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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.
The Information contained within the website of COALspot.com is intended for informational purposes only and is not intended as professional counsel and should not be used as such.
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Wednesday, 05 January 22
INDONESIA WARNS COAL SUPPLY CRUNCH NOT OVER AS CHINA PRICES RALLY - REUTERS
Indonesia has warned that its coal supply situation remains critical, ahead of Wednesday’s (Jan 5) review of its export ban, unnerving global ...
Tuesday, 28 December 21
INDIA'S ADANI NEARS FIRST COAL SHIPMENT FROM SHUNNED AUSTRALIAN MINE - REUTERS
India’s Adani Group ADEL.NS is preparing to ship the first coal cargo from Australia’s most controversial mine, after battling a seven- ...
Thursday, 23 December 21
COAL TO STAY AS MAJOR SOURCE OF ENERGY IN FORESEEABLE FUTURE: JOSHI - BUSINESS STANDARD
Coal will stay as a major source of energy in the foreseeable future as it is an affordable source of energy with substantial reserve, Parliament w ...
Thursday, 23 December 21
ANNUAL U.S. COAL-FIRED ELECTRICITY GENERATION WILL INCREASE FOR THE FIRST TIME SINCE 2014 - EIA
From December 20 through December 30, Today in Energy will feature some of our favorite articles from 2021. Today’s article was originally pu ...
Thursday, 23 December 21
COAL DEMAND TO PEAK IN INDIA BY 2030, WILL BACK UP RENEWABLES: NITI REPORT - BUSINESS STANDARD
Coal will remain India’s mainstay energy source and the country will shape global demand this decade, two reports have said a month after the ...
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- Kumho Petrochemical, South Korea
- Offshore Bulk Terminal Pte Ltd, Singapore
- GVK Power & Infra Limited - India
- Heidelberg Cement - Germany
- VISA Power Limited - India
- The University of Queensland
- South Luzon Thermal Energy Corporation
- Holcim Trading Pte Ltd - Singapore
- Malabar Cements Ltd - India
- Kohat Cement Company Ltd. - Pakistan
- LBH Netherlands Bv - Netherlands
- Indo Tambangraya Megah - Indonesia
- Bank of Tokyo Mitsubishi UFJ Ltd
- Globalindo Alam Lestari - Indonesia
- Mintek Dendrill Indonesia
- Bharathi Cement Corporation - India
- Jorong Barutama Greston.PT - Indonesia
- Kideco Jaya Agung - Indonesia
- Madhucon Powers Ltd - India
- Goldman Sachs - Singapore
- Ministry of Mines - Canada
- Agrawal Coal Company - India
- Indian Energy Exchange, India
- The State Trading Corporation of India Ltd
- Barasentosa Lestari - Indonesia
- Anglo American - United Kingdom
- Bahari Cakrawala Sebuku - Indonesia
- White Energy Company Limited
- Bhatia International Limited - India
- Orica Australia Pty. Ltd.
- Siam City Cement - Thailand
- Meenaskhi Energy Private Limited - India
- Commonwealth Bank - Australia
- Global Business Power Corporation, Philippines
- CIMB Investment Bank - Malaysia
- Ind-Barath Power Infra Limited - India
- Semirara Mining Corp, Philippines
- Directorate General of MIneral and Coal - Indonesia
- Electricity Generating Authority of Thailand
- GN Power Mariveles Coal Plant, Philippines
- Wilmar Investment Holdings
- Merrill Lynch Commodities Europe
- Tamil Nadu electricity Board
- Standard Chartered Bank - UAE
- IEA Clean Coal Centre - UK
- Interocean Group of Companies - India
- Therma Luzon, Inc, Philippines
- Energy Link Ltd, New Zealand
- Meralco Power Generation, Philippines
- Ministry of Finance - Indonesia
- Makarim & Taira - Indonesia
- SMG Consultants - Indonesia
- Krishnapatnam Port Company Ltd. - India
- Indian Oil Corporation Limited
- PowerSource Philippines DevCo
- Australian Commodity Traders Exchange
- CNBM International Corporation - China
- Eastern Energy - Thailand
- Lanco Infratech Ltd - India
- Parliament of New Zealand
- Karbindo Abesyapradhi - Indoneisa
- Directorate Of Revenue Intelligence - India
- Africa Commodities Group - South Africa
- Bhushan Steel Limited - India
- Asia Pacific Energy Resources Ventures Inc, Philippines
- London Commodity Brokers - England
- Rio Tinto Coal - Australia
- Dalmia Cement Bharat India
- Minerals Council of Australia
- Formosa Plastics Group - Taiwan
- Toyota Tsusho Corporation, Japan
- Ceylon Electricity Board - Sri Lanka
- Samtan Co., Ltd - South Korea
- Romanian Commodities Exchange
- Jaiprakash Power Ventures ltd
- PetroVietnam Power Coal Import and Supply Company
- Sical Logistics Limited - India
- Xindia Steels Limited - India
- Baramulti Group, Indonesia
- Gujarat Mineral Development Corp Ltd - India
- Altura Mining Limited, Indonesia
- Maharashtra Electricity Regulatory Commission - India
- Trasteel International SA, Italy
- Sarangani Energy Corporation, Philippines
- New Zealand Coal & Carbon
- Singapore Mercantile Exchange
- Thiess Contractors Indonesia
- Sakthi Sugars Limited - India
- Binh Thuan Hamico - Vietnam
- Chamber of Mines of South Africa
- International Coal Ventures Pvt Ltd - India
- Independent Power Producers Association of India
- Bukit Asam (Persero) Tbk - Indonesia
- Mercuria Energy - Indonesia
- Aditya Birla Group - India
- Simpson Spence & Young - Indonesia
- Leighton Contractors Pty Ltd - Australia
- Global Green Power PLC Corporation, Philippines
- Global Coal Blending Company Limited - Australia
- Price Waterhouse Coopers - Russia
- San Jose City I Power Corp, Philippines
- Energy Development Corp, Philippines
- Indogreen Group - Indonesia
- Bangladesh Power Developement Board
- Oldendorff Carriers - Singapore
- TNB Fuel Sdn Bhd - Malaysia
- Eastern Coal Council - USA
- SMC Global Power, Philippines
- Jindal Steel & Power Ltd - India
- Kapuas Tunggal Persada - Indonesia
- Bulk Trading Sa - Switzerland
- Bhoruka Overseas - Indonesia
- ASAPP Information Group - India
- Vijayanagar Sugar Pvt Ltd - India
- Larsen & Toubro Limited - India
- Ministry of Transport, Egypt
- Karaikal Port Pvt Ltd - India
- MS Steel International - UAE
- Bukit Baiduri Energy - Indonesia
- Borneo Indobara - Indonesia
- Miang Besar Coal Terminal - Indonesia
- Semirara Mining and Power Corporation, Philippines
- GAC Shipping (India) Pvt Ltd
- The Treasury - Australian Government
- Electricity Authority, New Zealand
- Straits Asia Resources Limited - Singapore
- Kobexindo Tractors - Indoneisa
- PNOC Exploration Corporation - Philippines
- Rashtriya Ispat Nigam Limited - India
- AsiaOL BioFuels Corp., Philippines
- Pendopo Energi Batubara - Indonesia
- Star Paper Mills Limited - India
- Sree Jayajothi Cements Limited - India
- Billiton Holdings Pty Ltd - Australia
- Indika Energy - Indonesia
- Ambuja Cements Ltd - India
- Wood Mackenzie - Singapore
- Central Java Power - Indonesia
- Kalimantan Lumbung Energi - Indonesia
- Pipit Mutiara Jaya. PT, Indonesia
- Iligan Light & Power Inc, Philippines
- Siam City Cement PLC, Thailand
- Coal and Oil Company - UAE
- Tata Chemicals Ltd - India
- Kartika Selabumi Mining - Indonesia
- Medco Energi Mining Internasional
- Kaltim Prima Coal - Indonesia
- Bukit Makmur.PT - Indonesia
- Neyveli Lignite Corporation Ltd, - India
- India Bulls Power Limited - India
- Mercator Lines Limited - India
- IHS Mccloskey Coal Group - USA
- OPG Power Generation Pvt Ltd - India
- Maheswari Brothers Coal Limited - India
- Attock Cement Pakistan Limited
- Gujarat Electricity Regulatory Commission - India
- Grasim Industreis Ltd - India
- Coastal Gujarat Power Limited - India
- Orica Mining Services - Indonesia
- TeaM Sual Corporation - Philippines
- Petron Corporation, Philippines
- SN Aboitiz Power Inc, Philippines
- Timah Investasi Mineral - Indoneisa
- Videocon Industries ltd - India
- Georgia Ports Authority, United States
- Gujarat Sidhee Cement - India
- Australian Coal Association
- Cigading International Bulk Terminal - Indonesia
- Vizag Seaport Private Limited - India
- Edison Trading Spa - Italy
- Savvy Resources Ltd - HongKong
- Cement Manufacturers Association - India
- Planning Commission, India
- European Bulk Services B.V. - Netherlands
- Central Electricity Authority - India
- Sojitz Corporation - Japan
- ICICI Bank Limited - India
- Asmin Koalindo Tuhup - Indonesia
- Aboitiz Power Corporation - Philippines
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Deloitte Consulting - India
- Marubeni Corporation - India
- PTC India Limited - India
- Antam Resourcindo - Indonesia
- Mjunction Services Limited - India
- Latin American Coal - Colombia
- Power Finance Corporation Ltd., India
- Riau Bara Harum - Indonesia
- Petrochimia International Co. Ltd.- Taiwan
- Sinarmas Energy and Mining - Indonesia
- Sindya Power Generating Company Private Ltd
- Metalloyd Limited - United Kingdom
- Port Waratah Coal Services - Australia
- Posco Energy - South Korea
- Thai Mozambique Logistica
- Chettinad Cement Corporation Ltd - India
- Manunggal Multi Energi - Indonesia
- Kepco SPC Power Corporation, Philippines
- Economic Council, Georgia
- Banpu Public Company Limited - Thailand
- Salva Resources Pvt Ltd - India
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Carbofer General Trading SA - India
- Alfred C Toepfer International GmbH - Germany
- Vedanta Resources Plc - India
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Intertek Mineral Services - Indonesia
- GMR Energy Limited - India
- Bayan Resources Tbk. - Indonesia
- Indonesian Coal Mining Association
- Uttam Galva Steels Limited - India
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Renaissance Capital - South Africa
- Parry Sugars Refinery, India
- McConnell Dowell - Australia
- Coalindo Energy - Indonesia
- Essar Steel Hazira Ltd - India
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