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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, 03 February 22
COAL SHORTAGE NOW AT ALARMING LEVELS, SAY ALUMINIUM PRODUCERS - IANS
With no relief in sight despite coal stocks running critically low and production disruptions looming across the Indian aluminium sector, the Alumi ...
Wednesday, 02 February 22
HIGH COKING COAL PRICES PROVIDE GLIMPSE INTO STEELMAKING'S FUTURE - MCKINSEY
Last year was a volatile one in global commodity markets. Demand for coking coal, an essential raw material in the production of steel, was extreme ...
Wednesday, 02 February 22
INDONESIA'S RESTRICTIONS ON COMMODITIES RATTLE MARKETS, MORE MOVES LIKELY - REUTERS
In just the first month of this year, Indonesian policymakers have rattled global markets with restrictions on some of its biggest commodities expo ...
Wednesday, 02 February 22
CHINA'S TOP COAL PRODUCER FORECASTS 28 PCT PROFIT GROWTH IN 2021 - XINHUA
China Shenhua Energy Company Limited, one of the country’s biggest coal producers, said its net profits are expected to jump by 28 percent in ...
Wednesday, 02 February 22
COAL STORAGE IN CHINA’S POWER PLANTS NEAR RECORD HIGHS - XINHUA
Coal inflows into China’s power plants have picked up, bringing their coal storage to near record highs, the National Development and Reform ...
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- Indika Energy - Indonesia
- Energy Link Ltd, New Zealand
- Meenaskhi Energy Private Limited - India
- Globalindo Alam Lestari - Indonesia
- Georgia Ports Authority, United States
- Indian Energy Exchange, India
- Sree Jayajothi Cements Limited - India
- Binh Thuan Hamico - Vietnam
- San Jose City I Power Corp, Philippines
- Parry Sugars Refinery, India
- Global Business Power Corporation, Philippines
- Siam City Cement PLC, Thailand
- Agrawal Coal Company - India
- Meralco Power Generation, Philippines
- Bhoruka Overseas - Indonesia
- Essar Steel Hazira Ltd - India
- Posco Energy - South Korea
- Baramulti Group, Indonesia
- Savvy Resources Ltd - HongKong
- International Coal Ventures Pvt Ltd - India
- Jorong Barutama Greston.PT - Indonesia
- South Luzon Thermal Energy Corporation
- Aditya Birla Group - India
- Deloitte Consulting - India
- Alfred C Toepfer International GmbH - Germany
- Minerals Council of Australia
- Sakthi Sugars Limited - India
- Bayan Resources Tbk. - Indonesia
- Bhatia International Limited - India
- The University of Queensland
- SMC Global Power, Philippines
- Aboitiz Power Corporation - Philippines
- Coastal Gujarat Power Limited - India
- The Treasury - Australian Government
- Heidelberg Cement - Germany
- Manunggal Multi Energi - Indonesia
- Sinarmas Energy and Mining - Indonesia
- Jaiprakash Power Ventures ltd
- ASAPP Information Group - India
- Uttam Galva Steels Limited - India
- Kideco Jaya Agung - Indonesia
- Altura Mining Limited, Indonesia
- OPG Power Generation Pvt Ltd - India
- Vedanta Resources Plc - India
- Ministry of Mines - Canada
- Mjunction Services Limited - India
- Gujarat Electricity Regulatory Commission - India
- Antam Resourcindo - Indonesia
- Asia Pacific Energy Resources Ventures Inc, Philippines
- PowerSource Philippines DevCo
- Mintek Dendrill Indonesia
- Karaikal Port Pvt Ltd - India
- Kapuas Tunggal Persada - Indonesia
- Star Paper Mills Limited - India
- Medco Energi Mining Internasional
- Billiton Holdings Pty Ltd - Australia
- Orica Australia Pty. Ltd.
- Oldendorff Carriers - Singapore
- Merrill Lynch Commodities Europe
- European Bulk Services B.V. - Netherlands
- Timah Investasi Mineral - Indoneisa
- Dalmia Cement Bharat India
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Bangladesh Power Developement Board
- Xindia Steels Limited - India
- Parliament of New Zealand
- Jindal Steel & Power Ltd - India
- New Zealand Coal & Carbon
- Cement Manufacturers Association - India
- Leighton Contractors Pty Ltd - Australia
- Indian Oil Corporation Limited
- Wilmar Investment Holdings
- Ind-Barath Power Infra Limited - India
- Romanian Commodities Exchange
- McConnell Dowell - Australia
- Samtan Co., Ltd - South Korea
- Iligan Light & Power Inc, Philippines
- Orica Mining Services - Indonesia
- Gujarat Mineral Development Corp Ltd - India
- ICICI Bank Limited - India
- Directorate General of MIneral and Coal - Indonesia
- Makarim & Taira - Indonesia
- Australian Coal Association
- SN Aboitiz Power Inc, Philippines
- TeaM Sual Corporation - Philippines
- Madhucon Powers Ltd - India
- Salva Resources Pvt Ltd - India
- Straits Asia Resources Limited - Singapore
- Thai Mozambique Logistica
- Rashtriya Ispat Nigam Limited - India
- Directorate Of Revenue Intelligence - India
- The State Trading Corporation of India Ltd
- Ceylon Electricity Board - Sri Lanka
- Independent Power Producers Association of India
- Planning Commission, India
- Wood Mackenzie - Singapore
- Sarangani Energy Corporation, Philippines
- White Energy Company Limited
- Neyveli Lignite Corporation Ltd, - India
- SMG Consultants - Indonesia
- Bahari Cakrawala Sebuku - Indonesia
- Pendopo Energi Batubara - Indonesia
- Africa Commodities Group - South Africa
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Malabar Cements Ltd - India
- Videocon Industries ltd - India
- Goldman Sachs - Singapore
- Petron Corporation, Philippines
- Karbindo Abesyapradhi - Indoneisa
- Riau Bara Harum - Indonesia
- Coal and Oil Company - UAE
- Electricity Authority, New Zealand
- Holcim Trading Pte Ltd - Singapore
- Global Coal Blending Company Limited - Australia
- PTC India Limited - India
- Intertek Mineral Services - Indonesia
- Bukit Makmur.PT - Indonesia
- Ministry of Finance - Indonesia
- Lanco Infratech Ltd - India
- Tamil Nadu electricity Board
- Indonesian Coal Mining Association
- Pipit Mutiara Jaya. PT, Indonesia
- Bharathi Cement Corporation - India
- Edison Trading Spa - Italy
- MS Steel International - UAE
- Latin American Coal - Colombia
- Semirara Mining Corp, Philippines
- Renaissance Capital - South Africa
- Toyota Tsusho Corporation, Japan
- Vijayanagar Sugar Pvt Ltd - India
- Kepco SPC Power Corporation, Philippines
- Central Java Power - Indonesia
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Electricity Generating Authority of Thailand
- Anglo American - United Kingdom
- Petrochimia International Co. Ltd.- Taiwan
- IEA Clean Coal Centre - UK
- Global Green Power PLC Corporation, Philippines
- Interocean Group of Companies - India
- PNOC Exploration Corporation - Philippines
- Sindya Power Generating Company Private Ltd
- LBH Netherlands Bv - Netherlands
- Larsen & Toubro Limited - India
- Indogreen Group - Indonesia
- Borneo Indobara - Indonesia
- Maharashtra Electricity Regulatory Commission - India
- Commonwealth Bank - Australia
- Coalindo Energy - Indonesia
- IHS Mccloskey Coal Group - USA
- Kaltim Prima Coal - Indonesia
- Marubeni Corporation - India
- Trasteel International SA, Italy
- Formosa Plastics Group - Taiwan
- Barasentosa Lestari - Indonesia
- London Commodity Brokers - England
- Kalimantan Lumbung Energi - Indonesia
- Mercator Lines Limited - India
- Cigading International Bulk Terminal - Indonesia
- India Bulls Power Limited - India
- Energy Development Corp, Philippines
- Chamber of Mines of South Africa
- Vizag Seaport Private Limited - India
- Kumho Petrochemical, South Korea
- Semirara Mining and Power Corporation, Philippines
- PetroVietnam Power Coal Import and Supply Company
- Port Waratah Coal Services - Australia
- Central Electricity Authority - India
- AsiaOL BioFuels Corp., Philippines
- Singapore Mercantile Exchange
- Krishnapatnam Port Company Ltd. - India
- Simpson Spence & Young - Indonesia
- Banpu Public Company Limited - Thailand
- CNBM International Corporation - China
- Maheswari Brothers Coal Limited - India
- GMR Energy Limited - India
- Power Finance Corporation Ltd., India
- Australian Commodity Traders Exchange
- Rio Tinto Coal - Australia
- GN Power Mariveles Coal Plant, Philippines
- Miang Besar Coal Terminal - Indonesia
- VISA Power Limited - India
- GAC Shipping (India) Pvt Ltd
- TNB Fuel Sdn Bhd - Malaysia
- Economic Council, Georgia
- Sojitz Corporation - Japan
- Kohat Cement Company Ltd. - Pakistan
- Siam City Cement - Thailand
- Metalloyd Limited - United Kingdom
- Eastern Energy - Thailand
- Sical Logistics Limited - India
- Bank of Tokyo Mitsubishi UFJ Ltd
- Bhushan Steel Limited - India
- Kartika Selabumi Mining - Indonesia
- Mercuria Energy - Indonesia
- Carbofer General Trading SA - India
- Kobexindo Tractors - Indoneisa
- Ambuja Cements Ltd - India
- Thiess Contractors Indonesia
- Chettinad Cement Corporation Ltd - India
- Attock Cement Pakistan Limited
- Asmin Koalindo Tuhup - Indonesia
- Tata Chemicals Ltd - India
- Eastern Coal Council - USA
- Bukit Asam (Persero) Tbk - Indonesia
- Offshore Bulk Terminal Pte Ltd, Singapore
- CIMB Investment Bank - Malaysia
- Therma Luzon, Inc, Philippines
- Bulk Trading Sa - Switzerland
- Bukit Baiduri Energy - Indonesia
- Ministry of Transport, Egypt
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Standard Chartered Bank - UAE
- GVK Power & Infra Limited - India
- Price Waterhouse Coopers - Russia
- Indo Tambangraya Megah - Indonesia
- Grasim Industreis Ltd - India
- Gujarat Sidhee Cement - India
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