Charterers Paying Premium for Scrubber Equipped Tonnage

Monday July 9, 2018

Recent bullish comments on the commercial advantages of scrubber-equipped vessels seem to be holding true, with Gibson reporting that charterers are paying a premium for scrubber equipped tonnage.

"Recently, there have been several T/C deals with all oil majors, where a notable premium has
been paid for tonnage fitted with scrubbers compared to tankers without the technology on board," the shipbroker said is its latest Weekly Tanker Market Report.

"Not only charterers are willing to pay a significant premium over prevailing market rates to secure tonnage ready for 2020 but also the cost of a scrubber retrofit could be repaid in under 18 months on a VLCC if the spread between high sulphur fuel oil and compliant 0.5% sulphur bunker fuel is at $200/tonne. The repayment period will be even shorter if the price differential between 3.5% and 0.5% sulphur bunker fuel is over $200/tonne."

Once paid off, the vessel owner could the enjoy "a strong competitive advantage compared to tonnage without scrubbers."

Gibson also echoed recent reports indicating a significant uptick in orders for the technology.

"A new trend is starting to emerge where newbuild tankers are being ordered fitted with scrubbers or being 'scrubber ready', in other words the equipment could be installed at the later stage," it said.

Conservative estimates put some 30% of the current VLCC orderbook including scrubbers, while another 9% is scrubber ready.

While there is still plenty of capacity for new orders, scrubber manufacturers recently told Ship & Bunker that the market has now changed from one where shipowners are telling manufacturers when they want deliveries, to accepting when they can get deliveries and plan dry-dockings accordingly.