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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, 25 November 21
SE ASIA POWER DEMAND TO RISE AS STATE SUPPORT MITIGATES COVID-19 IMPACT - FITCH RATINGS
Electricity demand in south-east Asia is likely to increase in 2021, following slow growth or contraction in 2020, thanks to state support that has ...
Thursday, 25 November 21
FITCH RATINGS INCREASES MOST GLOBAL METALS AND MINING PRICE ASSUMPTIONS - FITCH RATINGS
Fitch Ratings has increased most metals and mining price assumptions, particularly those that benefit from increased longer-term demand due to glob ...
Thursday, 25 November 21
CHINA'S COAL PRICE DROPS IN MID-NOVEMBER AMID GOVERNMENT’S SWEEPING MEASURES - GLOBAL TIMES
China’s coal prices have dropped significantly in mid-November compared with the beginning of the month, with the price of coking coal and co ...
Wednesday, 24 November 21
MARKET INSIGHT - INTERMODAL
Inflation is the word that has dominated the meetings of foreign leaders and finance ministers in recent weeks, as rising energy costs, supply chai ...
Wednesday, 24 November 21
WHY THIS MINING ANALYST IS UPBEAT ON THE IRON ORE PRICE FORECAST - MOTLEY FOOL
In many ways, 2021 can be called the year of the iron ore price. Much of the talk of the ASX town this year has revolved around this key economic m ...
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- Kobexindo Tractors - Indoneisa
- Bahari Cakrawala Sebuku - Indonesia
- GMR Energy Limited - India
- International Coal Ventures Pvt Ltd - India
- Vizag Seaport Private Limited - India
- Thiess Contractors Indonesia
- Intertek Mineral Services - Indonesia
- Miang Besar Coal Terminal - Indonesia
- Coastal Gujarat Power Limited - India
- Bukit Baiduri Energy - Indonesia
- Eastern Energy - Thailand
- AsiaOL BioFuels Corp., Philippines
- TNB Fuel Sdn Bhd - Malaysia
- Jaiprakash Power Ventures ltd
- Borneo Indobara - Indonesia
- Indo Tambangraya Megah - Indonesia
- Riau Bara Harum - Indonesia
- Kideco Jaya Agung - Indonesia
- MS Steel International - UAE
- ICICI Bank Limited - India
- Mintek Dendrill Indonesia
- PetroVietnam Power Coal Import and Supply Company
- Agrawal Coal Company - India
- Planning Commission, India
- Thai Mozambique Logistica
- Semirara Mining and Power Corporation, Philippines
- Bukit Asam (Persero) Tbk - Indonesia
- Sindya Power Generating Company Private Ltd
- Indian Energy Exchange, India
- Central Java Power - Indonesia
- Carbofer General Trading SA - India
- Medco Energi Mining Internasional
- Meralco Power Generation, Philippines
- Global Coal Blending Company Limited - Australia
- Sarangani Energy Corporation, Philippines
- Anglo American - United Kingdom
- Simpson Spence & Young - Indonesia
- Kohat Cement Company Ltd. - Pakistan
- Bayan Resources Tbk. - Indonesia
- Attock Cement Pakistan Limited
- Siam City Cement PLC, Thailand
- Wood Mackenzie - Singapore
- Samtan Co., Ltd - South Korea
- LBH Netherlands Bv - Netherlands
- Larsen & Toubro Limited - India
- SMC Global Power, Philippines
- Georgia Ports Authority, United States
- Vijayanagar Sugar Pvt Ltd - India
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Wilmar Investment Holdings
- SN Aboitiz Power Inc, Philippines
- Mjunction Services Limited - India
- Timah Investasi Mineral - Indoneisa
- Salva Resources Pvt Ltd - India
- Iligan Light & Power Inc, Philippines
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Latin American Coal - Colombia
- Romanian Commodities Exchange
- Aboitiz Power Corporation - Philippines
- Port Waratah Coal Services - Australia
- Xindia Steels Limited - India
- Binh Thuan Hamico - Vietnam
- VISA Power Limited - India
- Jorong Barutama Greston.PT - Indonesia
- Kepco SPC Power Corporation, Philippines
- Ambuja Cements Ltd - India
- PNOC Exploration Corporation - Philippines
- Bank of Tokyo Mitsubishi UFJ Ltd
- Pipit Mutiara Jaya. PT, Indonesia
- Madhucon Powers Ltd - India
- Renaissance Capital - South Africa
- Ceylon Electricity Board - Sri Lanka
- Tamil Nadu electricity Board
- CIMB Investment Bank - Malaysia
- Energy Development Corp, Philippines
- Barasentosa Lestari - Indonesia
- OPG Power Generation Pvt Ltd - India
- The State Trading Corporation of India Ltd
- Pendopo Energi Batubara - Indonesia
- Sree Jayajothi Cements Limited - India
- The Treasury - Australian Government
- Holcim Trading Pte Ltd - Singapore
- Merrill Lynch Commodities Europe
- Chamber of Mines of South Africa
- Oldendorff Carriers - Singapore
- Savvy Resources Ltd - HongKong
- Bangladesh Power Developement Board
- PTC India Limited - India
- Karbindo Abesyapradhi - Indoneisa
- Chettinad Cement Corporation Ltd - India
- Alfred C Toepfer International GmbH - Germany
- Therma Luzon, Inc, Philippines
- Kalimantan Lumbung Energi - Indonesia
- Jindal Steel & Power Ltd - India
- Commonwealth Bank - Australia
- Baramulti Group, Indonesia
- Karaikal Port Pvt Ltd - India
- Cement Manufacturers Association - India
- Ministry of Mines - Canada
- Orica Mining Services - Indonesia
- Ministry of Transport, Egypt
- Antam Resourcindo - Indonesia
- London Commodity Brokers - England
- Leighton Contractors Pty Ltd - Australia
- Africa Commodities Group - South Africa
- Bhatia International Limited - India
- Rashtriya Ispat Nigam Limited - India
- Meenaskhi Energy Private Limited - India
- Price Waterhouse Coopers - Russia
- GN Power Mariveles Coal Plant, Philippines
- Videocon Industries ltd - India
- PowerSource Philippines DevCo
- Maharashtra Electricity Regulatory Commission - India
- Gujarat Electricity Regulatory Commission - India
- IHS Mccloskey Coal Group - USA
- Coal and Oil Company - UAE
- Sojitz Corporation - Japan
- Singapore Mercantile Exchange
- Energy Link Ltd, New Zealand
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Parliament of New Zealand
- Neyveli Lignite Corporation Ltd, - India
- Electricity Generating Authority of Thailand
- Banpu Public Company Limited - Thailand
- Cigading International Bulk Terminal - Indonesia
- India Bulls Power Limited - India
- Rio Tinto Coal - Australia
- Asmin Koalindo Tuhup - Indonesia
- Sakthi Sugars Limited - India
- Bharathi Cement Corporation - India
- Kapuas Tunggal Persada - Indonesia
- Gujarat Mineral Development Corp Ltd - India
- Australian Commodity Traders Exchange
- ASAPP Information Group - India
- IEA Clean Coal Centre - UK
- Marubeni Corporation - India
- Kumho Petrochemical, South Korea
- GVK Power & Infra Limited - India
- Bhoruka Overseas - Indonesia
- Straits Asia Resources Limited - Singapore
- Uttam Galva Steels Limited - India
- Bhushan Steel Limited - India
- Electricity Authority, New Zealand
- Global Green Power PLC Corporation, Philippines
- Essar Steel Hazira Ltd - India
- Indika Energy - Indonesia
- Orica Australia Pty. Ltd.
- Krishnapatnam Port Company Ltd. - India
- Sinarmas Energy and Mining - Indonesia
- Grasim Industreis Ltd - India
- Maheswari Brothers Coal Limited - India
- Deloitte Consulting - India
- San Jose City I Power Corp, Philippines
- Lanco Infratech Ltd - India
- Kartika Selabumi Mining - Indonesia
- Vedanta Resources Plc - India
- Minerals Council of Australia
- Dalmia Cement Bharat India
- Aditya Birla Group - India
- Independent Power Producers Association of India
- Parry Sugars Refinery, India
- Mercator Lines Limited - India
- South Luzon Thermal Energy Corporation
- GAC Shipping (India) Pvt Ltd
- New Zealand Coal & Carbon
- Sical Logistics Limited - India
- Indonesian Coal Mining Association
- Tata Chemicals Ltd - India
- Ministry of Finance - Indonesia
- Kaltim Prima Coal - Indonesia
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Gujarat Sidhee Cement - India
- Makarim & Taira - Indonesia
- Power Finance Corporation Ltd., India
- Global Business Power Corporation, Philippines
- Formosa Plastics Group - Taiwan
- Ind-Barath Power Infra Limited - India
- Toyota Tsusho Corporation, Japan
- Billiton Holdings Pty Ltd - Australia
- Directorate Of Revenue Intelligence - India
- White Energy Company Limited
- CNBM International Corporation - China
- Siam City Cement - Thailand
- Posco Energy - South Korea
- Metalloyd Limited - United Kingdom
- SMG Consultants - Indonesia
- Eastern Coal Council - USA
- Star Paper Mills Limited - India
- Australian Coal Association
- Standard Chartered Bank - UAE
- Goldman Sachs - Singapore
- Edison Trading Spa - Italy
- European Bulk Services B.V. - Netherlands
- Petrochimia International Co. Ltd.- Taiwan
- Trasteel International SA, Italy
- Manunggal Multi Energi - Indonesia
- TeaM Sual Corporation - Philippines
- Bulk Trading Sa - Switzerland
- Mercuria Energy - Indonesia
- Petron Corporation, Philippines
- Indian Oil Corporation Limited
- Bukit Makmur.PT - Indonesia
- Directorate General of MIneral and Coal - Indonesia
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Malabar Cements Ltd - India
- Heidelberg Cement - Germany
- The University of Queensland
- Central Electricity Authority - India
- Coalindo Energy - Indonesia
- Altura Mining Limited, Indonesia
- Economic Council, Georgia
- Globalindo Alam Lestari - Indonesia
- Semirara Mining Corp, Philippines
- Offshore Bulk Terminal Pte Ltd, Singapore
- McConnell Dowell - Australia
- Indogreen Group - Indonesia
- Interocean Group of Companies - India
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