Cements Ltd - India
- Billiton Holdings Pty Ltd - Australia
- Commonwealth Bank - Australia
- Central Electricity Authority - India
- Oldendorff Carriers - Singapore
- Ministry of Mines - Canada
- Directorate General of MIneral and Coal - Indonesia
- PTC India Limited - India
- Mercuria Energy - Indonesia
- Coal and Oil Company - UAE
- Straits Asia Resources Limited - Singapore
- Edison Trading Spa - Italy
- Carbofer General Trading SA - India
- Attock Cement Pakistan Limited
- Essar Steel Hazira Ltd - India
- Rashtriya Ispat Nigam Limited - India
- Bayan Resources Tbk. - Indonesia
- Semirara Mining and Power Corporation, Philippines
- Standard Chartered Bank - UAE
- Rio Tinto Coal - Australia
- PowerSource Philippines DevCo
- Chettinad Cement Corporation Ltd - India
- Formosa Plastics Group - Taiwan
- India Bulls Power Limited - India
- Anglo American - United Kingdom
- Videocon Industries ltd - India
- Bharathi Cement Corporation - India
- Maharashtra Electricity Regulatory Commission - India
- South Luzon Thermal Energy Corporation
- Parry Sugars Refinery, India
- Iligan Light & Power Inc, Philippines
- Electricity Generating Authority of Thailand
- Semirara Mining Corp, Philippines
- Goldman Sachs - Singapore
- The University of Queensland
- Mintek Dendrill Indonesia
- Wood Mackenzie - Singapore
- Leighton Contractors Pty Ltd - Australia
- Grasim Industreis Ltd - India
- Alfred C Toepfer International GmbH - Germany
- Binh Thuan Hamico - Vietnam
- International Coal Ventures Pvt Ltd - India
- Siam City Cement - Thailand
- SMG Consultants - Indonesia
- Indian Energy Exchange, India
- Tata Chemicals Ltd - India
- Globalindo Alam Lestari - Indonesia
- Mercator Lines Limited - India
- Aboitiz Power Corporation - Philippines
- Siam City Cement PLC, Thailand
- Vedanta Resources Plc - India
- The State Trading Corporation of India Ltd
- Georgia Ports Authority, United States
- Aditya Birla Group - India
- Africa Commodities Group - South Africa
- Electricity Authority, New Zealand
- Thai Mozambique Logistica
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Romanian Commodities Exchange
- IEA Clean Coal Centre - UK
- New Zealand Coal & Carbon
- Bukit Makmur.PT - Indonesia
- Pipit Mutiara Jaya. PT, Indonesia
- Wilmar Investment Holdings
- Parliament of New Zealand
- Coastal Gujarat Power Limited - India
- Petrochimia International Co. Ltd.- Taiwan
- Makarim & Taira - Indonesia
- Jindal Steel & Power Ltd - India
- Kobexindo Tractors - Indoneisa
- Kartika Selabumi Mining - Indonesia
- Eastern Coal Council - USA
- Economic Council, Georgia
- Marubeni Corporation - India
- Meralco Power Generation, Philippines
- Uttam Galva Steels Limited - India
- Chamber of Mines of South Africa
- OPG Power Generation Pvt Ltd - India
- Simpson Spence & Young - Indonesia
- Lanco Infratech Ltd - India
- Bukit Baiduri Energy - Indonesia
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Madhucon Powers Ltd - India
- Kepco SPC Power Corporation, Philippines
- Toyota Tsusho Corporation, Japan
- Miang Besar Coal Terminal - Indonesia
- Krishnapatnam Port Company Ltd. - India
- Energy Development Corp, Philippines
- Coalindo Energy - Indonesia
- Meenaskhi Energy Private Limited - India
- Gujarat Mineral Development Corp Ltd - India
- Port Waratah Coal Services - Australia
- Central Java Power - Indonesia
- Antam Resourcindo - Indonesia
- Jorong Barutama Greston.PT - Indonesia
- Barasentosa Lestari - Indonesia
- GMR Energy Limited - India
- Offshore Bulk Terminal Pte Ltd, Singapore
- Gujarat Electricity Regulatory Commission - India
- Trasteel International SA, Italy
- IHS Mccloskey Coal Group - USA
- Bhushan Steel Limited - India
- Baramulti Group, Indonesia
- Ambuja Cements Ltd - India
- PNOC Exploration Corporation - Philippines
- Jaiprakash Power Ventures ltd
- Dalmia Cement Bharat India
- Savvy Resources Ltd - HongKong
- Timah Investasi Mineral - Indoneisa
- Renaissance Capital - South Africa
- Kalimantan Lumbung Energi - Indonesia
- European Bulk Services B.V. - Netherlands
- Bhatia International Limited - India
- Australian Coal Association
- Indika Energy - Indonesia
- Cigading International Bulk Terminal - Indonesia
- Bahari Cakrawala Sebuku - Indonesia
- Ministry of Transport, Egypt
- Indo Tambangraya Megah - Indonesia
- Singapore Mercantile Exchange
- Maheswari Brothers Coal Limited - India
- Sindya Power Generating Company Private Ltd
- MS Steel International - UAE
- Eastern Energy - Thailand
- Salva Resources Pvt Ltd - India
- Sree Jayajothi Cements Limited - India
- Samtan Co., Ltd - South Korea
- Posco Energy - South Korea
- Indonesian Coal Mining Association
- Pendopo Energi Batubara - Indonesia
- Bhoruka Overseas - Indonesia
- Thiess Contractors Indonesia
- Planning Commission, India
- ICICI Bank Limited - India
- Bulk Trading Sa - Switzerland
- Agrawal Coal Company - India
- Karaikal Port Pvt Ltd - India
- GN Power Mariveles Coal Plant, Philippines
- Metalloyd Limited - United Kingdom
- LBH Netherlands Bv - Netherlands
- Power Finance Corporation Ltd., India
- Merrill Lynch Commodities Europe
- Global Coal Blending Company Limited - Australia
- Indian Oil Corporation Limited
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Global Business Power Corporation, Philippines
- Ind-Barath Power Infra Limited - India
- Neyveli Lignite Corporation Ltd, - India
- ASAPP Information Group - India
- CIMB Investment Bank - Malaysia
- Medco Energi Mining Internasional
- Energy Link Ltd, New Zealand
- Riau Bara Harum - Indonesia
- Indogreen Group - Indonesia
- Altura Mining Limited, Indonesia
- Australian Commodity Traders Exchange
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Sakthi Sugars Limited - India
- Larsen & Toubro Limited - India
- Independent Power Producers Association of India
- CNBM International Corporation - China
- Ceylon Electricity Board - Sri Lanka
- Vizag Seaport Private Limited - India
- Kohat Cement Company Ltd. - Pakistan
- San Jose City I Power Corp, Philippines
- Borneo Indobara - Indonesia
- Banpu Public Company Limited - Thailand
- Holcim Trading Pte Ltd - Singapore
- Karbindo Abesyapradhi - Indoneisa
- Kapuas Tunggal Persada - Indonesia
- Directorate Of Revenue Intelligence - India
- Manunggal Multi Energi - Indonesia
- Bukit Asam (Persero) Tbk - Indonesia
- PetroVietnam Power Coal Import and Supply Company
- Star Paper Mills Limited - India
- Orica Mining Services - Indonesia
- SN Aboitiz Power Inc, Philippines
- McConnell Dowell - Australia
- Petron Corporation, Philippines
- GVK Power & Infra Limited - India
- The Treasury - Australian Government
- Price Waterhouse Coopers - Russia
- Kaltim Prima Coal - Indonesia
- Bank of Tokyo Mitsubishi UFJ Ltd
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