A quarter of the tanker fleet is fitted with scrubbers and the price spread between very low sulphur fuel and high sulphur fuel since the introduction of IMO 2020 is tilting toward scrubbers, reports BIMCO’s chief shipping analyst Peter Sand.
With nearly 15 months passed since the introduction of IMO 2020 on 1 January 2020, the number of scrubbers installed on the world fleet has nearly doubled. From 2,011 ships on 1 January 2020 to 3,935 ships by 1 March 2021, reported BIMCO.
In the crude oil tanker sector, the proportion of vessels fitted with scrubbers is now 24.5% by number and 29.9% by dwt.
In the product tanker sector, the take up has been smaller, 4.2% of the fleet and 13.4% by dwt.
BIMCO’s chief shipping analyst Peter Sand said, “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.”
The decision to install scrubbers on newbuildings or to undertake a retrofit installation centred on the question: what will be the price spread between high sulphur fuel and very low sulphur fuel?
Before IMO 2020, there was little data available to observe the price spread and the payback time for the scrubber was largely guesswork.
According to data collated by BIMCO and Marine Bunker Exchange (MABUX), there is now a significant price spread between high sulphur fuel and very low sulphur in most of the large bunker ports (price spread is the right hand side axis of the image).
“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 is the price spread you will find in Singapore,” said Mr Sand.
He added, “As the bunker price spread now seems to have found a steady level slightly above US$100 per MT, ship owners and investors are increasingly likely to order new ships with a scrubber pre-installed today, when compared to the sub-US$100 spread of last year.”