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2020: Jinhui Shipping and Transportation ‘refraining’ from scrubbers

30 Aug 2018

Oslo-listed shipping company Jinhui Shipping and Transportation (JST) says it will avoid the use of scrubbers and choose to consume low sulphur marine fuel in order to meet the upcoming International Maritime Organization (IMO) imposed 0.5% sulphur limit in 2020.

“One of the most widely debated topics in our industry is the installation of scrubbers to meet the 2020 sulphur cap emission regulation,” says its second quarter (Q2) earnings report.

“We are currently refraining from the installation of scrubbers given the long term technical and commercial viability of scrubbers is yet to be proven, not to mention the investment cost of scrubber has been on the decline where we believe benefit is highly likely to arise with further patience.

“From the environmental perspective, we believe the use of low sulphur fuel is the most efficient way to tackle this issue.

“We expect the availability of such product will become abundant at reasonable costs with time, given the likelihood of an increasing demand.”

JST meanwhile recorded a consolidated net profit of USD $2.8 million in Q2 2018 as compared to a consolidated net loss of USD $784,000 for the corresponding quarter in 2017.

Revenue for the second quarter of 2018 increased 16% to USD $22.1 million compared to USD $19.0 million for the corresponding quarter in 2017. 

“The freight market in 2018, especially Supramax has so far been favourable for the Company, with strong support in asset prices underpinned by healthy earnings,” it adds.

“Strong volume of imports by China, overall global recovery in demand for dry commodities and a reduction in newbuilding deliveries all contributed to the continued recovery.

“Supply fundamentals are currently favourable, and at a low point by historical standards, with relatively low incentive to order newbuildings given the uncertainty on how future regulations will evolve and financing costs on the rise.

“Further stability in the operating environment will be reached should a robust demand persist.”

As at 28 August 2018, the JST had 20 owned vessels; the bulk shipping firm is a subsidiary of Jinhui Holdings Company Limited, a company incorporated in Hong Kong and listed on the main board of the Hong Kong Stock Exchange.

Photo credit: EGCSA
Published: 30 August, 2018

 

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