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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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Saturday, 11 December 21
BUNKER BUYERS LOSE UP TO $5/MT FOR NOT COVERING ENOUGH SUPPLIERS - INTEGR8 FUELS
With the Brent price recently touching the $80 mark and before the Omicron variant concerns pushed it lower, bunker prices reached levels not seen ...
Tuesday, 07 December 21
SUPERCYCLE DEMAND: ARE WE THERE YET? - WOOD MACKENZIE
Taking young children on a long journey is fraught with challenges, not least the inevitable question a few minutes after leaving: are we there yet ...
Tuesday, 07 December 21
COAL WOULD REMAIN ENERGY LEADER FOR AT LEAST 15 YEARS - LIVEMINT
Coal India Ltd (CIL) has been in the eye of the storm after fuel stocks at coal-fuelled power plants depleted in October. Fuel stocks since are bei ...
Tuesday, 07 December 21
GLOBAL SHIPPING OUTLOOK TURNS STABLE FROM POSITIVE ON THE BACK OF PEAKING EARNINGS DURING 2021 - MOODY'S
The outlook for the global shipping industry is changed to stable from positive for the next 12 to 18 months due to demand slightly outstripping su ...
Tuesday, 07 December 21
COAL FIRMS SEE SHARE PRICES SURGE MONDAY, AFTER GOVERNMENT READJUSTS CONTRACT PRICES - GLOBAL TIMES
Share prices of China’s coal enterprises jumped on Monday on the A-share market following a nationwide adjustment to annual thermal coal pric ...
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- Billiton Holdings Pty Ltd - Australia
- Bahari Cakrawala Sebuku - Indonesia
- Barasentosa Lestari - Indonesia
- South Luzon Thermal Energy Corporation
- Ministry of Finance - Indonesia
- Grasim Industreis Ltd - India
- Bulk Trading Sa - Switzerland
- Mintek Dendrill Indonesia
- Trasteel International SA, Italy
- Parliament of New Zealand
- Antam Resourcindo - Indonesia
- Lanco Infratech Ltd - India
- Rashtriya Ispat Nigam Limited - India
- Bangladesh Power Developement Board
- LBH Netherlands Bv - Netherlands
- Kaltim Prima Coal - Indonesia
- Romanian Commodities Exchange
- Bukit Makmur.PT - Indonesia
- Sarangani Energy Corporation, Philippines
- Central Electricity Authority - India
- SN Aboitiz Power Inc, Philippines
- Krishnapatnam Port Company Ltd. - India
- New Zealand Coal & Carbon
- Miang Besar Coal Terminal - Indonesia
- Indika Energy - Indonesia
- Sical Logistics Limited - India
- Xindia Steels Limited - India
- Bharathi Cement Corporation - India
- Sakthi Sugars Limited - India
- Holcim Trading Pte Ltd - Singapore
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Aditya Birla Group - India
- Dalmia Cement Bharat India
- VISA Power Limited - India
- Borneo Indobara - Indonesia
- Offshore Bulk Terminal Pte Ltd, Singapore
- Vizag Seaport Private Limited - India
- Karbindo Abesyapradhi - Indoneisa
- Tata Chemicals Ltd - India
- Rio Tinto Coal - Australia
- Georgia Ports Authority, United States
- Kalimantan Lumbung Energi - Indonesia
- Ministry of Mines - Canada
- Videocon Industries ltd - India
- ICICI Bank Limited - India
- Bank of Tokyo Mitsubishi UFJ Ltd
- Cigading International Bulk Terminal - Indonesia
- CIMB Investment Bank - Malaysia
- Ministry of Transport, Egypt
- Bhoruka Overseas - Indonesia
- Larsen & Toubro Limited - India
- Oldendorff Carriers - Singapore
- Attock Cement Pakistan Limited
- Indogreen Group - Indonesia
- India Bulls Power Limited - India
- Vedanta Resources Plc - India
- Agrawal Coal Company - India
- TNB Fuel Sdn Bhd - Malaysia
- AsiaOL BioFuels Corp., Philippines
- Binh Thuan Hamico - Vietnam
- Sinarmas Energy and Mining - Indonesia
- PNOC Exploration Corporation - Philippines
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Semirara Mining Corp, Philippines
- Commonwealth Bank - Australia
- Singapore Mercantile Exchange
- Kohat Cement Company Ltd. - Pakistan
- Economic Council, Georgia
- Manunggal Multi Energi - Indonesia
- Salva Resources Pvt Ltd - India
- Africa Commodities Group - South Africa
- Alfred C Toepfer International GmbH - Germany
- Renaissance Capital - South Africa
- Savvy Resources Ltd - HongKong
- White Energy Company Limited
- Kepco SPC Power Corporation, Philippines
- Minerals Council of Australia
- Metalloyd Limited - United Kingdom
- Planning Commission, India
- Global Business Power Corporation, Philippines
- Coalindo Energy - Indonesia
- Meenaskhi Energy Private Limited - India
- Kartika Selabumi Mining - Indonesia
- Coal and Oil Company - UAE
- GMR Energy Limited - India
- Ambuja Cements Ltd - India
- Mercuria Energy - Indonesia
- Medco Energi Mining Internasional
- The Treasury - Australian Government
- Indian Energy Exchange, India
- Bhushan Steel Limited - India
- Essar Steel Hazira Ltd - India
- Vijayanagar Sugar Pvt Ltd - India
- OPG Power Generation Pvt Ltd - India
- Posco Energy - South Korea
- Heidelberg Cement - Germany
- Karaikal Port Pvt Ltd - India
- Merrill Lynch Commodities Europe
- Siam City Cement PLC, Thailand
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Asmin Koalindo Tuhup - Indonesia
- Globalindo Alam Lestari - Indonesia
- Kobexindo Tractors - Indoneisa
- Straits Asia Resources Limited - Singapore
- Energy Development Corp, Philippines
- Bukit Baiduri Energy - Indonesia
- Neyveli Lignite Corporation Ltd, - India
- Kideco Jaya Agung - Indonesia
- European Bulk Services B.V. - Netherlands
- Kumho Petrochemical, South Korea
- Semirara Mining and Power Corporation, Philippines
- SMC Global Power, Philippines
- Carbofer General Trading SA - India
- Maharashtra Electricity Regulatory Commission - India
- Star Paper Mills Limited - India
- Mjunction Services Limited - India
- Orica Australia Pty. Ltd.
- Mercator Lines Limited - India
- Jorong Barutama Greston.PT - Indonesia
- Directorate Of Revenue Intelligence - India
- Pipit Mutiara Jaya. PT, Indonesia
- Leighton Contractors Pty Ltd - Australia
- Edison Trading Spa - Italy
- Electricity Authority, New Zealand
- Price Waterhouse Coopers - Russia
- IHS Mccloskey Coal Group - USA
- Eastern Coal Council - USA
- Meralco Power Generation, Philippines
- Chettinad Cement Corporation Ltd - India
- Siam City Cement - Thailand
- TeaM Sual Corporation - Philippines
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- The University of Queensland
- Indian Oil Corporation Limited
- London Commodity Brokers - England
- Riau Bara Harum - Indonesia
- Therma Luzon, Inc, Philippines
- Simpson Spence & Young - Indonesia
- Bayan Resources Tbk. - Indonesia
- Altura Mining Limited, Indonesia
- McConnell Dowell - Australia
- Maheswari Brothers Coal Limited - India
- GVK Power & Infra Limited - India
- Coastal Gujarat Power Limited - India
- IEA Clean Coal Centre - UK
- GAC Shipping (India) Pvt Ltd
- Central Java Power - Indonesia
- Port Waratah Coal Services - Australia
- Parry Sugars Refinery, India
- Sojitz Corporation - Japan
- Power Finance Corporation Ltd., India
- Sree Jayajothi Cements Limited - India
- International Coal Ventures Pvt Ltd - India
- Deloitte Consulting - India
- Kapuas Tunggal Persada - Indonesia
- Standard Chartered Bank - UAE
- Uttam Galva Steels Limited - India
- The State Trading Corporation of India Ltd
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Makarim & Taira - Indonesia
- Petrochimia International Co. Ltd.- Taiwan
- Jaiprakash Power Ventures ltd
- Malabar Cements Ltd - India
- Australian Commodity Traders Exchange
- Chamber of Mines of South Africa
- Anglo American - United Kingdom
- Goldman Sachs - Singapore
- Independent Power Producers Association of India
- CNBM International Corporation - China
- Orica Mining Services - Indonesia
- Gujarat Mineral Development Corp Ltd - India
- Pendopo Energi Batubara - Indonesia
- Latin American Coal - Colombia
- Petron Corporation, Philippines
- Energy Link Ltd, New Zealand
- Ind-Barath Power Infra Limited - India
- Wilmar Investment Holdings
- GN Power Mariveles Coal Plant, Philippines
- Banpu Public Company Limited - Thailand
- Gujarat Electricity Regulatory Commission - India
- PTC India Limited - India
- San Jose City I Power Corp, Philippines
- Thiess Contractors Indonesia
- Samtan Co., Ltd - South Korea
- Aboitiz Power Corporation - Philippines
- PetroVietnam Power Coal Import and Supply Company
- Bukit Asam (Persero) Tbk - Indonesia
- Eastern Energy - Thailand
- Cement Manufacturers Association - India
- Intertek Mineral Services - Indonesia
- Australian Coal Association
- Gujarat Sidhee Cement - India
- Ceylon Electricity Board - Sri Lanka
- Bhatia International Limited - India
- Interocean Group of Companies - India
- Baramulti Group, Indonesia
- PowerSource Philippines DevCo
- SMG Consultants - Indonesia
- Sindya Power Generating Company Private Ltd
- Electricity Generating Authority of Thailand
- MS Steel International - UAE
- Madhucon Powers Ltd - India
- Marubeni Corporation - India
- Indo Tambangraya Megah - Indonesia
- Timah Investasi Mineral - Indoneisa
- ASAPP Information Group - India
- Jindal Steel & Power Ltd - India
- Indonesian Coal Mining Association
- Directorate General of MIneral and Coal - Indonesia
- Formosa Plastics Group - Taiwan
- Toyota Tsusho Corporation, Japan
- Global Green Power PLC Corporation, Philippines
- Thai Mozambique Logistica
- Iligan Light & Power Inc, Philippines
- Wood Mackenzie - Singapore
- Tamil Nadu electricity Board
- Global Coal Blending Company Limited - Australia
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