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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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Tuesday, 26 April 22
INDIA'S COAL IMPORTS ARE SHIFTING, THERMAL MORE THAN COKING - REUTERS
India’s coal imports are starting to reflect shifting world trade and pricing dynamics in the wake of Russia’s invasion of neighbouring ...
Monday, 18 April 22
GERMAN COAL IMPORTERS EXPECT A BRIEF SPIKE IN PRICES ON EU BAN - REUTERS
A European Union embargo on Russian coal imports will push up prices in the short term before alternative supplies become available to steady the c ...
Monday, 18 April 22
FINNISH 'LOOPHOLES' ALLOW IMPORTS OF RUSSIAN COAL AND OIL TO CONTINUE - EURONEWS
Activists in Finland are calling for the government to clamp down faster on state-owned companies that continue to import raw materials from Russia ...
Monday, 18 April 22
GOVT IN DISCUSSION WITH WORLD BANK ON FRAMEWORK FOR COAL MINE CLOSURE - BUSINESS STANDARD
The coal ministry is in discussions with the World Bank for collaboration on the mine closure framework, a government official said on Wednesday.
...
Monday, 18 April 22
DEMAND FOR THERMAL COAL TO RISE DUE TO INCREASE IN ELECTRICITY DEMAND: INDIAN COAL MINISTRY - PTI
Coal block allocatees have a golden opportunity to augment production as the demand for thermal coal will rise due to an increase in electricity de ...
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- Marubeni Corporation - India
- Madhucon Powers Ltd - India
- Commonwealth Bank - Australia
- Sarangani Energy Corporation, Philippines
- Sojitz Corporation - Japan
- London Commodity Brokers - England
- Dalmia Cement Bharat India
- Mintek Dendrill Indonesia
- Barasentosa Lestari - Indonesia
- Vedanta Resources Plc - India
- Manunggal Multi Energi - Indonesia
- Electricity Generating Authority of Thailand
- Metalloyd Limited - United Kingdom
- Cigading International Bulk Terminal - Indonesia
- Ministry of Mines - Canada
- White Energy Company Limited
- Neyveli Lignite Corporation Ltd, - India
- Kepco SPC Power Corporation, Philippines
- Malabar Cements Ltd - India
- PetroVietnam Power Coal Import and Supply Company
- The State Trading Corporation of India Ltd
- Coalindo Energy - Indonesia
- Sakthi Sugars Limited - India
- Bangladesh Power Developement Board
- Kartika Selabumi Mining - Indonesia
- Australian Commodity Traders Exchange
- Maharashtra Electricity Regulatory Commission - India
- Karaikal Port Pvt Ltd - India
- Gujarat Sidhee Cement - India
- The University of Queensland
- Anglo American - United Kingdom
- Indika Energy - Indonesia
- Latin American Coal - Colombia
- SMG Consultants - Indonesia
- Chamber of Mines of South Africa
- Economic Council, Georgia
- The Treasury - Australian Government
- Medco Energi Mining Internasional
- European Bulk Services B.V. - Netherlands
- McConnell Dowell - Australia
- Petron Corporation, Philippines
- Bukit Asam (Persero) Tbk - Indonesia
- PowerSource Philippines DevCo
- Port Waratah Coal Services - Australia
- Price Waterhouse Coopers - Russia
- Attock Cement Pakistan Limited
- Simpson Spence & Young - Indonesia
- Carbofer General Trading SA - India
- Chettinad Cement Corporation Ltd - India
- Kapuas Tunggal Persada - Indonesia
- Alfred C Toepfer International GmbH - Germany
- Offshore Bulk Terminal Pte Ltd, Singapore
- Intertek Mineral Services - Indonesia
- Deloitte Consulting - India
- Vijayanagar Sugar Pvt Ltd - India
- GN Power Mariveles Coal Plant, Philippines
- Interocean Group of Companies - India
- CNBM International Corporation - China
- Salva Resources Pvt Ltd - India
- Indogreen Group - Indonesia
- Mercuria Energy - Indonesia
- Global Business Power Corporation, Philippines
- GVK Power & Infra Limited - India
- Ambuja Cements Ltd - India
- Formosa Plastics Group - Taiwan
- Sical Logistics Limited - India
- IEA Clean Coal Centre - UK
- Independent Power Producers Association of India
- Eastern Energy - Thailand
- AsiaOL BioFuels Corp., Philippines
- Central Electricity Authority - India
- Essar Steel Hazira Ltd - India
- Toyota Tsusho Corporation, Japan
- ICICI Bank Limited - India
- Maheswari Brothers Coal Limited - India
- Aditya Birla Group - India
- Pendopo Energi Batubara - Indonesia
- Coastal Gujarat Power Limited - India
- Bank of Tokyo Mitsubishi UFJ Ltd
- Global Coal Blending Company Limited - Australia
- Indo Tambangraya Megah - Indonesia
- Riau Bara Harum - Indonesia
- Semirara Mining Corp, Philippines
- Sree Jayajothi Cements Limited - India
- Vizag Seaport Private Limited - India
- PTC India Limited - India
- Africa Commodities Group - South Africa
- International Coal Ventures Pvt Ltd - India
- Holcim Trading Pte Ltd - Singapore
- Global Green Power PLC Corporation, Philippines
- Siam City Cement - Thailand
- Gujarat Mineral Development Corp Ltd - India
- Electricity Authority, New Zealand
- Timah Investasi Mineral - Indoneisa
- Bayan Resources Tbk. - Indonesia
- Meenaskhi Energy Private Limited - India
- Singapore Mercantile Exchange
- Bhatia International Limited - India
- Rio Tinto Coal - Australia
- Altura Mining Limited, Indonesia
- Borneo Indobara - Indonesia
- Billiton Holdings Pty Ltd - Australia
- Bhushan Steel Limited - India
- TNB Fuel Sdn Bhd - Malaysia
- Bharathi Cement Corporation - India
- Xindia Steels Limited - India
- IHS Mccloskey Coal Group - USA
- Goldman Sachs - Singapore
- Renaissance Capital - South Africa
- South Luzon Thermal Energy Corporation
- Orica Mining Services - Indonesia
- Lanco Infratech Ltd - India
- Miang Besar Coal Terminal - Indonesia
- Wood Mackenzie - Singapore
- Energy Development Corp, Philippines
- Bukit Makmur.PT - Indonesia
- Romanian Commodities Exchange
- Straits Asia Resources Limited - Singapore
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Planning Commission, India
- VISA Power Limited - India
- Heidelberg Cement - Germany
- Thiess Contractors Indonesia
- Jorong Barutama Greston.PT - Indonesia
- Kohat Cement Company Ltd. - Pakistan
- Parry Sugars Refinery, India
- Mercator Lines Limited - India
- Meralco Power Generation, Philippines
- Star Paper Mills Limited - India
- Ministry of Finance - Indonesia
- SN Aboitiz Power Inc, Philippines
- San Jose City I Power Corp, Philippines
- LBH Netherlands Bv - Netherlands
- Indonesian Coal Mining Association
- Energy Link Ltd, New Zealand
- Rashtriya Ispat Nigam Limited - India
- Sinarmas Energy and Mining - Indonesia
- Thai Mozambique Logistica
- CIMB Investment Bank - Malaysia
- GMR Energy Limited - India
- TeaM Sual Corporation - Philippines
- Antam Resourcindo - Indonesia
- Petrochimia International Co. Ltd.- Taiwan
- India Bulls Power Limited - India
- Indian Oil Corporation Limited
- Larsen & Toubro Limited - India
- Power Finance Corporation Ltd., India
- Samtan Co., Ltd - South Korea
- Directorate Of Revenue Intelligence - India
- Sindya Power Generating Company Private Ltd
- New Zealand Coal & Carbon
- Merrill Lynch Commodities Europe
- ASAPP Information Group - India
- OPG Power Generation Pvt Ltd - India
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Edison Trading Spa - Italy
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Kideco Jaya Agung - Indonesia
- Orica Australia Pty. Ltd.
- Gujarat Electricity Regulatory Commission - India
- Standard Chartered Bank - UAE
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Videocon Industries ltd - India
- Parliament of New Zealand
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Bhoruka Overseas - Indonesia
- Bulk Trading Sa - Switzerland
- Cement Manufacturers Association - India
- Georgia Ports Authority, United States
- Kobexindo Tractors - Indoneisa
- Coal and Oil Company - UAE
- Pipit Mutiara Jaya. PT, Indonesia
- Trasteel International SA, Italy
- Ind-Barath Power Infra Limited - India
- Tamil Nadu electricity Board
- Central Java Power - Indonesia
- Kumho Petrochemical, South Korea
- Indian Energy Exchange, India
- Wilmar Investment Holdings
- SMC Global Power, Philippines
- Uttam Galva Steels Limited - India
- Makarim & Taira - Indonesia
- Jindal Steel & Power Ltd - India
- Directorate General of MIneral and Coal - Indonesia
- Globalindo Alam Lestari - Indonesia
- Bahari Cakrawala Sebuku - Indonesia
- Bukit Baiduri Energy - Indonesia
- Siam City Cement PLC, Thailand
- Savvy Resources Ltd - HongKong
- Semirara Mining and Power Corporation, Philippines
- Krishnapatnam Port Company Ltd. - India
- Oldendorff Carriers - Singapore
- Ministry of Transport, Egypt
- Jaiprakash Power Ventures ltd
- Karbindo Abesyapradhi - Indoneisa
- Aboitiz Power Corporation - Philippines
- Kalimantan Lumbung Energi - Indonesia
- Agrawal Coal Company - India
- Australian Coal Association
- Therma Luzon, Inc, Philippines
- Baramulti Group, Indonesia
- MS Steel International - UAE
- Posco Energy - South Korea
- PNOC Exploration Corporation - Philippines
- Banpu Public Company Limited - Thailand
- Iligan Light & Power Inc, Philippines
- Binh Thuan Hamico - Vietnam
- GAC Shipping (India) Pvt Ltd
- Eastern Coal Council - USA
- Leighton Contractors Pty Ltd - Australia
- Mjunction Services Limited - India
- Asmin Koalindo Tuhup - Indonesia
- Minerals Council of Australia
- Grasim Industreis Ltd - India
- Kaltim Prima Coal - Indonesia
- Tata Chemicals Ltd - India
- Ceylon Electricity Board - Sri Lanka
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