Mega ships burn high sulphur fuel in newbuilds with scrubbers
TWENTY-FIVE per cent of bunker sales in February were of high sulphur fuel oil (HSFO), a share that has only risen since January 2020, when no more than 17 per cent of sales of that could be supplied to ships with scrubbers installed, according to Baltic and International Maritime Council (BIMCO)
22 March 2021 - 19:00
Total bunker sale volumes grew by five per cent in 2020 and have continued to climb in the first two months of 2021, up 2.7 per cent year on year, which indicates the shipping industry's ability to deliver all the way through the Covid crisis, reports New York's Marine Link.
From the start, the debate was all about the bunker price spread and therefore the choice between HSFO and investing in a scrubber or using LSFO to comply with the new sulphur regulation.
'The lowest price spread can be found on the US west coast while the largest spread can be found in the Middle East. In between, you have US$118 per tonne as the most common spread. That's the price spread you will find in Singapore,' said BIMCO analyst Peter Sand.
Before the sulphur regulation came into force, the much-watched MGO (marine gasoil)-HSFO spread hovered around $200 per tonne, but it was clear that a new and lower spread would settle one point. As the 'new standard' LSFO (low sulphur fuel oil) now established, the pricing of the product also seems to have arrived at the next level.
Fifteen months have passed since the implementation date for the IMO global sulphur cap. During that time, the number of scrubbers installed on the world fleet has nearly doubled: From 2,011 ships on January 1, 2020 to 3,935 by March 1, 2021.
Today, 15.9 per cent of all containerships (28.7 per cent in TEU), 11.4 per cent of all dry bulkers (22.7 per cent in dwt), 24.5 per cent of all crude oil tankers (29.9 per cent in dwt) and 4.2 per cent of all oil product tankers (13.4 per cent in dwt) are now fitted with a scrubber to remove the sulphur oxides from the exhaust gasses.
'There is a clear tendency that it is the large ships that burn most bunkers which have been preferred for scrubber installations. But it goes for all: as voyage costs are lowered, earnings are higher,' Mr Sand said.
'As the bunker price spread now seems to have found a steady level slightly above $100 per tonne, shipowners and investors are increasingly likely to order new ships with a scrubber preinstalled when compared to the sub-$100 spread of last year.'
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