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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, 03 November 21
CHINA TO LAUNCH NEW DATA MONITORING SYSTEM, TARGETING COAL MARKET SPECULATION, HOARDING - GLOBAL TIMES
China’s top economic planner announced on Sunday a new data system for supervising the implementation of medium- and long-term contracts of c ...
Wednesday, 03 November 21
CHINA’S STATE PLANNER SAYS COAL SUPPLY IMPROVING, PRICES STABILISING - REUTERS
China’s coal supply situation has seen significant improvement with joint efforts from coal producers, logistics and downstream users, while ...
Wednesday, 03 November 21
HIGHER COKING COAL PRICES TO PARE PROFITABILITY OF STEELMAKERS IN SECOND HALF OF FY22 - CRISIL RATINGS
The operating margin of primary steelmakers will reduce by a third to 24-26% in the second half of this fiscal versus the first half as input cost ...
Wednesday, 03 November 21
MARKET INSIGHT - INTERMODAL
November is here and soon the all time seasonal favorite “all I want or Christmas is you” by Mariah Carey will be played in radio stati ...
Monday, 01 November 21
COAL PRICES HAVE FURTHER ROOM TO DROP: TOP ECONOMIC PLANNER - GLOBAL TIMES
China’s top economic planner said coal prices have further room to drop on Friday, as the most traded coal futures dropped to below 1,000 yua ...
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- Energy Development Corp, Philippines
- Kartika Selabumi Mining - Indonesia
- Maharashtra Electricity Regulatory Commission - India
- Central Java Power - Indonesia
- Singapore Mercantile Exchange
- IEA Clean Coal Centre - UK
- SN Aboitiz Power Inc, Philippines
- Power Finance Corporation Ltd., India
- Ceylon Electricity Board - Sri Lanka
- Bank of Tokyo Mitsubishi UFJ Ltd
- Global Coal Blending Company Limited - Australia
- Bukit Makmur.PT - Indonesia
- European Bulk Services B.V. - Netherlands
- Manunggal Multi Energi - Indonesia
- Karbindo Abesyapradhi - Indoneisa
- Minerals Council of Australia
- Medco Energi Mining Internasional
- Orica Mining Services - Indonesia
- Chettinad Cement Corporation Ltd - India
- The University of Queensland
- Vizag Seaport Private Limited - India
- Central Electricity Authority - India
- Standard Chartered Bank - UAE
- Independent Power Producers Association of India
- Kumho Petrochemical, South Korea
- Mintek Dendrill Indonesia
- GVK Power & Infra Limited - India
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- OPG Power Generation Pvt Ltd - India
- Eastern Energy - Thailand
- Indian Oil Corporation Limited
- Price Waterhouse Coopers - Russia
- Banpu Public Company Limited - Thailand
- Thai Mozambique Logistica
- Edison Trading Spa - Italy
- Indogreen Group - Indonesia
- Port Waratah Coal Services - Australia
- Madhucon Powers Ltd - India
- Meralco Power Generation, Philippines
- Heidelberg Cement - Germany
- Bulk Trading Sa - Switzerland
- Jindal Steel & Power Ltd - India
- Mjunction Services Limited - India
- Samtan Co., Ltd - South Korea
- Petrochimia International Co. Ltd.- Taiwan
- Semirara Mining Corp, Philippines
- San Jose City I Power Corp, Philippines
- Grasim Industreis Ltd - India
- Indo Tambangraya Megah - Indonesia
- ASAPP Information Group - India
- Therma Luzon, Inc, Philippines
- Ministry of Mines - Canada
- Directorate General of MIneral and Coal - Indonesia
- Energy Link Ltd, New Zealand
- Toyota Tsusho Corporation, Japan
- Marubeni Corporation - India
- GMR Energy Limited - India
- Pipit Mutiara Jaya. PT, Indonesia
- Attock Cement Pakistan Limited
- Antam Resourcindo - Indonesia
- Gujarat Sidhee Cement - India
- Malabar Cements Ltd - India
- Sindya Power Generating Company Private Ltd
- ICICI Bank Limited - India
- Interocean Group of Companies - India
- Sical Logistics Limited - India
- The Treasury - Australian Government
- Jaiprakash Power Ventures ltd
- Baramulti Group, Indonesia
- The State Trading Corporation of India Ltd
- India Bulls Power Limited - India
- Alfred C Toepfer International GmbH - Germany
- Georgia Ports Authority, United States
- PTC India Limited - India
- Indika Energy - Indonesia
- South Luzon Thermal Energy Corporation
- TeaM Sual Corporation - Philippines
- Kaltim Prima Coal - Indonesia
- Makarim & Taira - Indonesia
- Oldendorff Carriers - Singapore
- Mercator Lines Limited - India
- Mercuria Energy - Indonesia
- Siam City Cement PLC, Thailand
- Vijayanagar Sugar Pvt Ltd - India
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Leighton Contractors Pty Ltd - Australia
- Sojitz Corporation - Japan
- Vedanta Resources Plc - India
- Cigading International Bulk Terminal - Indonesia
- Global Business Power Corporation, Philippines
- Posco Energy - South Korea
- Kalimantan Lumbung Energi - Indonesia
- Videocon Industries ltd - India
- Kideco Jaya Agung - Indonesia
- Directorate Of Revenue Intelligence - India
- Intertek Mineral Services - Indonesia
- Riau Bara Harum - Indonesia
- Semirara Mining and Power Corporation, Philippines
- Ind-Barath Power Infra Limited - India
- Gujarat Electricity Regulatory Commission - India
- Agrawal Coal Company - India
- LBH Netherlands Bv - Netherlands
- Globalindo Alam Lestari - Indonesia
- Essar Steel Hazira Ltd - India
- Rio Tinto Coal - Australia
- London Commodity Brokers - England
- Electricity Authority, New Zealand
- CIMB Investment Bank - Malaysia
- Simpson Spence & Young - Indonesia
- Chamber of Mines of South Africa
- Uttam Galva Steels Limited - India
- Anglo American - United Kingdom
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Bhatia International Limited - India
- GN Power Mariveles Coal Plant, Philippines
- Kapuas Tunggal Persada - Indonesia
- Australian Commodity Traders Exchange
- Formosa Plastics Group - Taiwan
- Sakthi Sugars Limited - India
- Parliament of New Zealand
- Thiess Contractors Indonesia
- Karaikal Port Pvt Ltd - India
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Ministry of Transport, Egypt
- Miang Besar Coal Terminal - Indonesia
- Renaissance Capital - South Africa
- Borneo Indobara - Indonesia
- Binh Thuan Hamico - Vietnam
- Romanian Commodities Exchange
- Sree Jayajothi Cements Limited - India
- Savvy Resources Ltd - HongKong
- SMG Consultants - Indonesia
- McConnell Dowell - Australia
- PetroVietnam Power Coal Import and Supply Company
- Latin American Coal - Colombia
- Planning Commission, India
- Asmin Koalindo Tuhup - Indonesia
- Indonesian Coal Mining Association
- IHS Mccloskey Coal Group - USA
- Australian Coal Association
- New Zealand Coal & Carbon
- PowerSource Philippines DevCo
- Altura Mining Limited, Indonesia
- Wood Mackenzie - Singapore
- Siam City Cement - Thailand
- MS Steel International - UAE
- Xindia Steels Limited - India
- Star Paper Mills Limited - India
- Barasentosa Lestari - Indonesia
- Kepco SPC Power Corporation, Philippines
- Jorong Barutama Greston.PT - Indonesia
- Timah Investasi Mineral - Indoneisa
- Carbofer General Trading SA - India
- Billiton Holdings Pty Ltd - Australia
- Merrill Lynch Commodities Europe
- Salva Resources Pvt Ltd - India
- Pendopo Energi Batubara - Indonesia
- Bahari Cakrawala Sebuku - Indonesia
- Iligan Light & Power Inc, Philippines
- Africa Commodities Group - South Africa
- Aditya Birla Group - India
- Global Green Power PLC Corporation, Philippines
- Kobexindo Tractors - Indoneisa
- International Coal Ventures Pvt Ltd - India
- Bukit Baiduri Energy - Indonesia
- Metalloyd Limited - United Kingdom
- Tata Chemicals Ltd - India
- Goldman Sachs - Singapore
- Kohat Cement Company Ltd. - Pakistan
- Gujarat Mineral Development Corp Ltd - India
- Orica Australia Pty. Ltd.
- Coal and Oil Company - UAE
- GAC Shipping (India) Pvt Ltd
- Lanco Infratech Ltd - India
- Maheswari Brothers Coal Limited - India
- Electricity Generating Authority of Thailand
- Petron Corporation, Philippines
- Indian Energy Exchange, India
- Aboitiz Power Corporation - Philippines
- Wilmar Investment Holdings
- Holcim Trading Pte Ltd - Singapore
- Bhushan Steel Limited - India
- Coalindo Energy - Indonesia
- Sarangani Energy Corporation, Philippines
- Meenaskhi Energy Private Limited - India
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Bayan Resources Tbk. - Indonesia
- Bhoruka Overseas - Indonesia
- VISA Power Limited - India
- Economic Council, Georgia
- Deloitte Consulting - India
- Rashtriya Ispat Nigam Limited - India
- Bharathi Cement Corporation - India
- Cement Manufacturers Association - India
- Eastern Coal Council - USA
- Bukit Asam (Persero) Tbk - Indonesia
- Straits Asia Resources Limited - Singapore
- TNB Fuel Sdn Bhd - Malaysia
- SMC Global Power, Philippines
- PNOC Exploration Corporation - Philippines
- Coastal Gujarat Power Limited - India
- CNBM International Corporation - China
- AsiaOL BioFuels Corp., Philippines
- Offshore Bulk Terminal Pte Ltd, Singapore
- Sinarmas Energy and Mining - Indonesia
- Parry Sugars Refinery, India
- Ministry of Finance - Indonesia
- Tamil Nadu electricity Board
- Bangladesh Power Developement Board
- Commonwealth Bank - Australia
- Dalmia Cement Bharat India
- White Energy Company Limited
- Larsen & Toubro Limited - India
- Trasteel International SA, Italy
- Ambuja Cements Ltd - India
- Krishnapatnam Port Company Ltd. - India
- Neyveli Lignite Corporation Ltd, - India
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