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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, 23 December 21
INDONESIA’S 2022 COAL OUTPUT SEEN BETWEEN 637 MLN-664 MLN T- OFFICIAL - REUTERS
Indonesia’s 2022 coal output is estimated at between 637 million to 664 million tonnes based on production plans currently being finalised, s ...
Thursday, 23 December 21
VALE ANNOUNCES THE SALE OF ITS COAL ASSETS
Vale informs that, on this date, it has entered into a binding agreement with Vulcan to sell the Moatize coal mine and the Nacala Logistics Corrido ...
Thursday, 23 December 21
INDIA: CAPTIVE POWER PRODUCERS URGE GOVT TO ENSURE NORMAL COAL SUPPLIES - PTI
A captive power producers’ association has urged the government for 100 per cent normalisation of coal supply to captive power producers whil ...
Thursday, 23 December 21
MARKET INSIGHT - INTERMODAL
As an outstanding year for the dry bulk freight market comes to a close, so does a thriving year for the SnP market which can only be compared to 2 ...
Tuesday, 14 December 21
COAL LOCK-IN IN SOUTHEAST ASIA PRESENTS A CHALLENGE FOR THE ASIAN DEVELOPMENT BANK'S COAL RETIREMENT PLAN - IEEFA
In August, the Asian Development Bank (ADB) announced an ambitious plan to buy high emissions coal-fired power plants in Southeast Asia and retire ...
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- Siam City Cement - Thailand
- SMG Consultants - Indonesia
- Parliament of New Zealand
- Coastal Gujarat Power Limited - India
- Bukit Asam (Persero) Tbk - Indonesia
- Aboitiz Power Corporation - Philippines
- GAC Shipping (India) Pvt Ltd
- Kobexindo Tractors - Indoneisa
- OPG Power Generation Pvt Ltd - India
- Gujarat Electricity Regulatory Commission - India
- Simpson Spence & Young - Indonesia
- Sinarmas Energy and Mining - Indonesia
- Alfred C Toepfer International GmbH - Germany
- Baramulti Group, Indonesia
- Ind-Barath Power Infra Limited - India
- Merrill Lynch Commodities Europe
- Kepco SPC Power Corporation, Philippines
- The State Trading Corporation of India Ltd
- Interocean Group of Companies - India
- Bukit Makmur.PT - Indonesia
- India Bulls Power Limited - India
- ICICI Bank Limited - India
- Sindya Power Generating Company Private Ltd
- Edison Trading Spa - Italy
- Mercuria Energy - Indonesia
- Bulk Trading Sa - Switzerland
- Kaltim Prima Coal - Indonesia
- Directorate Of Revenue Intelligence - India
- Jorong Barutama Greston.PT - Indonesia
- Ceylon Electricity Board - Sri Lanka
- Bank of Tokyo Mitsubishi UFJ Ltd
- Electricity Generating Authority of Thailand
- Malabar Cements Ltd - India
- Energy Link Ltd, New Zealand
- Mintek Dendrill Indonesia
- Borneo Indobara - Indonesia
- PowerSource Philippines DevCo
- TNB Fuel Sdn Bhd - Malaysia
- Indian Oil Corporation Limited
- Global Green Power PLC Corporation, Philippines
- Xindia Steels Limited - India
- Agrawal Coal Company - India
- Vijayanagar Sugar Pvt Ltd - India
- Maharashtra Electricity Regulatory Commission - India
- ASAPP Information Group - India
- Lanco Infratech Ltd - India
- Dalmia Cement Bharat India
- Essar Steel Hazira Ltd - India
- Coalindo Energy - Indonesia
- Jindal Steel & Power Ltd - India
- Economic Council, Georgia
- Sree Jayajothi Cements Limited - India
- Port Waratah Coal Services - Australia
- Planning Commission, India
- Carbofer General Trading SA - India
- Karaikal Port Pvt Ltd - India
- Semirara Mining and Power Corporation, Philippines
- Offshore Bulk Terminal Pte Ltd, Singapore
- Aditya Birla Group - India
- Thiess Contractors Indonesia
- Altura Mining Limited, Indonesia
- CNBM International Corporation - China
- Pendopo Energi Batubara - Indonesia
- Eastern Energy - Thailand
- Sakthi Sugars Limited - India
- Billiton Holdings Pty Ltd - Australia
- Attock Cement Pakistan Limited
- Tata Chemicals Ltd - India
- Directorate General of MIneral and Coal - Indonesia
- Binh Thuan Hamico - Vietnam
- The Treasury - Australian Government
- Electricity Authority, New Zealand
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Star Paper Mills Limited - India
- Antam Resourcindo - Indonesia
- Kalimantan Lumbung Energi - Indonesia
- Semirara Mining Corp, Philippines
- PTC India Limited - India
- AsiaOL BioFuels Corp., Philippines
- Indogreen Group - Indonesia
- Africa Commodities Group - South Africa
- Ministry of Mines - Canada
- Minerals Council of Australia
- Tamil Nadu electricity Board
- White Energy Company Limited
- Samtan Co., Ltd - South Korea
- Marubeni Corporation - India
- Bayan Resources Tbk. - Indonesia
- Standard Chartered Bank - UAE
- Makarim & Taira - Indonesia
- Vizag Seaport Private Limited - India
- IHS Mccloskey Coal Group - USA
- Krishnapatnam Port Company Ltd. - India
- Sical Logistics Limited - India
- San Jose City I Power Corp, Philippines
- Posco Energy - South Korea
- Bukit Baiduri Energy - Indonesia
- Larsen & Toubro Limited - India
- Indonesian Coal Mining Association
- Cigading International Bulk Terminal - Indonesia
- Independent Power Producers Association of India
- Toyota Tsusho Corporation, Japan
- Petron Corporation, Philippines
- Straits Asia Resources Limited - Singapore
- Kohat Cement Company Ltd. - Pakistan
- GMR Energy Limited - India
- GVK Power & Infra Limited - India
- Parry Sugars Refinery, India
- Mjunction Services Limited - India
- Videocon Industries ltd - India
- Kapuas Tunggal Persada - Indonesia
- Karbindo Abesyapradhi - Indoneisa
- SMC Global Power, Philippines
- Trasteel International SA, Italy
- Bhushan Steel Limited - India
- Rio Tinto Coal - Australia
- PetroVietnam Power Coal Import and Supply Company
- Rashtriya Ispat Nigam Limited - India
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Bhoruka Overseas - Indonesia
- Banpu Public Company Limited - Thailand
- Ministry of Finance - Indonesia
- Kumho Petrochemical, South Korea
- Jaiprakash Power Ventures ltd
- Savvy Resources Ltd - HongKong
- Ministry of Transport, Egypt
- London Commodity Brokers - England
- Chamber of Mines of South Africa
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Goldman Sachs - Singapore
- Central Java Power - Indonesia
- Intertek Mineral Services - Indonesia
- Kideco Jaya Agung - Indonesia
- Commonwealth Bank - Australia
- GN Power Mariveles Coal Plant, Philippines
- Central Electricity Authority - India
- Wood Mackenzie - Singapore
- Indian Energy Exchange, India
- Orica Mining Services - Indonesia
- Orica Australia Pty. Ltd.
- LBH Netherlands Bv - Netherlands
- Medco Energi Mining Internasional
- Indo Tambangraya Megah - Indonesia
- Bangladesh Power Developement Board
- Georgia Ports Authority, United States
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Bharathi Cement Corporation - India
- Gujarat Sidhee Cement - India
- TeaM Sual Corporation - Philippines
- Indika Energy - Indonesia
- The University of Queensland
- Ambuja Cements Ltd - India
- Meralco Power Generation, Philippines
- Global Business Power Corporation, Philippines
- Bhatia International Limited - India
- IEA Clean Coal Centre - UK
- Eastern Coal Council - USA
- Pipit Mutiara Jaya. PT, Indonesia
- PNOC Exploration Corporation - Philippines
- Manunggal Multi Energi - Indonesia
- Madhucon Powers Ltd - India
- South Luzon Thermal Energy Corporation
- Grasim Industreis Ltd - India
- Chettinad Cement Corporation Ltd - India
- Australian Commodity Traders Exchange
- Therma Luzon, Inc, Philippines
- Salva Resources Pvt Ltd - India
- International Coal Ventures Pvt Ltd - India
- Holcim Trading Pte Ltd - Singapore
- Price Waterhouse Coopers - Russia
- New Zealand Coal & Carbon
- Barasentosa Lestari - Indonesia
- Power Finance Corporation Ltd., India
- McConnell Dowell - Australia
- Australian Coal Association
- Mercator Lines Limited - India
- Wilmar Investment Holdings
- Formosa Plastics Group - Taiwan
- Renaissance Capital - South Africa
- Petrochimia International Co. Ltd.- Taiwan
- Romanian Commodities Exchange
- Vedanta Resources Plc - India
- MS Steel International - UAE
- European Bulk Services B.V. - Netherlands
- Oldendorff Carriers - Singapore
- Asmin Koalindo Tuhup - Indonesia
- Global Coal Blending Company Limited - Australia
- Meenaskhi Energy Private Limited - India
- Sojitz Corporation - Japan
- Uttam Galva Steels Limited - India
- Thai Mozambique Logistica
- Heidelberg Cement - Germany
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Leighton Contractors Pty Ltd - Australia
- Kartika Selabumi Mining - Indonesia
- Anglo American - United Kingdom
- Energy Development Corp, Philippines
- SN Aboitiz Power Inc, Philippines
- Coal and Oil Company - UAE
- CIMB Investment Bank - Malaysia
- Globalindo Alam Lestari - Indonesia
- Bahari Cakrawala Sebuku - Indonesia
- Maheswari Brothers Coal Limited - India
- Cement Manufacturers Association - India
- Deloitte Consulting - India
- Iligan Light & Power Inc, Philippines
- Timah Investasi Mineral - Indoneisa
- Siam City Cement PLC, Thailand
- VISA Power Limited - India
- Neyveli Lignite Corporation Ltd, - India
- Gujarat Mineral Development Corp Ltd - India
- Metalloyd Limited - United Kingdom
- Singapore Mercantile Exchange
- Sarangani Energy Corporation, Philippines
- Riau Bara Harum - Indonesia
- Latin American Coal - Colombia
- Miang Besar Coal Terminal - Indonesia
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