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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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Monday, 21 March 22
A FORCE MAJEURE TO BE RECKONED WITH - BALTIC EXCHANGE
Sanctions cause payment confusion
This dispute in MUR Shipping BV v. RTI Ltd [2022] EWHC 467 (Comm) related to an owner’s purported exercis ...
Monday, 21 March 22
CHINA'S COAL OUTPUT UP 10.3 PCT IN FIRST TWO MONTHS - XINHUA
China’s raw coal output posted fast growth in the first two months of 2022, while coal imports continued to shrink, official data showed.
...
Tuesday, 15 March 22
INDUSTRY VETERANS & ORGANIZATIONS HONOURED WITH THE PRESTIGIOUS SHIPTEK INTERNATIONAL AWARDS 2022
Press Release: The 15th edition of the prestigious ShipTek International Conference & Awards 2022 concluded successfully from March 7th - 8th 2 ...
Tuesday, 15 March 22
CHINA'S COAL OUTPUT GROWS TO STABILIZE MARKET SUPPLY - XINHUA
China’s coal market has seen growth in output since late February amid the country’s efforts to stabilize production and ensure supply, ...
Tuesday, 08 March 22
RUSSIA-UKRAINE CONFLICT ADDS IMPETUS TO ASIA'S ENERGY TRANSITION - IEEFA
Clean energy alternatives are a crucial hedge against future disruptions in global commodity markets
Russia’s invasion of Ukra ...
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- CNBM International Corporation - China
- Latin American Coal - Colombia
- Directorate Of Revenue Intelligence - India
- Romanian Commodities Exchange
- Grasim Industreis Ltd - India
- Renaissance Capital - South Africa
- Salva Resources Pvt Ltd - India
- IEA Clean Coal Centre - UK
- Savvy Resources Ltd - HongKong
- Singapore Mercantile Exchange
- Eastern Energy - Thailand
- White Energy Company Limited
- The Treasury - Australian Government
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Sindya Power Generating Company Private Ltd
- Indogreen Group - Indonesia
- Bahari Cakrawala Sebuku - Indonesia
- Petrochimia International Co. Ltd.- Taiwan
- Karbindo Abesyapradhi - Indoneisa
- Cement Manufacturers Association - India
- Australian Coal Association
- New Zealand Coal & Carbon
- Asmin Koalindo Tuhup - Indonesia
- Semirara Mining Corp, Philippines
- Billiton Holdings Pty Ltd - Australia
- Electricity Authority, New Zealand
- Aditya Birla Group - India
- Bayan Resources Tbk. - Indonesia
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Sakthi Sugars Limited - India
- Siam City Cement PLC, Thailand
- Vijayanagar Sugar Pvt Ltd - India
- Thai Mozambique Logistica
- Ministry of Finance - Indonesia
- Deloitte Consulting - India
- TeaM Sual Corporation - Philippines
- Makarim & Taira - Indonesia
- Kartika Selabumi Mining - Indonesia
- Holcim Trading Pte Ltd - Singapore
- Barasentosa Lestari - Indonesia
- Kapuas Tunggal Persada - Indonesia
- Marubeni Corporation - India
- Central Electricity Authority - India
- South Luzon Thermal Energy Corporation
- Electricity Generating Authority of Thailand
- Ind-Barath Power Infra Limited - India
- Bukit Asam (Persero) Tbk - Indonesia
- Formosa Plastics Group - Taiwan
- Goldman Sachs - Singapore
- Coastal Gujarat Power Limited - India
- Maharashtra Electricity Regulatory Commission - India
- Anglo American - United Kingdom
- Indonesian Coal Mining Association
- Georgia Ports Authority, United States
- Ministry of Transport, Egypt
- Central Java Power - Indonesia
- Independent Power Producers Association of India
- Wood Mackenzie - Singapore
- Banpu Public Company Limited - Thailand
- OPG Power Generation Pvt Ltd - India
- Videocon Industries ltd - India
- VISA Power Limited - India
- Straits Asia Resources Limited - Singapore
- Sojitz Corporation - Japan
- Kepco SPC Power Corporation, Philippines
- Leighton Contractors Pty Ltd - Australia
- Antam Resourcindo - Indonesia
- Posco Energy - South Korea
- Sarangani Energy Corporation, Philippines
- Krishnapatnam Port Company Ltd. - India
- India Bulls Power Limited - India
- Simpson Spence & Young - Indonesia
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Interocean Group of Companies - India
- Altura Mining Limited, Indonesia
- Coalindo Energy - Indonesia
- TNB Fuel Sdn Bhd - Malaysia
- Bangladesh Power Developement Board
- Global Coal Blending Company Limited - Australia
- Cigading International Bulk Terminal - Indonesia
- Dalmia Cement Bharat India
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Gujarat Mineral Development Corp Ltd - India
- Vedanta Resources Plc - India
- GMR Energy Limited - India
- Aboitiz Power Corporation - Philippines
- PNOC Exploration Corporation - Philippines
- Kaltim Prima Coal - Indonesia
- Mintek Dendrill Indonesia
- Riau Bara Harum - Indonesia
- SMC Global Power, Philippines
- Malabar Cements Ltd - India
- CIMB Investment Bank - Malaysia
- Mercuria Energy - Indonesia
- Meenaskhi Energy Private Limited - India
- Indian Energy Exchange, India
- Chamber of Mines of South Africa
- Chettinad Cement Corporation Ltd - India
- Intertek Mineral Services - Indonesia
- Maheswari Brothers Coal Limited - India
- Power Finance Corporation Ltd., India
- Ministry of Mines - Canada
- Therma Luzon, Inc, Philippines
- Bhoruka Overseas - Indonesia
- Bhushan Steel Limited - India
- Planning Commission, India
- Heidelberg Cement - Germany
- San Jose City I Power Corp, Philippines
- Standard Chartered Bank - UAE
- Miang Besar Coal Terminal - Indonesia
- McConnell Dowell - Australia
- Uttam Galva Steels Limited - India
- Neyveli Lignite Corporation Ltd, - India
- Indian Oil Corporation Limited
- ASAPP Information Group - India
- Merrill Lynch Commodities Europe
- Orica Australia Pty. Ltd.
- Vizag Seaport Private Limited - India
- Port Waratah Coal Services - Australia
- Alfred C Toepfer International GmbH - Germany
- Kumho Petrochemical, South Korea
- Parliament of New Zealand
- Africa Commodities Group - South Africa
- Samtan Co., Ltd - South Korea
- LBH Netherlands Bv - Netherlands
- Parry Sugars Refinery, India
- Tata Chemicals Ltd - India
- Baramulti Group, Indonesia
- Ambuja Cements Ltd - India
- Timah Investasi Mineral - Indoneisa
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Medco Energi Mining Internasional
- Kobexindo Tractors - Indoneisa
- Jaiprakash Power Ventures ltd
- Global Business Power Corporation, Philippines
- Minerals Council of Australia
- Lanco Infratech Ltd - India
- SMG Consultants - Indonesia
- Binh Thuan Hamico - Vietnam
- Iligan Light & Power Inc, Philippines
- European Bulk Services B.V. - Netherlands
- The State Trading Corporation of India Ltd
- Sical Logistics Limited - India
- Australian Commodity Traders Exchange
- SN Aboitiz Power Inc, Philippines
- Agrawal Coal Company - India
- Tamil Nadu electricity Board
- Energy Development Corp, Philippines
- Rashtriya Ispat Nigam Limited - India
- Siam City Cement - Thailand
- GAC Shipping (India) Pvt Ltd
- Directorate General of MIneral and Coal - Indonesia
- Bukit Baiduri Energy - Indonesia
- Indika Energy - Indonesia
- Pipit Mutiara Jaya. PT, Indonesia
- Kideco Jaya Agung - Indonesia
- Karaikal Port Pvt Ltd - India
- London Commodity Brokers - England
- Price Waterhouse Coopers - Russia
- Kohat Cement Company Ltd. - Pakistan
- Wilmar Investment Holdings
- Eastern Coal Council - USA
- Jorong Barutama Greston.PT - Indonesia
- Commonwealth Bank - Australia
- Xindia Steels Limited - India
- Essar Steel Hazira Ltd - India
- AsiaOL BioFuels Corp., Philippines
- International Coal Ventures Pvt Ltd - India
- Star Paper Mills Limited - India
- Petron Corporation, Philippines
- Attock Cement Pakistan Limited
- Jindal Steel & Power Ltd - India
- Bulk Trading Sa - Switzerland
- Gujarat Sidhee Cement - India
- Economic Council, Georgia
- Sinarmas Energy and Mining - Indonesia
- MS Steel International - UAE
- The University of Queensland
- Gujarat Electricity Regulatory Commission - India
- Bukit Makmur.PT - Indonesia
- Bharathi Cement Corporation - India
- Orica Mining Services - Indonesia
- Pendopo Energi Batubara - Indonesia
- Coal and Oil Company - UAE
- Trasteel International SA, Italy
- Offshore Bulk Terminal Pte Ltd, Singapore
- Meralco Power Generation, Philippines
- ICICI Bank Limited - India
- Manunggal Multi Energi - Indonesia
- Madhucon Powers Ltd - India
- Carbofer General Trading SA - India
- Mercator Lines Limited - India
- Indo Tambangraya Megah - Indonesia
- Borneo Indobara - Indonesia
- Global Green Power PLC Corporation, Philippines
- Sree Jayajothi Cements Limited - India
- PowerSource Philippines DevCo
- PetroVietnam Power Coal Import and Supply Company
- Ceylon Electricity Board - Sri Lanka
- Larsen & Toubro Limited - India
- Toyota Tsusho Corporation, Japan
- GN Power Mariveles Coal Plant, Philippines
- Semirara Mining and Power Corporation, Philippines
- Thiess Contractors Indonesia
- Bank of Tokyo Mitsubishi UFJ Ltd
- IHS Mccloskey Coal Group - USA
- Oldendorff Carriers - Singapore
- GVK Power & Infra Limited - India
- Kalimantan Lumbung Energi - Indonesia
- PTC India Limited - India
- Globalindo Alam Lestari - Indonesia
- Edison Trading Spa - Italy
- Rio Tinto Coal - Australia
- Metalloyd Limited - United Kingdom
- Mjunction Services Limited - India
- Bhatia International Limited - India
- Energy Link Ltd, New Zealand
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