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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.
The Information contained within the website of COALspot.com is intended for informational purposes only and is not intended as professional counsel and should not be used as such.
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Tuesday, 16 November 21
CHINA'S MONTHLY COAL OUTPUT RISES TO HIGHEST SINCE MARCH 2015 - REUTERS
China’s October coal output rose to the highest since at least March 2015, after Beijing approved a raft of coal mine expansions to tame reco ...
Friday, 12 November 21
RUSSIA-INDIA COKING COAL DEAL UNLIKELY TO IMPACT PANAMAX SHIPPING - DREWRY
Russia and India have recently entered into an agreement whereby Russia will supply up to 40 million tonnes of coking coal to India every year. Dre ...
Friday, 12 November 21
ASIA COAL POWER PIPELINE TO SHRINK BY TWO THIRDS AFTER CHINA FINANCE CUT - REUTERS
Asia’s pipeline of proposed coal-fired power plants is expected to shrink from 65 gigawatts to 22 gigawatts following China’s pledge to ...
Friday, 12 November 21
INDONESIAN COAL PRICE REFERENCE TOPS $215 A TON; THE HIGHEST COAL PRICE IN HISTORY
COALspot.com: Indonesian Coal Price Reference in a steep climb for most of second half of 2021 as it reached a pinnacle of $215.01 in November 2021 ...
Thursday, 11 November 21
ASIA COAL POWER PIPELINE TO SHRINK BY TWO THIRDS AFTER CHINA FINANCE CUT - REUTERS
Asia’s pipeline of proposed coal-fired power plants is expected to shrink from 65 gigawatts to 22 gigawatts following China’s pledge to ...
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- GAC Shipping (India) Pvt Ltd
- Leighton Contractors Pty Ltd - Australia
- Timah Investasi Mineral - Indoneisa
- Parliament of New Zealand
- Romanian Commodities Exchange
- Intertek Mineral Services - Indonesia
- Electricity Authority, New Zealand
- Jaiprakash Power Ventures ltd
- Energy Development Corp, Philippines
- Billiton Holdings Pty Ltd - Australia
- Coastal Gujarat Power Limited - India
- Trasteel International SA, Italy
- Makarim & Taira - Indonesia
- Essar Steel Hazira Ltd - India
- Price Waterhouse Coopers - Russia
- Simpson Spence & Young - Indonesia
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Cigading International Bulk Terminal - Indonesia
- Indika Energy - Indonesia
- Standard Chartered Bank - UAE
- Thai Mozambique Logistica
- Aditya Birla Group - India
- Renaissance Capital - South Africa
- The Treasury - Australian Government
- Orica Mining Services - Indonesia
- PowerSource Philippines DevCo
- Indogreen Group - Indonesia
- TNB Fuel Sdn Bhd - Malaysia
- Lanco Infratech Ltd - India
- Coalindo Energy - Indonesia
- Sindya Power Generating Company Private Ltd
- Formosa Plastics Group - Taiwan
- Attock Cement Pakistan Limited
- IEA Clean Coal Centre - UK
- South Luzon Thermal Energy Corporation
- Meenaskhi Energy Private Limited - India
- Sakthi Sugars Limited - India
- PTC India Limited - India
- Mintek Dendrill Indonesia
- Interocean Group of Companies - India
- Bulk Trading Sa - Switzerland
- Savvy Resources Ltd - HongKong
- Karbindo Abesyapradhi - Indoneisa
- Manunggal Multi Energi - Indonesia
- PetroVietnam Power Coal Import and Supply Company
- Kumho Petrochemical, South Korea
- Ambuja Cements Ltd - India
- San Jose City I Power Corp, Philippines
- Jindal Steel & Power Ltd - India
- Larsen & Toubro Limited - India
- Mercator Lines Limited - India
- Toyota Tsusho Corporation, Japan
- Bhatia International Limited - India
- Vedanta Resources Plc - India
- Metalloyd Limited - United Kingdom
- CNBM International Corporation - China
- Gujarat Sidhee Cement - India
- Samtan Co., Ltd - South Korea
- Malabar Cements Ltd - India
- Marubeni Corporation - India
- Petron Corporation, Philippines
- Rio Tinto Coal - Australia
- Sree Jayajothi Cements Limited - India
- Kohat Cement Company Ltd. - Pakistan
- GMR Energy Limited - India
- The State Trading Corporation of India Ltd
- Maheswari Brothers Coal Limited - India
- Kaltim Prima Coal - Indonesia
- Indo Tambangraya Megah - Indonesia
- Riau Bara Harum - Indonesia
- OPG Power Generation Pvt Ltd - India
- Parry Sugars Refinery, India
- White Energy Company Limited
- Pendopo Energi Batubara - Indonesia
- Meralco Power Generation, Philippines
- Mjunction Services Limited - India
- Minerals Council of Australia
- Directorate Of Revenue Intelligence - India
- Posco Energy - South Korea
- Latin American Coal - Colombia
- Kapuas Tunggal Persada - Indonesia
- VISA Power Limited - India
- Asmin Koalindo Tuhup - Indonesia
- Salva Resources Pvt Ltd - India
- Kideco Jaya Agung - Indonesia
- McConnell Dowell - Australia
- Kalimantan Lumbung Energi - Indonesia
- Star Paper Mills Limited - India
- MS Steel International - UAE
- Ministry of Finance - Indonesia
- Bukit Asam (Persero) Tbk - Indonesia
- Kartika Selabumi Mining - Indonesia
- Indian Energy Exchange, India
- Videocon Industries ltd - India
- Bangladesh Power Developement Board
- Sarangani Energy Corporation, Philippines
- Singapore Mercantile Exchange
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Siam City Cement - Thailand
- Bahari Cakrawala Sebuku - Indonesia
- Cement Manufacturers Association - India
- Medco Energi Mining Internasional
- Sical Logistics Limited - India
- Bhoruka Overseas - Indonesia
- Bukit Baiduri Energy - Indonesia
- Carbofer General Trading SA - India
- ASAPP Information Group - India
- Chettinad Cement Corporation Ltd - India
- Maharashtra Electricity Regulatory Commission - India
- Kobexindo Tractors - Indoneisa
- Wilmar Investment Holdings
- GN Power Mariveles Coal Plant, Philippines
- Planning Commission, India
- Chamber of Mines of South Africa
- Borneo Indobara - Indonesia
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Semirara Mining and Power Corporation, Philippines
- Commonwealth Bank - Australia
- Ceylon Electricity Board - Sri Lanka
- Baramulti Group, Indonesia
- Oldendorff Carriers - Singapore
- Australian Coal Association
- Vizag Seaport Private Limited - India
- Bharathi Cement Corporation - India
- Xindia Steels Limited - India
- Altura Mining Limited, Indonesia
- Jorong Barutama Greston.PT - Indonesia
- Sinarmas Energy and Mining - Indonesia
- Heidelberg Cement - Germany
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Australian Commodity Traders Exchange
- Bukit Makmur.PT - Indonesia
- Iligan Light & Power Inc, Philippines
- Ind-Barath Power Infra Limited - India
- Bayan Resources Tbk. - Indonesia
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Binh Thuan Hamico - Vietnam
- Uttam Galva Steels Limited - India
- Bank of Tokyo Mitsubishi UFJ Ltd
- Africa Commodities Group - South Africa
- Banpu Public Company Limited - Thailand
- Miang Besar Coal Terminal - Indonesia
- Offshore Bulk Terminal Pte Ltd, Singapore
- Global Green Power PLC Corporation, Philippines
- Pipit Mutiara Jaya. PT, Indonesia
- Sojitz Corporation - Japan
- Directorate General of MIneral and Coal - Indonesia
- Port Waratah Coal Services - Australia
- Economic Council, Georgia
- Anglo American - United Kingdom
- Rashtriya Ispat Nigam Limited - India
- Mercuria Energy - Indonesia
- India Bulls Power Limited - India
- Barasentosa Lestari - Indonesia
- GVK Power & Infra Limited - India
- Eastern Coal Council - USA
- Semirara Mining Corp, Philippines
- Petrochimia International Co. Ltd.- Taiwan
- Energy Link Ltd, New Zealand
- European Bulk Services B.V. - Netherlands
- Gujarat Electricity Regulatory Commission - India
- Vijayanagar Sugar Pvt Ltd - India
- Deloitte Consulting - India
- ICICI Bank Limited - India
- Bhushan Steel Limited - India
- SN Aboitiz Power Inc, Philippines
- CIMB Investment Bank - Malaysia
- International Coal Ventures Pvt Ltd - India
- Power Finance Corporation Ltd., India
- Straits Asia Resources Limited - Singapore
- LBH Netherlands Bv - Netherlands
- Krishnapatnam Port Company Ltd. - India
- Tamil Nadu electricity Board
- Merrill Lynch Commodities Europe
- Georgia Ports Authority, United States
- IHS Mccloskey Coal Group - USA
- Central Java Power - Indonesia
- SMG Consultants - Indonesia
- Dalmia Cement Bharat India
- Alfred C Toepfer International GmbH - Germany
- Ministry of Mines - Canada
- Tata Chemicals Ltd - India
- PNOC Exploration Corporation - Philippines
- Kepco SPC Power Corporation, Philippines
- Antam Resourcindo - Indonesia
- Gujarat Mineral Development Corp Ltd - India
- Eastern Energy - Thailand
- Holcim Trading Pte Ltd - Singapore
- Agrawal Coal Company - India
- Independent Power Producers Association of India
- Coal and Oil Company - UAE
- SMC Global Power, Philippines
- TeaM Sual Corporation - Philippines
- The University of Queensland
- London Commodity Brokers - England
- Karaikal Port Pvt Ltd - India
- Global Business Power Corporation, Philippines
- Madhucon Powers Ltd - India
- Grasim Industreis Ltd - India
- Edison Trading Spa - Italy
- Goldman Sachs - Singapore
- Aboitiz Power Corporation - Philippines
- Orica Australia Pty. Ltd.
- Electricity Generating Authority of Thailand
- Ministry of Transport, Egypt
- Indonesian Coal Mining Association
- AsiaOL BioFuels Corp., Philippines
- New Zealand Coal & Carbon
- Globalindo Alam Lestari - Indonesia
- Thiess Contractors Indonesia
- Global Coal Blending Company Limited - Australia
- Siam City Cement PLC, Thailand
- Neyveli Lignite Corporation Ltd, - India
- Central Electricity Authority - India
- Therma Luzon, Inc, Philippines
- Indian Oil Corporation Limited
- Wood Mackenzie - Singapore
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