Demand for Efficiency Tech Not Dampened by Cheap Bunkers

MAN Diesel & Turbo said that demand for its Kappel propeller has been steady and growing.

Despite crude oil's dropping below $50 per barrel and, according to Ship & Bunker data, average bunker prices in some of the primary ports dropping under $260 per metric tonne, demand for certain energy efficiency investments and retrofits has been unaffected, ShippingWatch reports. 

MAN Diesel & Turbo reportedly said that it has not seen demand decrease for one of its key products, the Kappel propeller, and hasn't heard of companies cancelling orders despite the longer return on investment period as a result of the lower bunker prices.

"In most cases, the repayment period is about two years even with the current oil price, and this is still very attractive for the carriers," said Thomas Leander, Head of Propulsion at MAN Diesel & Turbo.

He added that demand for propeller retrofits has doubled over the past few years, with the company in fact seeing a growing orderbook. 

"Besides the savings for the one ship... the German banks put pressure on the shipowners to have their fleets retrofitted," Leander said. 

"The banks want to secure their assets this way."

It was suggested that a positive turn for retrofits may be welcome news at this time, especially as some types of vessels, such as dry bulkers, have seen newbuild orders halt because of bottoming rates. 

"There are more newbuildings on their way into the tanker segment in addition to container, but on the bulk market the newbuilding market has completely stopped and this means that we are experiencing an equalization between the segments, so we still have to fight to land orders," said CEO Thomas S. Knudsen.

"There are no signs right now that the market will generate more orders at this point in time." 

Last month, the company announced that it would be cooperating with Wärtsilä Corporation and Winterthur Gas & Diesel Ltd on a project to develop ship engine efficiency technology.