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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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Saturday, 30 October 21
CHINA'S COAL PRICES SEE BIGGEST WEEKLY FALL IN MORE THAN 5 YEARS - REUTERS
China’s coal futures prices saw their biggest fall in more than five years after the powerful state planner said there is still room to adjus ...
Saturday, 30 October 21
G-20 LEADERS PREPARE STATEMENT TO STOP FUNDING FOREIGN COAL PLANTS - BLOOMBERG
Leaders of the Group of 20 wealthy economies are preparing to pledge to stop funding foreign coal-fired plants, but are still wrangling over climat ...
Friday, 29 October 21
APAC THERMAL COAL SUPPLY TO REMAIN TIGHT AS WINTER LOOMS - FITCH RATINGS
APAC thermal coal prices have surged, hitting historically high levels. The benchmark Newcastle 6,000kcal/kg grade coal reached USD228/tonne in mid ...
Thursday, 28 October 21
CANADA BAN ON SHIPPING COAL WOULD EQUAL SCRAPPING AS MANY AS 3 MILLION CARS - IEEFA
Canada ban on shipping coal would equal scrapping as many as 3 million cars
Change in Canadian policy could have major implications ...
Tuesday, 26 October 21
CHINA'S COAL-RICH SHANXI BEEFS UP COAL PRODUCTION - XINHUA
Major coal producers in north China’s Shanxi Province, a leading coal-producing region of the country, have beefed up production to ensure en ...
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- Kartika Selabumi Mining - Indonesia
- Australian Commodity Traders Exchange
- Trasteel International SA, Italy
- LBH Netherlands Bv - Netherlands
- Ind-Barath Power Infra Limited - India
- Power Finance Corporation Ltd., India
- Semirara Mining and Power Corporation, Philippines
- Mintek Dendrill Indonesia
- Sinarmas Energy and Mining - Indonesia
- Kumho Petrochemical, South Korea
- IEA Clean Coal Centre - UK
- Attock Cement Pakistan Limited
- Minerals Council of Australia
- Bhatia International Limited - India
- Star Paper Mills Limited - India
- Parry Sugars Refinery, India
- Altura Mining Limited, Indonesia
- Directorate General of MIneral and Coal - Indonesia
- Edison Trading Spa - Italy
- Commonwealth Bank - Australia
- Gujarat Electricity Regulatory Commission - India
- Pendopo Energi Batubara - Indonesia
- Savvy Resources Ltd - HongKong
- Eastern Coal Council - USA
- Videocon Industries ltd - India
- South Luzon Thermal Energy Corporation
- Globalindo Alam Lestari - Indonesia
- Ceylon Electricity Board - Sri Lanka
- Romanian Commodities Exchange
- Siam City Cement PLC, Thailand
- Grasim Industreis Ltd - India
- Bulk Trading Sa - Switzerland
- Leighton Contractors Pty Ltd - Australia
- Jaiprakash Power Ventures ltd
- Anglo American - United Kingdom
- San Jose City I Power Corp, Philippines
- Chettinad Cement Corporation Ltd - India
- Bharathi Cement Corporation - India
- Gujarat Mineral Development Corp Ltd - India
- Central Java Power - Indonesia
- Kobexindo Tractors - Indoneisa
- Iligan Light & Power Inc, Philippines
- Cigading International Bulk Terminal - Indonesia
- Riau Bara Harum - Indonesia
- Goldman Sachs - Singapore
- Global Coal Blending Company Limited - Australia
- Port Waratah Coal Services - Australia
- Neyveli Lignite Corporation Ltd, - India
- European Bulk Services B.V. - Netherlands
- AsiaOL BioFuels Corp., Philippines
- Indo Tambangraya Megah - Indonesia
- Economic Council, Georgia
- The University of Queensland
- Georgia Ports Authority, United States
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- PTC India Limited - India
- Kalimantan Lumbung Energi - Indonesia
- Orica Australia Pty. Ltd.
- Posco Energy - South Korea
- Uttam Galva Steels Limited - India
- Bayan Resources Tbk. - Indonesia
- Indonesian Coal Mining Association
- Bukit Asam (Persero) Tbk - Indonesia
- Parliament of New Zealand
- Samtan Co., Ltd - South Korea
- Bukit Makmur.PT - Indonesia
- Alfred C Toepfer International GmbH - Germany
- Central Electricity Authority - India
- Bank of Tokyo Mitsubishi UFJ Ltd
- McConnell Dowell - Australia
- Pipit Mutiara Jaya. PT, Indonesia
- Cement Manufacturers Association - India
- Madhucon Powers Ltd - India
- Krishnapatnam Port Company Ltd. - India
- Manunggal Multi Energi - Indonesia
- Metalloyd Limited - United Kingdom
- Jorong Barutama Greston.PT - Indonesia
- Kepco SPC Power Corporation, Philippines
- PowerSource Philippines DevCo
- TeaM Sual Corporation - Philippines
- Petron Corporation, Philippines
- Singapore Mercantile Exchange
- Independent Power Producers Association of India
- Australian Coal Association
- Toyota Tsusho Corporation, Japan
- Semirara Mining Corp, Philippines
- Asmin Koalindo Tuhup - Indonesia
- Directorate Of Revenue Intelligence - India
- Wilmar Investment Holdings
- Simpson Spence & Young - Indonesia
- Gujarat Sidhee Cement - India
- Heidelberg Cement - Germany
- GVK Power & Infra Limited - India
- Thiess Contractors Indonesia
- Global Business Power Corporation, Philippines
- Ministry of Transport, Egypt
- Planning Commission, India
- Makarim & Taira - Indonesia
- CIMB Investment Bank - Malaysia
- Essar Steel Hazira Ltd - India
- Electricity Authority, New Zealand
- Jindal Steel & Power Ltd - India
- Rio Tinto Coal - Australia
- Sindya Power Generating Company Private Ltd
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- ICICI Bank Limited - India
- Meralco Power Generation, Philippines
- Holcim Trading Pte Ltd - Singapore
- India Bulls Power Limited - India
- ASAPP Information Group - India
- Sarangani Energy Corporation, Philippines
- Indian Oil Corporation Limited
- The State Trading Corporation of India Ltd
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Interocean Group of Companies - India
- GN Power Mariveles Coal Plant, Philippines
- Binh Thuan Hamico - Vietnam
- Standard Chartered Bank - UAE
- Agrawal Coal Company - India
- Malabar Cements Ltd - India
- Miang Besar Coal Terminal - Indonesia
- Deloitte Consulting - India
- Borneo Indobara - Indonesia
- Offshore Bulk Terminal Pte Ltd, Singapore
- Karaikal Port Pvt Ltd - India
- Vedanta Resources Plc - India
- Bhushan Steel Limited - India
- Ministry of Mines - Canada
- Meenaskhi Energy Private Limited - India
- Mjunction Services Limited - India
- GMR Energy Limited - India
- Billiton Holdings Pty Ltd - Australia
- Coalindo Energy - Indonesia
- Coal and Oil Company - UAE
- Timah Investasi Mineral - Indoneisa
- Baramulti Group, Indonesia
- Intertek Mineral Services - Indonesia
- SMG Consultants - Indonesia
- Lanco Infratech Ltd - India
- Thai Mozambique Logistica
- Straits Asia Resources Limited - Singapore
- Kapuas Tunggal Persada - Indonesia
- White Energy Company Limited
- Tata Chemicals Ltd - India
- PNOC Exploration Corporation - Philippines
- Salva Resources Pvt Ltd - India
- Eastern Energy - Thailand
- Rashtriya Ispat Nigam Limited - India
- Indogreen Group - Indonesia
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- London Commodity Brokers - England
- Dalmia Cement Bharat India
- Indian Energy Exchange, India
- Orica Mining Services - Indonesia
- Vizag Seaport Private Limited - India
- Energy Link Ltd, New Zealand
- Sree Jayajothi Cements Limited - India
- Bhoruka Overseas - Indonesia
- Therma Luzon, Inc, Philippines
- MS Steel International - UAE
- Ambuja Cements Ltd - India
- Kideco Jaya Agung - Indonesia
- Carbofer General Trading SA - India
- Banpu Public Company Limited - Thailand
- TNB Fuel Sdn Bhd - Malaysia
- SN Aboitiz Power Inc, Philippines
- Electricity Generating Authority of Thailand
- International Coal Ventures Pvt Ltd - India
- PetroVietnam Power Coal Import and Supply Company
- Vijayanagar Sugar Pvt Ltd - India
- Aditya Birla Group - India
- SMC Global Power, Philippines
- Antam Resourcindo - Indonesia
- Sical Logistics Limited - India
- OPG Power Generation Pvt Ltd - India
- VISA Power Limited - India
- Tamil Nadu electricity Board
- The Treasury - Australian Government
- Renaissance Capital - South Africa
- Xindia Steels Limited - India
- GAC Shipping (India) Pvt Ltd
- Formosa Plastics Group - Taiwan
- Sakthi Sugars Limited - India
- Latin American Coal - Colombia
- Global Green Power PLC Corporation, Philippines
- Energy Development Corp, Philippines
- Merrill Lynch Commodities Europe
- Siam City Cement - Thailand
- Kohat Cement Company Ltd. - Pakistan
- Petrochimia International Co. Ltd.- Taiwan
- IHS Mccloskey Coal Group - USA
- Kaltim Prima Coal - Indonesia
- Medco Energi Mining Internasional
- Sojitz Corporation - Japan
- Maheswari Brothers Coal Limited - India
- Marubeni Corporation - India
- Bangladesh Power Developement Board
- CNBM International Corporation - China
- Barasentosa Lestari - Indonesia
- Mercator Lines Limited - India
- Aboitiz Power Corporation - Philippines
- Mercuria Energy - Indonesia
- Oldendorff Carriers - Singapore
- Ministry of Finance - Indonesia
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Karbindo Abesyapradhi - Indoneisa
- Maharashtra Electricity Regulatory Commission - India
- Price Waterhouse Coopers - Russia
- New Zealand Coal & Carbon
- Bahari Cakrawala Sebuku - Indonesia
- Indika Energy - Indonesia
- Chamber of Mines of South Africa
- Coastal Gujarat Power Limited - India
- Larsen & Toubro Limited - India
- Africa Commodities Group - South Africa
- Bukit Baiduri Energy - Indonesia
- Wood Mackenzie - Singapore
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