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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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Wednesday, 01 December 21
MARKET INSIGHT - INTERMODAL
Essentially, anyone involved in the shipping and commodity markets still struggle with commodity supply issues and skyrocketing prices in the conte ...
Tuesday, 30 November 21
CHINA'S TOP ECONOMIC PLANNER SUMMONS COAL PRODUCERS; LONG-TERM PRICING MECHANISM IS ADVISED - GLOBAL TIMES
China’s top economic planner the National Development and Reform Commission (NDRC) said on Monday that they summoned coal producers for a hea ...
Tuesday, 30 November 21
CHINA'S COAL PRICES PLUNGE AFTER GOVT SIGNALS MORE PRICE REGULATION - REUTERS
China’s thermal coal futures dropped 5.6% on Monday after the state economic planner signaled further regulations for prices of the dirty pow ...
Friday, 26 November 21
AS COAL MARKET STABILIZES, CHINA STEPS UP NATURAL GAS SUPPLY TO MEET WINTER DEMAND - GLOBAL TIMES
The daily supply of natural gas in China has exceeded 1 billion cubic meters (bcm) since November began, up 11 percent year-on-year, data from stat ...
Friday, 26 November 21
CHINA FINDS COMPLIANCE PROBLEMS IN COAL PRICE INDEX PROBE - REUTERS
China’s state planner on Wednesday said it had discovered some “noncompliant” behaviour among coal price index providers as it an ...
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- Romanian Commodities Exchange
- Coalindo Energy - Indonesia
- Edison Trading Spa - Italy
- Orica Mining Services - Indonesia
- Kalimantan Lumbung Energi - Indonesia
- Mercator Lines Limited - India
- Global Coal Blending Company Limited - Australia
- Indian Oil Corporation Limited
- Kapuas Tunggal Persada - Indonesia
- GN Power Mariveles Coal Plant, Philippines
- Intertek Mineral Services - Indonesia
- Global Green Power PLC Corporation, Philippines
- India Bulls Power Limited - India
- Kartika Selabumi Mining - Indonesia
- Savvy Resources Ltd - HongKong
- Chettinad Cement Corporation Ltd - India
- Latin American Coal - Colombia
- Australian Commodity Traders Exchange
- The State Trading Corporation of India Ltd
- Posco Energy - South Korea
- Sree Jayajothi Cements Limited - India
- Uttam Galva Steels Limited - India
- Maharashtra Electricity Regulatory Commission - India
- Ind-Barath Power Infra Limited - India
- Kumho Petrochemical, South Korea
- Globalindo Alam Lestari - Indonesia
- Central Java Power - Indonesia
- Semirara Mining Corp, Philippines
- Mintek Dendrill Indonesia
- Indonesian Coal Mining Association
- Jaiprakash Power Ventures ltd
- Energy Development Corp, Philippines
- McConnell Dowell - Australia
- Bank of Tokyo Mitsubishi UFJ Ltd
- Riau Bara Harum - Indonesia
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Attock Cement Pakistan Limited
- Gujarat Mineral Development Corp Ltd - India
- Sinarmas Energy and Mining - Indonesia
- IEA Clean Coal Centre - UK
- CIMB Investment Bank - Malaysia
- Heidelberg Cement - Germany
- Vedanta Resources Plc - India
- Sindya Power Generating Company Private Ltd
- Siam City Cement - Thailand
- Antam Resourcindo - Indonesia
- The Treasury - Australian Government
- Electricity Authority, New Zealand
- Banpu Public Company Limited - Thailand
- Bukit Baiduri Energy - Indonesia
- Xindia Steels Limited - India
- White Energy Company Limited
- Ministry of Finance - Indonesia
- Larsen & Toubro Limited - India
- Parliament of New Zealand
- Wood Mackenzie - Singapore
- Asmin Koalindo Tuhup - Indonesia
- Deloitte Consulting - India
- Electricity Generating Authority of Thailand
- Georgia Ports Authority, United States
- Lanco Infratech Ltd - India
- Cigading International Bulk Terminal - Indonesia
- Eastern Coal Council - USA
- Miang Besar Coal Terminal - Indonesia
- ICICI Bank Limited - India
- The University of Queensland
- Petron Corporation, Philippines
- Kobexindo Tractors - Indoneisa
- Aboitiz Power Corporation - Philippines
- Rashtriya Ispat Nigam Limited - India
- Goldman Sachs - Singapore
- Oldendorff Carriers - Singapore
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Kohat Cement Company Ltd. - Pakistan
- Bayan Resources Tbk. - Indonesia
- Coastal Gujarat Power Limited - India
- Sakthi Sugars Limited - India
- Bhoruka Overseas - Indonesia
- Altura Mining Limited, Indonesia
- Eastern Energy - Thailand
- Vizag Seaport Private Limited - India
- Thiess Contractors Indonesia
- Manunggal Multi Energi - Indonesia
- PetroVietnam Power Coal Import and Supply Company
- Barasentosa Lestari - Indonesia
- Madhucon Powers Ltd - India
- Agrawal Coal Company - India
- Ceylon Electricity Board - Sri Lanka
- Krishnapatnam Port Company Ltd. - India
- Grasim Industreis Ltd - India
- Indo Tambangraya Megah - Indonesia
- Renaissance Capital - South Africa
- Makarim & Taira - Indonesia
- Price Waterhouse Coopers - Russia
- ASAPP Information Group - India
- Port Waratah Coal Services - Australia
- Malabar Cements Ltd - India
- GVK Power & Infra Limited - India
- Anglo American - United Kingdom
- LBH Netherlands Bv - Netherlands
- Ambuja Cements Ltd - India
- Thai Mozambique Logistica
- Essar Steel Hazira Ltd - India
- Merrill Lynch Commodities Europe
- South Luzon Thermal Energy Corporation
- Marubeni Corporation - India
- Metalloyd Limited - United Kingdom
- Alfred C Toepfer International GmbH - Germany
- Bulk Trading Sa - Switzerland
- IHS Mccloskey Coal Group - USA
- London Commodity Brokers - England
- Energy Link Ltd, New Zealand
- Meralco Power Generation, Philippines
- Tamil Nadu electricity Board
- Rio Tinto Coal - Australia
- Borneo Indobara - Indonesia
- Siam City Cement PLC, Thailand
- Dalmia Cement Bharat India
- Petrochimia International Co. Ltd.- Taiwan
- Offshore Bulk Terminal Pte Ltd, Singapore
- Indian Energy Exchange, India
- AsiaOL BioFuels Corp., Philippines
- Tata Chemicals Ltd - India
- SMG Consultants - Indonesia
- Maheswari Brothers Coal Limited - India
- Leighton Contractors Pty Ltd - Australia
- Billiton Holdings Pty Ltd - Australia
- Wilmar Investment Holdings
- Pendopo Energi Batubara - Indonesia
- Gujarat Sidhee Cement - India
- SMC Global Power, Philippines
- Timah Investasi Mineral - Indoneisa
- New Zealand Coal & Carbon
- Coal and Oil Company - UAE
- Ministry of Mines - Canada
- Videocon Industries ltd - India
- Kepco SPC Power Corporation, Philippines
- Meenaskhi Energy Private Limited - India
- Bharathi Cement Corporation - India
- Semirara Mining and Power Corporation, Philippines
- Sical Logistics Limited - India
- VISA Power Limited - India
- Bhatia International Limited - India
- Baramulti Group, Indonesia
- Karbindo Abesyapradhi - Indoneisa
- Commonwealth Bank - Australia
- GAC Shipping (India) Pvt Ltd
- Vijayanagar Sugar Pvt Ltd - India
- Parry Sugars Refinery, India
- Interocean Group of Companies - India
- Indika Energy - Indonesia
- GMR Energy Limited - India
- Formosa Plastics Group - Taiwan
- TeaM Sual Corporation - Philippines
- Bangladesh Power Developement Board
- Mercuria Energy - Indonesia
- Global Business Power Corporation, Philippines
- Simpson Spence & Young - Indonesia
- Power Finance Corporation Ltd., India
- European Bulk Services B.V. - Netherlands
- Singapore Mercantile Exchange
- Straits Asia Resources Limited - Singapore
- Therma Luzon, Inc, Philippines
- Sojitz Corporation - Japan
- Star Paper Mills Limited - India
- Planning Commission, India
- Jindal Steel & Power Ltd - India
- Salva Resources Pvt Ltd - India
- Karaikal Port Pvt Ltd - India
- San Jose City I Power Corp, Philippines
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Chamber of Mines of South Africa
- Kideco Jaya Agung - Indonesia
- Bukit Makmur.PT - Indonesia
- OPG Power Generation Pvt Ltd - India
- Medco Energi Mining Internasional
- PowerSource Philippines DevCo
- Bhushan Steel Limited - India
- Kaltim Prima Coal - Indonesia
- Iligan Light & Power Inc, Philippines
- Cement Manufacturers Association - India
- Sarangani Energy Corporation, Philippines
- Minerals Council of Australia
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Africa Commodities Group - South Africa
- Directorate Of Revenue Intelligence - India
- Pipit Mutiara Jaya. PT, Indonesia
- Economic Council, Georgia
- Trasteel International SA, Italy
- Indogreen Group - Indonesia
- Bukit Asam (Persero) Tbk - Indonesia
- PTC India Limited - India
- International Coal Ventures Pvt Ltd - India
- Samtan Co., Ltd - South Korea
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Binh Thuan Hamico - Vietnam
- Carbofer General Trading SA - India
- Independent Power Producers Association of India
- Directorate General of MIneral and Coal - Indonesia
- Bahari Cakrawala Sebuku - Indonesia
- Neyveli Lignite Corporation Ltd, - India
- Central Electricity Authority - India
- MS Steel International - UAE
- Holcim Trading Pte Ltd - Singapore
- SN Aboitiz Power Inc, Philippines
- Toyota Tsusho Corporation, Japan
- Aditya Birla Group - India
- PNOC Exploration Corporation - Philippines
- Jorong Barutama Greston.PT - Indonesia
- Australian Coal Association
- TNB Fuel Sdn Bhd - Malaysia
- Ministry of Transport, Egypt
- Orica Australia Pty. Ltd.
- Mjunction Services Limited - India
- CNBM International Corporation - China
- Gujarat Electricity Regulatory Commission - India
- Standard Chartered Bank - UAE
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