Scrubbers investment expected to have 18-month payback for megas
SOME 2,753 vessels, totalling 328
19 February 2020 - 19:00
China Cosco Shipping has emerged as the biggest backer of scrubber technology, with 113 vessels totalling 17.9 million dwt fitted, according to data compiled by London's Lloyd's List Intelligence.
Along with China's financial leasing banks, the world's largest shipowner leads investment in the sulphur abatement technology, followed closely by container line Mediterranean Shipping, the Angelicoussis Group and George Economou.
Lloyd's List Intelligence shows that a further 580 newbuildings that are on order or under construction will have scrubbers fitted.
In the container sector - where some 12.7 per cent of the fleet by deadweight tonne have scrubbers fitted - Mediterranean Shipping Co has the largest volumes of scrubber-fitted tonnage.
Seventy-one vessels that it beneficially owns, including 13 passenger ships, have scrubbers fitted. Total deadweight is 8.2 million. This figure excludes other box ships that it operates under leaseback deals with Chinese banks. A further nine are with the Bank of Communications Financial Leasing and 10 with China Merchant Bank.
Taiwan's Evergreen has 70 containerships of five million dwt, while AP Moller-Maersk Group, the beneficial owner for the world's largest container line, Maersk Group, has largely avoided the technology. Only 16 vessels of the 861-vessel fleet have the sulphur abatement technology. Thirteen are containerships, two crude tankers and the last a product tanker.
Chinese financial leasing houses are leading investment in scrubbers. China Merchant Bank is the beneficial owner of 103 ships, totalling 21.4 million deadweight tonnage. The Industrial and Commercial Bank also has 32 scrubber-fitted vessels on its books, for clients including Scorpio Tankers and BP Shipping.
Bank of Communications Financial Leasing has 68 vessels of 7.3 million dwt, including 22 that are operated by oil trader Trafigura, which recently sold off these leasing obligations to Frontline and Scorpio Tankers, which has 78 product tankers at five million dwt.
Greek shipowners strongly opposed the introduction of the sulphur cap on marine fuels. Yet, Star Bulk Carriers, started by Prokopios Tsirigaki and owned by Oaktree Capital, has 78 bulk carriers of 9.2 million dwt fitted with scrubbers.
Penetration by sector is 16.4 for crude tankers, 7.5 per cent for product tankers and 12.2 per cent for bulk carriers, measured by deadweight tonnage, Lloyd's List data shows.
From where marine fuel prices currently stand, those companies that have invested in the $2.5 million - $3 million cost of scrubbers are profiting from their decision, as higher fuel costs eat into earnings for those operating compliant, 0.5 per cent low sulphur fuel. At the world's biggest bunkering port of Singapore, very low sulphur fuel oil is trading at $518 per tonne, compared with $320 per tonne.
The spread, or difference in price, between 0.5 per cent and 3.5 per cent fuel oil is currently enough to return the scrubber investment for a very large crude carrier in 18 months, analysis shows.
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