Hu Qing, Lead Analyst, at independent research consultancy Drewry Maritime Research on Tuesday (22 January) published an article detailing the uptake of scrubber-equipped and LNG-powered chemical tankers in the market leading to IMO 2020:
The impending IMO fuel deadline is creating a dilemma for chemical tanker owners?should they install scrubbers or replace high sulphur fuel (HSFO) by burning cleaner fuels, such as low sulphur fuel oil (LSFO), LPG or LNG?
Space is often limited on a small chemical tanker, so fitting a scrubber is not always an option. And even where space is available, the high capex of $1.5-2.0 million per ship for retrofitting is proving to be a further obstacle.
Current statistics reveal that only 21 chemical tankers in the current fleet have scrubbers installed, while an additional 76 vessels are pending installation as of 1 January 2019. In effect, at the start of 2019, almost 98% of the existing chemical fleet is facing the prospect of having to use high-cost cleaner fuels when the regulation comes into force in 2020.
Table 1: Segment-wise status of scrubber retrofits in chemical tanker fleet
|Existing fleet (in number of vessels)||Vessels with scrubbers installed||Vessels pending scrubber installation||Vessels with no scrubbers|
|< 10,000 stainless||3||0||508|
|< 10,000 coated||1||0||889|
Source: Drewry Maritime Research
Some 18 coated chemical tankers have been converted to use LNG on a dual-fuel basis and there are eight methanol-fuelled vessels (along with four on order) trading chemicals. However, for a large part of the remaining chemical fleet, it looks like more expensive fuel will be the order of the day.
Table 2: Segment-wise breakup of chemical tankers converted to LNG dual-fuel engines
|Existing fleet (in number of vessels)||Vessels with LNG dual-fuel engines||Vessels without LNG dual-fuel engines|
|< 10,000 stainless||0||511|
|< 10,000 coated||0||890|
Source: Drewry Maritime Research
There is no doubt that between now and the deadline, some further retrofitting of scrubbers will take place. Yet, at best, it can only be small scale, and we think most chemical tankers will be forced to burn cleaner, but higher cost fuels when the IMO regulation comes into force in 2020. This raises the question of whether owners will be able to pass on higher costs to charterers. Given the current dynamics of the sector as a whole, this must be in doubt, and we think profitability in chemical shipping will continue to be squeezed in 2020.
Source: Drewry Shipping Consultants
Published: 24 January, 2019
Universal Alliance, BMS United, Digiland International, Goodwood Associates, Southernpec (Singapore), and Taigu Energy were involved in alleged circular fictitious trades of fuel oil during July 2015.
Bunker orders of ISO 8217:2010 spec LS 380 cSt 0.5% for Nord Gemini, Nord Titan, Ocean Rosemary, and Luzern were placed through global commodities trading and logistics house Trafigura Pte Ltd.
While Covid-19 concerns are important, Captain Rahul Choudhuri was quick to note this does not mean bunker fuel related issues have indeed disappeared from the shipping sector.
‘Therefore, representing the players of the Malaysian bunker industry, we sincerely hope that this matter can be refined and reconsidered immediately so that all parties benefit together,’ says communication.
Maureen Poh, a Director of Helmsman LLC, offers plain practical tips on the differences between US and EU Sanctions and shares some thoughts on what companies could do if they are potentially exposed to sanctioned entities.
‘We [Consort Bunkers] have the opinion that the bunker business in Singapore is not related to the widely reported earlier cargo commodity trading mishaps,’ company source tells Manifold Times.