World News
Scrubber Payback Time to Lengthen Further as HSFO Discount Reaches New Lows
Scrubber economics have come under further pressure this week as the price difference between high sulfur fuel oil (HSFO) and very low sulfur fuel oil (VLSFO) narrows to new lows.
The HSFO-VLSFO spread at Rotterdam narrowed by $37.50/mt to just $62/mt on Monday, according to Ship & Bunker pricing -- a new record low.
The spread reflects the fuel saving a vessel with a scrubber can make before costs by continuing to burn HSFO while its competitors are forced to burn VLSFO.
HSFO prices have been falling more slowly than other products in this month's crude collapse. paring back the advantage felt by shipowners that installed scrubbers ahead of IMO 2020 to allow them to continue burning HSFO.
For a VLCC with a scrubber that cost $2-4 million, consuming about 100 mt/day of bunkers, a spread of $62/mt would indicate it could pay back its capital investment in 323-645 days.
Key Bunker Prices More
| VLSFO | MGO | |||
|---|---|---|---|---|
| $/mt | +/- | $/mt | +/- | |
| Singapore | 571.50 | 0.00 | 665.50 | 1.00 |
| Rotterdam | 512.00 | 3.00 | 663.00 | 0.50 |
| Houston | 545.50 | 3.00 | 666.00 | 9.50 |
| Fujairah | 560.50 | 0.00 | 743.50 | 1.50 |
| Global 20 Ports Average | 584.00 | 1.00 | 751.50 | 2.00 |
| Global 4 Ports Average | 547.50 | 0.00 | 684.50 | 2.50 |
| Global Average Bunker Price | 633.50 | 0.50 | 805.50 | 0.00 |
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