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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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Wednesday, 06 July 22
MARKET INSIGHT - INTERMODAL
Following the 3rd Decarbonizing Shipping Forum, held in Hamburg on June 2022, there has been a meaningful resurgence of discussions within the ship ...
Tuesday, 05 July 22
WHY ARE VLSFO PRICES SO HIGH, ESPECIALLY IN SINGAPORE? - STEVE CHRISTY, INTEGR8 FUELS
Tightness in products still trumps talks of recession
Last month we wrote about the fears of recession versus the tightness in product markets ...
Tuesday, 05 July 22
ADANI ENTERPRISES LOWEST BIDDER IN COAL INDIA'S IMPORT TENDER: REPORT - BUSINESS STANDARD
Coal India Ltd floated its first import tender on behalf of power companies, where Adani Enterprises Ltd came out to be the lowest bidder, a report ...
Tuesday, 05 July 22
CHINA POLICY KEY FOR IRON ORE OUTLOOK - ING
China’s covid lockdowns and recessionary risks hit iron ore
Iron ore prices have fallen significantly from their year-to-date high of US$ ...
Monday, 04 July 22
INDONESIAN COAL PRICE REFERENCE SLIGHTLY DOWN IN JULY
COALspot.com: Indonesian Coal Price Reference for July delivery drops 1.52 per cent month on month.
The Indonesian Coal Price Refere ...
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- PowerSource Philippines DevCo
- Electricity Authority, New Zealand
- Tata Chemicals Ltd - India
- Kaltim Prima Coal - Indonesia
- IEA Clean Coal Centre - UK
- Indogreen Group - Indonesia
- Petrochimia International Co. Ltd.- Taiwan
- Cement Manufacturers Association - India
- Globalindo Alam Lestari - Indonesia
- Bukit Makmur.PT - Indonesia
- Mjunction Services Limited - India
- Kepco SPC Power Corporation, Philippines
- Meralco Power Generation, Philippines
- Kapuas Tunggal Persada - Indonesia
- Iligan Light & Power Inc, Philippines
- San Jose City I Power Corp, Philippines
- McConnell Dowell - Australia
- ICICI Bank Limited - India
- Eastern Coal Council - USA
- Salva Resources Pvt Ltd - India
- The State Trading Corporation of India Ltd
- Indonesian Coal Mining Association
- Energy Development Corp, Philippines
- GAC Shipping (India) Pvt Ltd
- Samtan Co., Ltd - South Korea
- Ministry of Transport, Egypt
- SMC Global Power, Philippines
- Independent Power Producers Association of India
- Siam City Cement - Thailand
- Planning Commission, India
- Australian Commodity Traders Exchange
- Antam Resourcindo - Indonesia
- Bayan Resources Tbk. - Indonesia
- Attock Cement Pakistan Limited
- Barasentosa Lestari - Indonesia
- Makarim & Taira - Indonesia
- The University of Queensland
- Pendopo Energi Batubara - Indonesia
- Aditya Birla Group - India
- SN Aboitiz Power Inc, Philippines
- PetroVietnam Power Coal Import and Supply Company
- Meenaskhi Energy Private Limited - India
- Bahari Cakrawala Sebuku - Indonesia
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Rashtriya Ispat Nigam Limited - India
- Kideco Jaya Agung - Indonesia
- Asmin Koalindo Tuhup - Indonesia
- Sarangani Energy Corporation, Philippines
- Karaikal Port Pvt Ltd - India
- Bangladesh Power Developement Board
- Wilmar Investment Holdings
- White Energy Company Limited
- Bhushan Steel Limited - India
- Indian Oil Corporation Limited
- GVK Power & Infra Limited - India
- European Bulk Services B.V. - Netherlands
- Indika Energy - Indonesia
- Timah Investasi Mineral - Indoneisa
- Offshore Bulk Terminal Pte Ltd, Singapore
- Holcim Trading Pte Ltd - Singapore
- Parry Sugars Refinery, India
- International Coal Ventures Pvt Ltd - India
- Gujarat Electricity Regulatory Commission - India
- Trasteel International SA, Italy
- Global Green Power PLC Corporation, Philippines
- Orica Mining Services - Indonesia
- Grasim Industreis Ltd - India
- Metalloyd Limited - United Kingdom
- Maheswari Brothers Coal Limited - India
- Vedanta Resources Plc - India
- Kohat Cement Company Ltd. - Pakistan
- Jorong Barutama Greston.PT - Indonesia
- Baramulti Group, Indonesia
- Manunggal Multi Energi - Indonesia
- Coalindo Energy - Indonesia
- Savvy Resources Ltd - HongKong
- Singapore Mercantile Exchange
- Binh Thuan Hamico - Vietnam
- Straits Asia Resources Limited - Singapore
- Mercator Lines Limited - India
- Dalmia Cement Bharat India
- Agrawal Coal Company - India
- Standard Chartered Bank - UAE
- Posco Energy - South Korea
- Billiton Holdings Pty Ltd - Australia
- Ambuja Cements Ltd - India
- Merrill Lynch Commodities Europe
- Bukit Baiduri Energy - Indonesia
- Latin American Coal - Colombia
- Aboitiz Power Corporation - Philippines
- GMR Energy Limited - India
- CIMB Investment Bank - Malaysia
- Price Waterhouse Coopers - Russia
- Lanco Infratech Ltd - India
- Ceylon Electricity Board - Sri Lanka
- Marubeni Corporation - India
- LBH Netherlands Bv - Netherlands
- PTC India Limited - India
- Bhoruka Overseas - Indonesia
- Star Paper Mills Limited - India
- Australian Coal Association
- Sinarmas Energy and Mining - Indonesia
- London Commodity Brokers - England
- Altura Mining Limited, Indonesia
- Videocon Industries ltd - India
- Chamber of Mines of South Africa
- Gujarat Mineral Development Corp Ltd - India
- Minerals Council of Australia
- Renaissance Capital - South Africa
- Deloitte Consulting - India
- TNB Fuel Sdn Bhd - Malaysia
- OPG Power Generation Pvt Ltd - India
- Formosa Plastics Group - Taiwan
- Larsen & Toubro Limited - India
- Banpu Public Company Limited - Thailand
- Cigading International Bulk Terminal - Indonesia
- Port Waratah Coal Services - Australia
- Mintek Dendrill Indonesia
- Leighton Contractors Pty Ltd - Australia
- Eastern Energy - Thailand
- Maharashtra Electricity Regulatory Commission - India
- Heidelberg Cement - Germany
- Intertek Mineral Services - Indonesia
- Toyota Tsusho Corporation, Japan
- IHS Mccloskey Coal Group - USA
- Alfred C Toepfer International GmbH - Germany
- Edison Trading Spa - Italy
- Sical Logistics Limited - India
- Power Finance Corporation Ltd., India
- Sree Jayajothi Cements Limited - India
- Ministry of Finance - Indonesia
- Interocean Group of Companies - India
- Sakthi Sugars Limited - India
- AsiaOL BioFuels Corp., Philippines
- Global Coal Blending Company Limited - Australia
- Parliament of New Zealand
- Directorate General of MIneral and Coal - Indonesia
- Medco Energi Mining Internasional
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Ministry of Mines - Canada
- Coal and Oil Company - UAE
- Indian Energy Exchange, India
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Petron Corporation, Philippines
- VISA Power Limited - India
- Oldendorff Carriers - Singapore
- Mercuria Energy - Indonesia
- Bharathi Cement Corporation - India
- Orica Australia Pty. Ltd.
- Kalimantan Lumbung Energi - Indonesia
- Central Java Power - Indonesia
- Georgia Ports Authority, United States
- Therma Luzon, Inc, Philippines
- Bhatia International Limited - India
- Riau Bara Harum - Indonesia
- Directorate Of Revenue Intelligence - India
- Central Electricity Authority - India
- Simpson Spence & Young - Indonesia
- Anglo American - United Kingdom
- Neyveli Lignite Corporation Ltd, - India
- Sojitz Corporation - Japan
- Tamil Nadu electricity Board
- Commonwealth Bank - Australia
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Bank of Tokyo Mitsubishi UFJ Ltd
- Coastal Gujarat Power Limited - India
- Thai Mozambique Logistica
- Chettinad Cement Corporation Ltd - India
- Africa Commodities Group - South Africa
- PNOC Exploration Corporation - Philippines
- Gujarat Sidhee Cement - India
- South Luzon Thermal Energy Corporation
- SMG Consultants - Indonesia
- Semirara Mining and Power Corporation, Philippines
- Madhucon Powers Ltd - India
- The Treasury - Australian Government
- Vizag Seaport Private Limited - India
- Vijayanagar Sugar Pvt Ltd - India
- Jindal Steel & Power Ltd - India
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Kobexindo Tractors - Indoneisa
- Kumho Petrochemical, South Korea
- India Bulls Power Limited - India
- Sindya Power Generating Company Private Ltd
- Pipit Mutiara Jaya. PT, Indonesia
- Carbofer General Trading SA - India
- Semirara Mining Corp, Philippines
- Miang Besar Coal Terminal - Indonesia
- Energy Link Ltd, New Zealand
- New Zealand Coal & Carbon
- TeaM Sual Corporation - Philippines
- Krishnapatnam Port Company Ltd. - India
- Essar Steel Hazira Ltd - India
- ASAPP Information Group - India
- Indo Tambangraya Megah - Indonesia
- Jaiprakash Power Ventures ltd
- Thiess Contractors Indonesia
- Siam City Cement PLC, Thailand
- Kartika Selabumi Mining - Indonesia
- Karbindo Abesyapradhi - Indoneisa
- Ind-Barath Power Infra Limited - India
- Xindia Steels Limited - India
- Wood Mackenzie - Singapore
- Economic Council, Georgia
- GN Power Mariveles Coal Plant, Philippines
- Malabar Cements Ltd - India
- Rio Tinto Coal - Australia
- Goldman Sachs - Singapore
- Bukit Asam (Persero) Tbk - Indonesia
- Global Business Power Corporation, Philippines
- Uttam Galva Steels Limited - India
- Bulk Trading Sa - Switzerland
- Electricity Generating Authority of Thailand
- MS Steel International - UAE
- Borneo Indobara - Indonesia
- CNBM International Corporation - China
- Romanian Commodities Exchange
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