International dry bulk shipping company Golden Ocean Friday says it is making several arrangements to get ready for IMO2020, when the global 0.5% sulphur cap for marine fuel kicks in.
The company has entered into an agreement to purchase 16 exhaust gas scrubbers with an option to purchase nine additional scrubbers to be installed on certain of its Capesize vessels, it notes in the financial report for the three months ended June 30 (Q2) of 2018.
The initial 16 scrubbers will be installed during routine dry docking schedules, with the majority of installations to be completed in 2019 or early 2020.
It is further planning to remove older vessels from its fleet ahead of the introduction of the ballast water treatment system (BWTS).
“With the upcoming regulatory changes related to sulphur emissions that come into effect in 2020, much of the focus in the sales and purchase market has been on modern tonnage,” it explains.
“Newbuilding prices have also continued to trend upwards, and newbuilding orders have slowed, which is a positive for the longer-term fundamentals of the market.”
The company believes the impact of new regulations to reduce sulphur emissions starting in 2020 will be felt across the whole shipping industry.
It forecasts the cost of fuel is expected to rise, with the differential between high sulphur fuel and low sulphur compliant fuel is expected to stay wide; which will significantly increase the competitive advantage of fuel efficient vessels.
“The company is well-positioned ahead of the implementation of these regulations with a modern, fuel efficient fleet with an average age of five years,” it notes.
“The average age of the company’s Capesize vessels is slightly above four years.
“The company’s decision to install scrubbers on certain of its vessels coincident with dry dockings in 2019 and early 2020 is expected to further increase the company’s competitive position.
“The company will continue to evaluate its options for further scrubber installations, and if it decides to install scrubbers on additional vessels installations will most likely be timed with future scheduled vessel dry-dockings.”
Golden Ocean posted net profit of USD $8.98 million in Q2 2018, from net loss of USD $11.96 million in Q2 2017; revenue was USD $140.89 million against USD $290.83 million during the comparative period.
“Golden Ocean generated positive results once again in the second quarter. The market continues to strengthen over the summer, in particular for Capesize vessels,” said Birgitte Ringstad Vartdal, CEO of Golden Ocean Management AS.
“The company is currently benefiting from the strategic decision to focus our fleet on larger vessel classes as this maximizes the company’s leverage to improving markets.
“We have a fleet of modern, fuel efficient vessels, and the steps we are taking to optimise the fleet by installing scrubbers will further position the company ahead of the implementation of new caps on sulphur emissions.”
Published: 20 August, 2018
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