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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, 29 June 22
LNG MARKET REMAINS TIGHT - INTERMODAL
LNG market remains tight currently, mainly driven by the US LNG outage from the recent fire in Freeport LNG terminal together with the recent fall ...
Wednesday, 29 June 22
CHINA'S NEW PLAN FOR RENEWABLE ENERGY DEVELOPMENT FOCUSES ON CONSUMPTION - FITCH RATINGS
China’s focus on consumption penetration for renewable energy development in its recently released 14th five-year plan – 2021 to 2025 & ...
Wednesday, 29 June 22
APAC CORPORATE SECTOR OUTLOOKS SHIFT AMID GLOBAL SHOCKS - FITCH RATINGS’
Fitch Ratings’ mid-2022 corporate sector outlook review revealed that the Asia-Pacific (APAC) region saw the largest number of sector outlook ...
Thursday, 16 June 22
MARKET INSIGHT - INTERMODAL
Picking up from my last insight in March, on the early days of the invasion, it's worth pointing out the way that the fast-paced working enviro ...
Saturday, 11 June 22
AIMTEK INTERNATIONAL CONFERENCE AND AWARDS
Press Release: The prestigious AIMTEK International Conference and Awards concluded successfully on June 7th, 2022 at Radisson Blu, Yas Island Abu ...
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- Indonesian Coal Mining Association
- Mintek Dendrill Indonesia
- Agrawal Coal Company - India
- Mercator Lines Limited - India
- Cigading International Bulk Terminal - Indonesia
- Bhoruka Overseas - Indonesia
- Star Paper Mills Limited - India
- Tata Chemicals Ltd - India
- Xindia Steels Limited - India
- Kohat Cement Company Ltd. - Pakistan
- Bukit Asam (Persero) Tbk - Indonesia
- Grasim Industreis Ltd - India
- Energy Development Corp, Philippines
- Savvy Resources Ltd - HongKong
- Sical Logistics Limited - India
- Gujarat Sidhee Cement - India
- Bukit Baiduri Energy - Indonesia
- Power Finance Corporation Ltd., India
- Tamil Nadu electricity Board
- CNBM International Corporation - China
- Therma Luzon, Inc, Philippines
- Jaiprakash Power Ventures ltd
- AsiaOL BioFuels Corp., Philippines
- Global Business Power Corporation, Philippines
- Aditya Birla Group - India
- Bukit Makmur.PT - Indonesia
- Essar Steel Hazira Ltd - India
- Jorong Barutama Greston.PT - Indonesia
- Merrill Lynch Commodities Europe
- Anglo American - United Kingdom
- Samtan Co., Ltd - South Korea
- GN Power Mariveles Coal Plant, Philippines
- International Coal Ventures Pvt Ltd - India
- Vedanta Resources Plc - India
- Bharathi Cement Corporation - India
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Georgia Ports Authority, United States
- Attock Cement Pakistan Limited
- GAC Shipping (India) Pvt Ltd
- Binh Thuan Hamico - Vietnam
- Borneo Indobara - Indonesia
- Central Java Power - Indonesia
- Directorate General of MIneral and Coal - Indonesia
- Latin American Coal - Colombia
- Baramulti Group, Indonesia
- Aboitiz Power Corporation - Philippines
- Energy Link Ltd, New Zealand
- SN Aboitiz Power Inc, Philippines
- Meenaskhi Energy Private Limited - India
- LBH Netherlands Bv - Netherlands
- Mercuria Energy - Indonesia
- Pendopo Energi Batubara - Indonesia
- Kapuas Tunggal Persada - Indonesia
- European Bulk Services B.V. - Netherlands
- Petrochimia International Co. Ltd.- Taiwan
- SMC Global Power, Philippines
- Ministry of Transport, Egypt
- Pipit Mutiara Jaya. PT, Indonesia
- Neyveli Lignite Corporation Ltd, - India
- Riau Bara Harum - Indonesia
- Port Waratah Coal Services - Australia
- Siam City Cement - Thailand
- VISA Power Limited - India
- IEA Clean Coal Centre - UK
- London Commodity Brokers - England
- White Energy Company Limited
- Marubeni Corporation - India
- The State Trading Corporation of India Ltd
- Renaissance Capital - South Africa
- New Zealand Coal & Carbon
- Madhucon Powers Ltd - India
- Iligan Light & Power Inc, Philippines
- Jindal Steel & Power Ltd - India
- Kepco SPC Power Corporation, Philippines
- Bhatia International Limited - India
- Bhushan Steel Limited - India
- Sree Jayajothi Cements Limited - India
- Barasentosa Lestari - Indonesia
- Ministry of Mines - Canada
- Posco Energy - South Korea
- Semirara Mining Corp, Philippines
- Maheswari Brothers Coal Limited - India
- Indian Energy Exchange, India
- Krishnapatnam Port Company Ltd. - India
- CIMB Investment Bank - Malaysia
- India Bulls Power Limited - India
- Bayan Resources Tbk. - Indonesia
- Manunggal Multi Energi - Indonesia
- Bulk Trading Sa - Switzerland
- Directorate Of Revenue Intelligence - India
- Romanian Commodities Exchange
- MS Steel International - UAE
- Gujarat Electricity Regulatory Commission - India
- Lanco Infratech Ltd - India
- Electricity Authority, New Zealand
- Rashtriya Ispat Nigam Limited - India
- Australian Coal Association
- Banpu Public Company Limited - Thailand
- Billiton Holdings Pty Ltd - Australia
- Wood Mackenzie - Singapore
- Uttam Galva Steels Limited - India
- Toyota Tsusho Corporation, Japan
- Oldendorff Carriers - Singapore
- Kaltim Prima Coal - Indonesia
- PTC India Limited - India
- GVK Power & Infra Limited - India
- The Treasury - Australian Government
- Holcim Trading Pte Ltd - Singapore
- Africa Commodities Group - South Africa
- Orica Australia Pty. Ltd.
- Global Green Power PLC Corporation, Philippines
- Eastern Energy - Thailand
- Carbofer General Trading SA - India
- TeaM Sual Corporation - Philippines
- Siam City Cement PLC, Thailand
- Alfred C Toepfer International GmbH - Germany
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Edison Trading Spa - Italy
- Kobexindo Tractors - Indoneisa
- Rio Tinto Coal - Australia
- South Luzon Thermal Energy Corporation
- Sakthi Sugars Limited - India
- Vijayanagar Sugar Pvt Ltd - India
- Commonwealth Bank - Australia
- Videocon Industries ltd - India
- Salva Resources Pvt Ltd - India
- OPG Power Generation Pvt Ltd - India
- Orica Mining Services - Indonesia
- Bahari Cakrawala Sebuku - Indonesia
- Parry Sugars Refinery, India
- Bangladesh Power Developement Board
- Global Coal Blending Company Limited - Australia
- Globalindo Alam Lestari - Indonesia
- Thai Mozambique Logistica
- Leighton Contractors Pty Ltd - Australia
- Cement Manufacturers Association - India
- Interocean Group of Companies - India
- Sinarmas Energy and Mining - Indonesia
- ASAPP Information Group - India
- Minerals Council of Australia
- San Jose City I Power Corp, Philippines
- Kideco Jaya Agung - Indonesia
- Medco Energi Mining Internasional
- Ministry of Finance - Indonesia
- Trasteel International SA, Italy
- Maharashtra Electricity Regulatory Commission - India
- Simpson Spence & Young - Indonesia
- Singapore Mercantile Exchange
- Independent Power Producers Association of India
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Eastern Coal Council - USA
- Intertek Mineral Services - Indonesia
- Kalimantan Lumbung Energi - Indonesia
- McConnell Dowell - Australia
- Ambuja Cements Ltd - India
- Semirara Mining and Power Corporation, Philippines
- Asmin Koalindo Tuhup - Indonesia
- Offshore Bulk Terminal Pte Ltd, Singapore
- Coal and Oil Company - UAE
- Timah Investasi Mineral - Indoneisa
- GMR Energy Limited - India
- Makarim & Taira - Indonesia
- Antam Resourcindo - Indonesia
- PowerSource Philippines DevCo
- Standard Chartered Bank - UAE
- Vizag Seaport Private Limited - India
- Indian Oil Corporation Limited
- Sarangani Energy Corporation, Philippines
- Ind-Barath Power Infra Limited - India
- Heidelberg Cement - Germany
- Malabar Cements Ltd - India
- Formosa Plastics Group - Taiwan
- Goldman Sachs - Singapore
- Australian Commodity Traders Exchange
- The University of Queensland
- Altura Mining Limited, Indonesia
- Meralco Power Generation, Philippines
- Economic Council, Georgia
- Wilmar Investment Holdings
- Coastal Gujarat Power Limited - India
- PNOC Exploration Corporation - Philippines
- Gujarat Mineral Development Corp Ltd - India
- Kumho Petrochemical, South Korea
- Price Waterhouse Coopers - Russia
- Mjunction Services Limited - India
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Kartika Selabumi Mining - Indonesia
- IHS Mccloskey Coal Group - USA
- Larsen & Toubro Limited - India
- Electricity Generating Authority of Thailand
- Indogreen Group - Indonesia
- Deloitte Consulting - India
- Parliament of New Zealand
- Sindya Power Generating Company Private Ltd
- Ceylon Electricity Board - Sri Lanka
- Bank of Tokyo Mitsubishi UFJ Ltd
- PetroVietnam Power Coal Import and Supply Company
- Indo Tambangraya Megah - Indonesia
- Central Electricity Authority - India
- Indika Energy - Indonesia
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Thiess Contractors Indonesia
- Straits Asia Resources Limited - Singapore
- ICICI Bank Limited - India
- Karbindo Abesyapradhi - Indoneisa
- Dalmia Cement Bharat India
- TNB Fuel Sdn Bhd - Malaysia
- Sojitz Corporation - Japan
- Karaikal Port Pvt Ltd - India
- Chamber of Mines of South Africa
- Metalloyd Limited - United Kingdom
- Chettinad Cement Corporation Ltd - India
- Miang Besar Coal Terminal - Indonesia
- Planning Commission, India
- Coalindo Energy - Indonesia
- SMG Consultants - Indonesia
- Petron Corporation, Philippines
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