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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, 20 January 22
CHINESE COAL JUMPS OVER 6% ON PRE-HOLIDAY SUPPLY WORRY - REUTERS
China’s thermal coal futures soared more than 6% on Wednesday, hitting a level last seen in late November as investors grew concerned over ti ...
Thursday, 20 January 22
VIETNAM: COAL SECTOR SEES POSITIVE PROSPECT IN 2022 - VNA
With many signs of rising demand for coal in various economic sectors in 2022, the Vietnam National Coal – Mineral Industries Group (Vinacomi ...
Wednesday, 19 January 22
MARKET INSIGHT - INTERMODAL
Since the beginning of the year, we have been witnessing the BDI correcting downwards with sizable drops across all segments. Latest similar levels ...
Sunday, 09 January 22
INDONESIA MINISTER SAYS 'EMERGENCY OVER' ON COAL SUPPLY CRUNCH - REUTERS
Indonesia’s power emergency which has triggered a coal export ban is over but the government will still continue to discuss policies in this ...
Wednesday, 05 January 22
CHINA COAL FUTURES SURGE ON SUPPLY WORRIES AMID INDONESIA EXPORT BAN - REUTERS
China’s thermal coal futures surged by as much as 7.8per cent to kick off 2022 on concerns of supply disruptions after Indonesia, its biggest ...
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- Videocon Industries ltd - India
- Kartika Selabumi Mining - Indonesia
- Merrill Lynch Commodities Europe
- Barasentosa Lestari - Indonesia
- Baramulti Group, Indonesia
- White Energy Company Limited
- Uttam Galva Steels Limited - India
- Sinarmas Energy and Mining - Indonesia
- Parry Sugars Refinery, India
- Global Coal Blending Company Limited - Australia
- Singapore Mercantile Exchange
- Makarim & Taira - Indonesia
- Essar Steel Hazira Ltd - India
- Kepco SPC Power Corporation, Philippines
- Indian Energy Exchange, India
- Indogreen Group - Indonesia
- Savvy Resources Ltd - HongKong
- Kaltim Prima Coal - Indonesia
- Minerals Council of Australia
- Economic Council, Georgia
- Borneo Indobara - Indonesia
- CNBM International Corporation - China
- ASAPP Information Group - India
- CIMB Investment Bank - Malaysia
- Electricity Generating Authority of Thailand
- IHS Mccloskey Coal Group - USA
- Globalindo Alam Lestari - Indonesia
- Gujarat Sidhee Cement - India
- Asmin Koalindo Tuhup - Indonesia
- Dalmia Cement Bharat India
- AsiaOL BioFuels Corp., Philippines
- LBH Netherlands Bv - Netherlands
- Gujarat Electricity Regulatory Commission - India
- Sical Logistics Limited - India
- Bahari Cakrawala Sebuku - Indonesia
- Bank of Tokyo Mitsubishi UFJ Ltd
- Parliament of New Zealand
- Semirara Mining and Power Corporation, Philippines
- Altura Mining Limited, Indonesia
- Commonwealth Bank - Australia
- Indian Oil Corporation Limited
- Ambuja Cements Ltd - India
- Kohat Cement Company Ltd. - Pakistan
- Pipit Mutiara Jaya. PT, Indonesia
- Bulk Trading Sa - Switzerland
- Mintek Dendrill Indonesia
- Karbindo Abesyapradhi - Indoneisa
- Bayan Resources Tbk. - Indonesia
- Directorate General of MIneral and Coal - Indonesia
- Leighton Contractors Pty Ltd - Australia
- European Bulk Services B.V. - Netherlands
- Aboitiz Power Corporation - Philippines
- Romanian Commodities Exchange
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Cement Manufacturers Association - India
- Orica Australia Pty. Ltd.
- PetroVietnam Power Coal Import and Supply Company
- Bharathi Cement Corporation - India
- Jaiprakash Power Ventures ltd
- Gujarat Mineral Development Corp Ltd - India
- Antam Resourcindo - Indonesia
- Wilmar Investment Holdings
- Thai Mozambique Logistica
- Meenaskhi Energy Private Limited - India
- The State Trading Corporation of India Ltd
- Kideco Jaya Agung - Indonesia
- Offshore Bulk Terminal Pte Ltd, Singapore
- Sarangani Energy Corporation, Philippines
- Bhatia International Limited - India
- Holcim Trading Pte Ltd - Singapore
- Banpu Public Company Limited - Thailand
- Tata Chemicals Ltd - India
- Heidelberg Cement - Germany
- McConnell Dowell - Australia
- Billiton Holdings Pty Ltd - Australia
- Kalimantan Lumbung Energi - Indonesia
- Therma Luzon, Inc, Philippines
- OPG Power Generation Pvt Ltd - India
- Malabar Cements Ltd - India
- Indo Tambangraya Megah - Indonesia
- Sojitz Corporation - Japan
- Coastal Gujarat Power Limited - India
- Samtan Co., Ltd - South Korea
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Ministry of Finance - Indonesia
- GMR Energy Limited - India
- Edison Trading Spa - Italy
- Kapuas Tunggal Persada - Indonesia
- The Treasury - Australian Government
- Toyota Tsusho Corporation, Japan
- Energy Development Corp, Philippines
- Ministry of Transport, Egypt
- Madhucon Powers Ltd - India
- Vijayanagar Sugar Pvt Ltd - India
- Standard Chartered Bank - UAE
- Cigading International Bulk Terminal - Indonesia
- Ceylon Electricity Board - Sri Lanka
- Vedanta Resources Plc - India
- Eastern Coal Council - USA
- India Bulls Power Limited - India
- Kobexindo Tractors - Indoneisa
- Lanco Infratech Ltd - India
- Iligan Light & Power Inc, Philippines
- Bukit Baiduri Energy - Indonesia
- Goldman Sachs - Singapore
- Directorate Of Revenue Intelligence - India
- Alfred C Toepfer International GmbH - Germany
- Latin American Coal - Colombia
- Neyveli Lignite Corporation Ltd, - India
- Semirara Mining Corp, Philippines
- Kumho Petrochemical, South Korea
- Larsen & Toubro Limited - India
- Australian Commodity Traders Exchange
- ICICI Bank Limited - India
- Medco Energi Mining Internasional
- Maharashtra Electricity Regulatory Commission - India
- GAC Shipping (India) Pvt Ltd
- Jindal Steel & Power Ltd - India
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Xindia Steels Limited - India
- Petrochimia International Co. Ltd.- Taiwan
- GN Power Mariveles Coal Plant, Philippines
- Pendopo Energi Batubara - Indonesia
- Timah Investasi Mineral - Indoneisa
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Coal and Oil Company - UAE
- Manunggal Multi Energi - Indonesia
- International Coal Ventures Pvt Ltd - India
- Meralco Power Generation, Philippines
- Sindya Power Generating Company Private Ltd
- Electricity Authority, New Zealand
- Straits Asia Resources Limited - Singapore
- Port Waratah Coal Services - Australia
- Carbofer General Trading SA - India
- Riau Bara Harum - Indonesia
- Chettinad Cement Corporation Ltd - India
- The University of Queensland
- Sree Jayajothi Cements Limited - India
- Miang Besar Coal Terminal - Indonesia
- Maheswari Brothers Coal Limited - India
- Trasteel International SA, Italy
- Mercator Lines Limited - India
- Karaikal Port Pvt Ltd - India
- Energy Link Ltd, New Zealand
- SMC Global Power, Philippines
- Bukit Makmur.PT - Indonesia
- Australian Coal Association
- Thiess Contractors Indonesia
- London Commodity Brokers - England
- PowerSource Philippines DevCo
- South Luzon Thermal Energy Corporation
- Bukit Asam (Persero) Tbk - Indonesia
- MS Steel International - UAE
- Grasim Industreis Ltd - India
- Ministry of Mines - Canada
- Binh Thuan Hamico - Vietnam
- Posco Energy - South Korea
- Agrawal Coal Company - India
- SN Aboitiz Power Inc, Philippines
- Sakthi Sugars Limited - India
- PNOC Exploration Corporation - Philippines
- Independent Power Producers Association of India
- Renaissance Capital - South Africa
- GVK Power & Infra Limited - India
- Siam City Cement PLC, Thailand
- Bhoruka Overseas - Indonesia
- VISA Power Limited - India
- New Zealand Coal & Carbon
- Attock Cement Pakistan Limited
- TNB Fuel Sdn Bhd - Malaysia
- SMG Consultants - Indonesia
- Chamber of Mines of South Africa
- Central Java Power - Indonesia
- Metalloyd Limited - United Kingdom
- Aditya Birla Group - India
- Mercuria Energy - Indonesia
- Vizag Seaport Private Limited - India
- Wood Mackenzie - Singapore
- Oldendorff Carriers - Singapore
- Global Business Power Corporation, Philippines
- Africa Commodities Group - South Africa
- Coalindo Energy - Indonesia
- IEA Clean Coal Centre - UK
- Bangladesh Power Developement Board
- Global Green Power PLC Corporation, Philippines
- Intertek Mineral Services - Indonesia
- Simpson Spence & Young - Indonesia
- Planning Commission, India
- Georgia Ports Authority, United States
- Deloitte Consulting - India
- Salva Resources Pvt Ltd - India
- Bhushan Steel Limited - India
- Rashtriya Ispat Nigam Limited - India
- TeaM Sual Corporation - Philippines
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Marubeni Corporation - India
- Tamil Nadu electricity Board
- PTC India Limited - India
- Indika Energy - Indonesia
- Formosa Plastics Group - Taiwan
- Krishnapatnam Port Company Ltd. - India
- Mjunction Services Limited - India
- Eastern Energy - Thailand
- Central Electricity Authority - India
- Jorong Barutama Greston.PT - Indonesia
- Ind-Barath Power Infra Limited - India
- Anglo American - United Kingdom
- Price Waterhouse Coopers - Russia
- Petron Corporation, Philippines
- Star Paper Mills Limited - India
- Rio Tinto Coal - Australia
- Orica Mining Services - Indonesia
- Siam City Cement - Thailand
- Power Finance Corporation Ltd., India
- San Jose City I Power Corp, Philippines
- Interocean Group of Companies - India
- Indonesian Coal Mining Association
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