Paul Millar, Group Credit Manager, Bomin. Image Credit: Bomin
The latter half of 2018 saw considerable debate over what the "best" way to comply with IMO 2020 will be.
Some advocate fitting scrubbers and continuing to use HSFO - believing that the technology will provide them with "super profits" as those burning compliant fuel will be left to absorb premiums of $200, $300, even $400/mt.
The counter argument is those 0.50%S premiums will be far less than some project, HSFO supply will be severely limited outside the major ports, and the technology will eventually be banned anyway, turning the perceived scrubber advantage into nothing more than additional debt for those opting to use it.
Paul Millar, Group Credit Manager, Bomin
If they're good they get a credit line regardless of strategy, the specifics are irrelevant
While that debate will undoubtedly continue well into 2019, owners can at least take heart in knowing that their choice of compliance is unlikely to impact their credit lines.
"How much are decisions about compliance strategy playing into credit risk? Not a lot, and no compliance strategy is higher risk than another," Paul Millar, Group Credit Manager at Bomin, told Ship & Bunker.
"If they're good they get a credit line regardless of strategy, the specifics are irrelevant."
With the vast majority of owners set to burn more expensive compliant fuel when the new global 0.50% sulfur cap comes into force from January 1, 2020, Millar is also relatively unconcerned about the potential for buyers to be suddenly saddled with a huge hike in bunker prices.
"My view is that if we have customers who are fundamentally sound, if we assume their costs are going up let's say 50%, that shouldn't worry us," he says.