Important reading on the economic benefits of marine scrubbers. SpGlobal.com reports that “Only scrubber-fitted VLCCs are earnings positive as bunker prices spike.”
Excerpts:
“Non-scrubber fitted tankers in the red on key routes – Widening HSFO discount to LSFO may revive scrubber market- Rising LSFO prices to push up demand for HSFO.
“Singapore — The rising discounts which high sulfur fuel oil is enjoying over its low sulfur cousin has resulted in a clear two-tier market for VLCCs, where tankers with scrubbers are showing daily earnings, or else running into losses, market participants said Feb. 16.
“Scrubbers are exhaust gas systems, which remove excess sulfur from bunker fuels, and many ships had installed them in the run-up to the implementation of a low sulfur regime for maritime fuels last year. This enabled them to continue using cheaper high sulfur bunkers and not have to make the transition to the expensive LSFO. However, the total number of ships that installed these scrubbers was just around 5% of the global merchant fleet.
“The narrow discount that HSFO enjoyed over LSFO for a part of last year, left many owners with second thoughts of installing scrubbers, while others were concerned they would not be able to recover the installation cost which ran into millions of dollars.
“However, with LSFO prices in Singapore rising above the key psychological mark of $500/mt, this is changing and in many tanker segments, particularly VLCCs, only those with scrubbers installed are making money on key routes.
“Relatively older VLCCs, which are fitted with scrubbers, are likely to earn $10,000/day more than the younger ones without scrubbers on the key Ras Tanura-Ningbo route, a senior shipping executive in Athens told S&P Global Platts.”
