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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, 24 November 21
PRICE OF CHINA’S COAL FUTURE DROPS BY 60% AS NATIONWIDE DAILY OUTPUT REACHES OVER 12 MILLION TONS: NDRC - GLOBAL TIMES
China’s daily coal output has now stabilized after reaching over 12 million tons and the price of coal futures has declined to 800 yuan ($125 ...
Friday, 19 November 21
CHINA: COAL SUPPLIES TO STABILIZE FOR COMING COLD SEASON
China is capable of ensuring stable coal supplies this winter and next spring with the increase in coal production and the rising stockpiles at pow ...
Wednesday, 17 November 21
MARKET INSIGHT - INTERMODAL
It has been another declining week for the dry bulk market and evidently, we are seeing asset values gradually losing momentum as well. Following a ...
Tuesday, 16 November 21
EARNINGS RECOVERY IN INDONESIAN COAL TO CONTINUE THROUGH 2021, BUT SLOW IN 2022 - FITCH RATINGS
The recovery in the operating and financial performance of Indonesian coal miners and coal contractors is likely to slow in 2022, but coal prices s ...
Tuesday, 16 November 21
INDONESIA’S 2022 COAL USE FOR POWER GENERATION SET TO RISE 3% - REUTERS
Indonesia’s coal consumption for power generation is likely to rise by 3.1% next year compared to 2021, the head of the country’s state ...
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- Parry Sugars Refinery, India
- Essar Steel Hazira Ltd - India
- PetroVietnam Power Coal Import and Supply Company
- Romanian Commodities Exchange
- Savvy Resources Ltd - HongKong
- Wood Mackenzie - Singapore
- Heidelberg Cement - Germany
- Bhoruka Overseas - Indonesia
- Electricity Generating Authority of Thailand
- Edison Trading Spa - Italy
- Salva Resources Pvt Ltd - India
- Larsen & Toubro Limited - India
- Toyota Tsusho Corporation, Japan
- White Energy Company Limited
- Madhucon Powers Ltd - India
- Siam City Cement PLC, Thailand
- Rashtriya Ispat Nigam Limited - India
- PowerSource Philippines DevCo
- Directorate Of Revenue Intelligence - India
- Bhatia International Limited - India
- GAC Shipping (India) Pvt Ltd
- Bayan Resources Tbk. - Indonesia
- Tata Chemicals Ltd - India
- Chamber of Mines of South Africa
- Thai Mozambique Logistica
- Kideco Jaya Agung - Indonesia
- New Zealand Coal & Carbon
- Sakthi Sugars Limited - India
- Straits Asia Resources Limited - Singapore
- The University of Queensland
- Indonesian Coal Mining Association
- Goldman Sachs - Singapore
- Australian Coal Association
- Ministry of Transport, Egypt
- Posco Energy - South Korea
- Central Java Power - Indonesia
- Gujarat Sidhee Cement - India
- Bank of Tokyo Mitsubishi UFJ Ltd
- Vijayanagar Sugar Pvt Ltd - India
- Mintek Dendrill Indonesia
- Baramulti Group, Indonesia
- Cigading International Bulk Terminal - Indonesia
- TNB Fuel Sdn Bhd - Malaysia
- Coastal Gujarat Power Limited - India
- Agrawal Coal Company - India
- Simpson Spence & Young - Indonesia
- Sical Logistics Limited - India
- Petrochimia International Co. Ltd.- Taiwan
- Pendopo Energi Batubara - Indonesia
- Global Business Power Corporation, Philippines
- Indogreen Group - Indonesia
- GN Power Mariveles Coal Plant, Philippines
- Ministry of Finance - Indonesia
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Neyveli Lignite Corporation Ltd, - India
- ICICI Bank Limited - India
- ASAPP Information Group - India
- European Bulk Services B.V. - Netherlands
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Sree Jayajothi Cements Limited - India
- Parliament of New Zealand
- Altura Mining Limited, Indonesia
- Energy Development Corp, Philippines
- Kapuas Tunggal Persada - Indonesia
- Iligan Light & Power Inc, Philippines
- PNOC Exploration Corporation - Philippines
- MS Steel International - UAE
- Gujarat Electricity Regulatory Commission - India
- Cement Manufacturers Association - India
- Lanco Infratech Ltd - India
- Georgia Ports Authority, United States
- Malabar Cements Ltd - India
- Maharashtra Electricity Regulatory Commission - India
- Standard Chartered Bank - UAE
- Xindia Steels Limited - India
- VISA Power Limited - India
- Indo Tambangraya Megah - Indonesia
- Planning Commission, India
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Globalindo Alam Lestari - Indonesia
- Borneo Indobara - Indonesia
- Timah Investasi Mineral - Indoneisa
- AsiaOL BioFuels Corp., Philippines
- The Treasury - Australian Government
- Central Electricity Authority - India
- London Commodity Brokers - England
- Manunggal Multi Energi - Indonesia
- Africa Commodities Group - South Africa
- IEA Clean Coal Centre - UK
- Riau Bara Harum - Indonesia
- Antam Resourcindo - Indonesia
- Kalimantan Lumbung Energi - Indonesia
- SMG Consultants - Indonesia
- Ind-Barath Power Infra Limited - India
- Uttam Galva Steels Limited - India
- Gujarat Mineral Development Corp Ltd - India
- Formosa Plastics Group - Taiwan
- Barasentosa Lestari - Indonesia
- McConnell Dowell - Australia
- Petron Corporation, Philippines
- Intertek Mineral Services - Indonesia
- Holcim Trading Pte Ltd - Singapore
- Therma Luzon, Inc, Philippines
- SN Aboitiz Power Inc, Philippines
- Renaissance Capital - South Africa
- Price Waterhouse Coopers - Russia
- Makarim & Taira - Indonesia
- GMR Energy Limited - India
- Australian Commodity Traders Exchange
- IHS Mccloskey Coal Group - USA
- Coalindo Energy - Indonesia
- Sindya Power Generating Company Private Ltd
- Singapore Mercantile Exchange
- Electricity Authority, New Zealand
- Ministry of Mines - Canada
- Marubeni Corporation - India
- Carbofer General Trading SA - India
- Offshore Bulk Terminal Pte Ltd, Singapore
- Kohat Cement Company Ltd. - Pakistan
- Vizag Seaport Private Limited - India
- Minerals Council of Australia
- Semirara Mining Corp, Philippines
- Bulk Trading Sa - Switzerland
- Jorong Barutama Greston.PT - Indonesia
- Energy Link Ltd, New Zealand
- OPG Power Generation Pvt Ltd - India
- Coal and Oil Company - UAE
- International Coal Ventures Pvt Ltd - India
- Attock Cement Pakistan Limited
- Samtan Co., Ltd - South Korea
- Eastern Energy - Thailand
- Ceylon Electricity Board - Sri Lanka
- Leighton Contractors Pty Ltd - Australia
- Power Finance Corporation Ltd., India
- Jaiprakash Power Ventures ltd
- South Luzon Thermal Energy Corporation
- Vedanta Resources Plc - India
- The State Trading Corporation of India Ltd
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Indika Energy - Indonesia
- Siam City Cement - Thailand
- Medco Energi Mining Internasional
- Thiess Contractors Indonesia
- Orica Mining Services - Indonesia
- Sarangani Energy Corporation, Philippines
- Commonwealth Bank - Australia
- Eastern Coal Council - USA
- Oldendorff Carriers - Singapore
- Global Green Power PLC Corporation, Philippines
- Kumho Petrochemical, South Korea
- Karbindo Abesyapradhi - Indoneisa
- CIMB Investment Bank - Malaysia
- Metalloyd Limited - United Kingdom
- Aditya Birla Group - India
- San Jose City I Power Corp, Philippines
- Maheswari Brothers Coal Limited - India
- Aboitiz Power Corporation - Philippines
- Kepco SPC Power Corporation, Philippines
- Deloitte Consulting - India
- Sinarmas Energy and Mining - Indonesia
- SMC Global Power, Philippines
- GVK Power & Infra Limited - India
- Mercator Lines Limited - India
- Kobexindo Tractors - Indoneisa
- Sojitz Corporation - Japan
- Kartika Selabumi Mining - Indonesia
- Dalmia Cement Bharat India
- Alfred C Toepfer International GmbH - Germany
- Bhushan Steel Limited - India
- Grasim Industreis Ltd - India
- Chettinad Cement Corporation Ltd - India
- Bukit Baiduri Energy - Indonesia
- Trasteel International SA, Italy
- Ambuja Cements Ltd - India
- Bukit Asam (Persero) Tbk - Indonesia
- Wilmar Investment Holdings
- Banpu Public Company Limited - Thailand
- Bharathi Cement Corporation - India
- Tamil Nadu electricity Board
- Semirara Mining and Power Corporation, Philippines
- Global Coal Blending Company Limited - Australia
- Indian Energy Exchange, India
- Mercuria Energy - Indonesia
- Billiton Holdings Pty Ltd - Australia
- Asmin Koalindo Tuhup - Indonesia
- Indian Oil Corporation Limited
- Jindal Steel & Power Ltd - India
- Directorate General of MIneral and Coal - Indonesia
- Orica Australia Pty. Ltd.
- Independent Power Producers Association of India
- Bahari Cakrawala Sebuku - Indonesia
- Merrill Lynch Commodities Europe
- Meenaskhi Energy Private Limited - India
- Videocon Industries ltd - India
- Meralco Power Generation, Philippines
- Star Paper Mills Limited - India
- Krishnapatnam Port Company Ltd. - India
- Latin American Coal - Colombia
- Interocean Group of Companies - India
- India Bulls Power Limited - India
- Rio Tinto Coal - Australia
- TeaM Sual Corporation - Philippines
- Miang Besar Coal Terminal - Indonesia
- Port Waratah Coal Services - Australia
- PTC India Limited - India
- Bangladesh Power Developement Board
- CNBM International Corporation - China
- Mjunction Services Limited - India
- Economic Council, Georgia
- LBH Netherlands Bv - Netherlands
- Karaikal Port Pvt Ltd - India
- Bukit Makmur.PT - Indonesia
- Pipit Mutiara Jaya. PT, Indonesia
- Kaltim Prima Coal - Indonesia
- Binh Thuan Hamico - Vietnam
- Anglo American - United Kingdom
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