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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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Sunday, 03 July 22
CHINESE VICE PREMIER STRESSES CLEAN, EFFICIENT USE OF COAL - XINHUA
Chinese Vice Premier Han Zheng has stressed efforts to promote the clean and efficient use of coal, and pursue green, low-carbon and high-quality d ...
Sunday, 03 July 22
SOVEREIGN SECTOR OUTLOOK REVISED TO NEUTRAL ON UKRAINE WAR IMPACT - FITCH RATINGS
The deterioration in global sovereign credit conditions this year relative to our expectations at end-2021 has caused Fitch Ratings to change its g ...
Saturday, 02 July 22
GLOBAL SEABORNE COAL EXPORTS IN 2021 INCREASED BY 4.4% Y-O-Y TO 1147 MLN TONNES - BANCHERO COSTA
In the full 12 months of 2021, global seaborne coal exports increased by +4.4% y-o-y to 1147 mln tonnes, from 1099 mln tonnes in 2020, according to ...
Friday, 01 July 22
INDIA'S TOP CEMENT MAKER PAYING FOR RUSSIAN COAL IN CHINESE YUAN - REUTERS
India’s biggest cement producer, UltraTech Cement ULTC.NS, is importing a cargo of Russian coal and paying using Chinese yuan, according to a ...
Thursday, 30 June 22
FINANCIAL GAINS SUPPORT COAL TRANSITION - BALTIC EXCHANGE
Support for the shift away from coal dependency continues to mount, with the International Monetary Fund (IMF) calculating that the move would gene ...
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- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Maheswari Brothers Coal Limited - India
- Rashtriya Ispat Nigam Limited - India
- Independent Power Producers Association of India
- Metalloyd Limited - United Kingdom
- The State Trading Corporation of India Ltd
- New Zealand Coal & Carbon
- Indogreen Group - Indonesia
- Kepco SPC Power Corporation, Philippines
- Miang Besar Coal Terminal - Indonesia
- LBH Netherlands Bv - Netherlands
- Ministry of Mines - Canada
- Indika Energy - Indonesia
- Tamil Nadu electricity Board
- Attock Cement Pakistan Limited
- Krishnapatnam Port Company Ltd. - India
- Neyveli Lignite Corporation Ltd, - India
- Bukit Makmur.PT - Indonesia
- Karaikal Port Pvt Ltd - India
- Banpu Public Company Limited - Thailand
- Coastal Gujarat Power Limited - India
- Ministry of Finance - Indonesia
- Kumho Petrochemical, South Korea
- Parliament of New Zealand
- Iligan Light & Power Inc, Philippines
- Vizag Seaport Private Limited - India
- ICICI Bank Limited - India
- Kohat Cement Company Ltd. - Pakistan
- Kartika Selabumi Mining - Indonesia
- Therma Luzon, Inc, Philippines
- Electricity Authority, New Zealand
- Timah Investasi Mineral - Indoneisa
- SMC Global Power, Philippines
- Parry Sugars Refinery, India
- McConnell Dowell - Australia
- Semirara Mining and Power Corporation, Philippines
- Heidelberg Cement - Germany
- Thai Mozambique Logistica
- European Bulk Services B.V. - Netherlands
- Australian Commodity Traders Exchange
- Orica Australia Pty. Ltd.
- Bangladesh Power Developement Board
- GN Power Mariveles Coal Plant, Philippines
- Alfred C Toepfer International GmbH - Germany
- Sakthi Sugars Limited - India
- Cigading International Bulk Terminal - Indonesia
- OPG Power Generation Pvt Ltd - India
- South Luzon Thermal Energy Corporation
- TeaM Sual Corporation - Philippines
- Globalindo Alam Lestari - Indonesia
- Central Java Power - Indonesia
- Straits Asia Resources Limited - Singapore
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Petron Corporation, Philippines
- Indian Energy Exchange, India
- Indian Oil Corporation Limited
- Bukit Baiduri Energy - Indonesia
- Goldman Sachs - Singapore
- Marubeni Corporation - India
- ASAPP Information Group - India
- Meenaskhi Energy Private Limited - India
- Sree Jayajothi Cements Limited - India
- Eastern Coal Council - USA
- Riau Bara Harum - Indonesia
- Siam City Cement PLC, Thailand
- Ministry of Transport, Egypt
- Africa Commodities Group - South Africa
- Price Waterhouse Coopers - Russia
- Carbofer General Trading SA - India
- GAC Shipping (India) Pvt Ltd
- Madhucon Powers Ltd - India
- Sindya Power Generating Company Private Ltd
- Bhoruka Overseas - Indonesia
- Global Coal Blending Company Limited - Australia
- Barasentosa Lestari - Indonesia
- VISA Power Limited - India
- Samtan Co., Ltd - South Korea
- Baramulti Group, Indonesia
- Georgia Ports Authority, United States
- Singapore Mercantile Exchange
- Salva Resources Pvt Ltd - India
- Intertek Mineral Services - Indonesia
- GMR Energy Limited - India
- Port Waratah Coal Services - Australia
- Electricity Generating Authority of Thailand
- Pipit Mutiara Jaya. PT, Indonesia
- PTC India Limited - India
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Petrochimia International Co. Ltd.- Taiwan
- Commonwealth Bank - Australia
- Thiess Contractors Indonesia
- Bayan Resources Tbk. - Indonesia
- Lanco Infratech Ltd - India
- TNB Fuel Sdn Bhd - Malaysia
- Wood Mackenzie - Singapore
- Dalmia Cement Bharat India
- Chettinad Cement Corporation Ltd - India
- Formosa Plastics Group - Taiwan
- Larsen & Toubro Limited - India
- Minerals Council of Australia
- Planning Commission, India
- Orica Mining Services - Indonesia
- Australian Coal Association
- The Treasury - Australian Government
- Medco Energi Mining Internasional
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Agrawal Coal Company - India
- Jindal Steel & Power Ltd - India
- AsiaOL BioFuels Corp., Philippines
- Energy Development Corp, Philippines
- Grasim Industreis Ltd - India
- Trasteel International SA, Italy
- Gujarat Sidhee Cement - India
- Videocon Industries ltd - India
- International Coal Ventures Pvt Ltd - India
- Siam City Cement - Thailand
- Renaissance Capital - South Africa
- Ind-Barath Power Infra Limited - India
- Wilmar Investment Holdings
- Maharashtra Electricity Regulatory Commission - India
- Mjunction Services Limited - India
- Kapuas Tunggal Persada - Indonesia
- Jorong Barutama Greston.PT - Indonesia
- London Commodity Brokers - England
- IEA Clean Coal Centre - UK
- Kaltim Prima Coal - Indonesia
- Cement Manufacturers Association - India
- Ambuja Cements Ltd - India
- Vijayanagar Sugar Pvt Ltd - India
- Bharathi Cement Corporation - India
- Bhatia International Limited - India
- Bank of Tokyo Mitsubishi UFJ Ltd
- Pendopo Energi Batubara - Indonesia
- Offshore Bulk Terminal Pte Ltd, Singapore
- Karbindo Abesyapradhi - Indoneisa
- CIMB Investment Bank - Malaysia
- Tata Chemicals Ltd - India
- Holcim Trading Pte Ltd - Singapore
- Jaiprakash Power Ventures ltd
- Aditya Birla Group - India
- Indo Tambangraya Megah - Indonesia
- Mercator Lines Limited - India
- Interocean Group of Companies - India
- GVK Power & Infra Limited - India
- Gujarat Electricity Regulatory Commission - India
- Essar Steel Hazira Ltd - India
- Semirara Mining Corp, Philippines
- Kobexindo Tractors - Indoneisa
- Asmin Koalindo Tuhup - Indonesia
- Posco Energy - South Korea
- Sical Logistics Limited - India
- Sinarmas Energy and Mining - Indonesia
- Bahari Cakrawala Sebuku - Indonesia
- Leighton Contractors Pty Ltd - Australia
- MS Steel International - UAE
- Global Green Power PLC Corporation, Philippines
- Aboitiz Power Corporation - Philippines
- Star Paper Mills Limited - India
- SMG Consultants - Indonesia
- Billiton Holdings Pty Ltd - Australia
- Makarim & Taira - Indonesia
- Bhushan Steel Limited - India
- Economic Council, Georgia
- San Jose City I Power Corp, Philippines
- Global Business Power Corporation, Philippines
- Merrill Lynch Commodities Europe
- Kideco Jaya Agung - Indonesia
- Latin American Coal - Colombia
- Meralco Power Generation, Philippines
- Romanian Commodities Exchange
- Antam Resourcindo - Indonesia
- White Energy Company Limited
- Vedanta Resources Plc - India
- Altura Mining Limited, Indonesia
- Indonesian Coal Mining Association
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- PowerSource Philippines DevCo
- Anglo American - United Kingdom
- Uttam Galva Steels Limited - India
- Rio Tinto Coal - Australia
- PetroVietnam Power Coal Import and Supply Company
- Sojitz Corporation - Japan
- SN Aboitiz Power Inc, Philippines
- Gujarat Mineral Development Corp Ltd - India
- Borneo Indobara - Indonesia
- Bulk Trading Sa - Switzerland
- CNBM International Corporation - China
- Kalimantan Lumbung Energi - Indonesia
- Malabar Cements Ltd - India
- Coal and Oil Company - UAE
- Savvy Resources Ltd - HongKong
- Directorate General of MIneral and Coal - Indonesia
- Standard Chartered Bank - UAE
- The University of Queensland
- Bukit Asam (Persero) Tbk - Indonesia
- Edison Trading Spa - Italy
- Deloitte Consulting - India
- Toyota Tsusho Corporation, Japan
- Sarangani Energy Corporation, Philippines
- Manunggal Multi Energi - Indonesia
- Mintek Dendrill Indonesia
- PNOC Exploration Corporation - Philippines
- Binh Thuan Hamico - Vietnam
- Energy Link Ltd, New Zealand
- Xindia Steels Limited - India
- Ceylon Electricity Board - Sri Lanka
- Power Finance Corporation Ltd., India
- Chamber of Mines of South Africa
- Eastern Energy - Thailand
- Central Electricity Authority - India
- IHS Mccloskey Coal Group - USA
- India Bulls Power Limited - India
- Mercuria Energy - Indonesia
- Oldendorff Carriers - Singapore
- Coalindo Energy - Indonesia
- Directorate Of Revenue Intelligence - India
- Simpson Spence & Young - Indonesia
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