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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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Thursday, 17 February 22
APAC THERMAL COAL PRICES TO EASE ON END OF INDONESIA EXPORT BAN - FITCH RATINGS
Fitch Ratings-Shanghai/Singapore-14 February 2022: APAC thermal coal prices are likely to come under pressure in the near term due to seasonally we ...
Tuesday, 15 February 22
IS ANOTHER COAL SHORTAGE CRISIS LOOMING OVER INDIA? - BUSINESS STANDARD
In December last year, the Federation of Indian Mineral Industries (FIMI) shot off a letter to the Prime Minister claiming that the coal crisis was ...
Tuesday, 15 February 22
THERMAL COAL'S RECORD PRICE RUN MAY END UP ITS OWN WORST ENEMY - REUTERS
The price of benchmark Australian thermal coal rose last week to trade near record highs, providing a short-term boost to producers but increasing ...
Thursday, 10 February 22
INDONESIA: COAL EXPORT BAN - SKULD
Indonesia's coal export ban in the light of force majeure and off-hire clauses
In January 2022, Indonesia, the world's biggest exporte ...
Thursday, 10 February 22
EIA ANALYSIS CONSIDERS DIFFERENT OUTCOMES FOR COAL MARKETS IN INDIA AND SOUTHEAST ASIA
In our International Energy Outlook 2021 (IEO2021) Issues in Focus: Uncertainty in Coal Trade in India and Greater Southeast Asia, we analyze three ...
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- Bank of Tokyo Mitsubishi UFJ Ltd
- Ambuja Cements Ltd - India
- Kaltim Prima Coal - Indonesia
- Gujarat Sidhee Cement - India
- Kepco SPC Power Corporation, Philippines
- Goldman Sachs - Singapore
- Kapuas Tunggal Persada - Indonesia
- Bangladesh Power Developement Board
- Georgia Ports Authority, United States
- Billiton Holdings Pty Ltd - Australia
- TeaM Sual Corporation - Philippines
- Parry Sugars Refinery, India
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- New Zealand Coal & Carbon
- Aboitiz Power Corporation - Philippines
- Sinarmas Energy and Mining - Indonesia
- Ministry of Finance - Indonesia
- Chettinad Cement Corporation Ltd - India
- Mercuria Energy - Indonesia
- Planning Commission, India
- Karaikal Port Pvt Ltd - India
- Metalloyd Limited - United Kingdom
- Agrawal Coal Company - India
- Siam City Cement - Thailand
- Bhoruka Overseas - Indonesia
- Barasentosa Lestari - Indonesia
- Economic Council, Georgia
- Ind-Barath Power Infra Limited - India
- Price Waterhouse Coopers - Russia
- Ceylon Electricity Board - Sri Lanka
- Riau Bara Harum - Indonesia
- Merrill Lynch Commodities Europe
- Banpu Public Company Limited - Thailand
- The State Trading Corporation of India Ltd
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Vedanta Resources Plc - India
- Bayan Resources Tbk. - Indonesia
- Offshore Bulk Terminal Pte Ltd, Singapore
- Malabar Cements Ltd - India
- Mintek Dendrill Indonesia
- Maharashtra Electricity Regulatory Commission - India
- Semirara Mining and Power Corporation, Philippines
- Pipit Mutiara Jaya. PT, Indonesia
- White Energy Company Limited
- Sree Jayajothi Cements Limited - India
- Africa Commodities Group - South Africa
- Mjunction Services Limited - India
- Ministry of Mines - Canada
- Bahari Cakrawala Sebuku - Indonesia
- Straits Asia Resources Limited - Singapore
- Formosa Plastics Group - Taiwan
- Coalindo Energy - Indonesia
- Meenaskhi Energy Private Limited - India
- Thai Mozambique Logistica
- The Treasury - Australian Government
- Indogreen Group - Indonesia
- Alfred C Toepfer International GmbH - Germany
- Standard Chartered Bank - UAE
- Iligan Light & Power Inc, Philippines
- Bukit Asam (Persero) Tbk - Indonesia
- Chamber of Mines of South Africa
- Rio Tinto Coal - Australia
- Wood Mackenzie - Singapore
- Savvy Resources Ltd - HongKong
- CNBM International Corporation - China
- Australian Commodity Traders Exchange
- Power Finance Corporation Ltd., India
- Borneo Indobara - Indonesia
- GAC Shipping (India) Pvt Ltd
- Essar Steel Hazira Ltd - India
- Altura Mining Limited, Indonesia
- Carbofer General Trading SA - India
- PetroVietnam Power Coal Import and Supply Company
- Indian Energy Exchange, India
- Central Java Power - Indonesia
- Bukit Makmur.PT - Indonesia
- Semirara Mining Corp, Philippines
- Independent Power Producers Association of India
- Neyveli Lignite Corporation Ltd, - India
- Bulk Trading Sa - Switzerland
- San Jose City I Power Corp, Philippines
- Directorate General of MIneral and Coal - Indonesia
- Medco Energi Mining Internasional
- Coal and Oil Company - UAE
- IHS Mccloskey Coal Group - USA
- Eastern Energy - Thailand
- PNOC Exploration Corporation - Philippines
- Manunggal Multi Energi - Indonesia
- Star Paper Mills Limited - India
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Indian Oil Corporation Limited
- Simpson Spence & Young - Indonesia
- Karbindo Abesyapradhi - Indoneisa
- Miang Besar Coal Terminal - Indonesia
- Orica Mining Services - Indonesia
- Interocean Group of Companies - India
- Electricity Generating Authority of Thailand
- Mercator Lines Limited - India
- Orica Australia Pty. Ltd.
- Heidelberg Cement - Germany
- Coastal Gujarat Power Limited - India
- Tamil Nadu electricity Board
- Leighton Contractors Pty Ltd - Australia
- Timah Investasi Mineral - Indoneisa
- Asmin Koalindo Tuhup - Indonesia
- Deloitte Consulting - India
- Jindal Steel & Power Ltd - India
- India Bulls Power Limited - India
- Indonesian Coal Mining Association
- Minerals Council of Australia
- Oldendorff Carriers - Singapore
- Jorong Barutama Greston.PT - Indonesia
- Larsen & Toubro Limited - India
- Trasteel International SA, Italy
- Antam Resourcindo - Indonesia
- Electricity Authority, New Zealand
- Rashtriya Ispat Nigam Limited - India
- Indo Tambangraya Megah - Indonesia
- Toyota Tsusho Corporation, Japan
- VISA Power Limited - India
- London Commodity Brokers - England
- Indika Energy - Indonesia
- Bharathi Cement Corporation - India
- Bhatia International Limited - India
- Meralco Power Generation, Philippines
- Sindya Power Generating Company Private Ltd
- TNB Fuel Sdn Bhd - Malaysia
- Australian Coal Association
- Singapore Mercantile Exchange
- Latin American Coal - Colombia
- Thiess Contractors Indonesia
- Uttam Galva Steels Limited - India
- OPG Power Generation Pvt Ltd - India
- LBH Netherlands Bv - Netherlands
- Salva Resources Pvt Ltd - India
- AsiaOL BioFuels Corp., Philippines
- Cigading International Bulk Terminal - Indonesia
- Global Coal Blending Company Limited - Australia
- ASAPP Information Group - India
- Grasim Industreis Ltd - India
- Pendopo Energi Batubara - Indonesia
- Lanco Infratech Ltd - India
- GMR Energy Limited - India
- Baramulti Group, Indonesia
- Holcim Trading Pte Ltd - Singapore
- Port Waratah Coal Services - Australia
- Kobexindo Tractors - Indoneisa
- PTC India Limited - India
- Romanian Commodities Exchange
- Eastern Coal Council - USA
- CIMB Investment Bank - Malaysia
- Kalimantan Lumbung Energi - Indonesia
- Global Business Power Corporation, Philippines
- Vizag Seaport Private Limited - India
- Energy Link Ltd, New Zealand
- SMC Global Power, Philippines
- Wilmar Investment Holdings
- Samtan Co., Ltd - South Korea
- Global Green Power PLC Corporation, Philippines
- SN Aboitiz Power Inc, Philippines
- MS Steel International - UAE
- Posco Energy - South Korea
- Attock Cement Pakistan Limited
- Vijayanagar Sugar Pvt Ltd - India
- Therma Luzon, Inc, Philippines
- Sakthi Sugars Limited - India
- Kideco Jaya Agung - Indonesia
- Energy Development Corp, Philippines
- Sical Logistics Limited - India
- Xindia Steels Limited - India
- International Coal Ventures Pvt Ltd - India
- ICICI Bank Limited - India
- Kumho Petrochemical, South Korea
- Intertek Mineral Services - Indonesia
- Petron Corporation, Philippines
- Central Electricity Authority - India
- Siam City Cement PLC, Thailand
- South Luzon Thermal Energy Corporation
- Kartika Selabumi Mining - Indonesia
- Jaiprakash Power Ventures ltd
- Makarim & Taira - Indonesia
- Krishnapatnam Port Company Ltd. - India
- Binh Thuan Hamico - Vietnam
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Renaissance Capital - South Africa
- Gujarat Electricity Regulatory Commission - India
- Anglo American - United Kingdom
- Directorate Of Revenue Intelligence - India
- Bukit Baiduri Energy - Indonesia
- GVK Power & Infra Limited - India
- SMG Consultants - Indonesia
- Commonwealth Bank - Australia
- Marubeni Corporation - India
- Madhucon Powers Ltd - India
- Edison Trading Spa - Italy
- Petrochimia International Co. Ltd.- Taiwan
- PowerSource Philippines DevCo
- Dalmia Cement Bharat India
- Parliament of New Zealand
- Ministry of Transport, Egypt
- Bhushan Steel Limited - India
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Aditya Birla Group - India
- The University of Queensland
- Sarangani Energy Corporation, Philippines
- European Bulk Services B.V. - Netherlands
- Maheswari Brothers Coal Limited - India
- IEA Clean Coal Centre - UK
- Sojitz Corporation - Japan
- Kohat Cement Company Ltd. - Pakistan
- Gujarat Mineral Development Corp Ltd - India
- Cement Manufacturers Association - India
- Globalindo Alam Lestari - Indonesia
- GN Power Mariveles Coal Plant, Philippines
- McConnell Dowell - Australia
- Videocon Industries ltd - India
- Tata Chemicals Ltd - India
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