World News
DNV Sees Open-Loop Scrubber Payback Time at Four Years
Narrowing fuel price spreads have seen the length of time taken for open-loop scrubber investments to pay for themselves increase to about four years, according to classification society DNV GL.
The price spread between very low sulfur fuel oil (VLSFO) and high sulfur fuel oil (HSFO), which shows how much shipowners with scrubber-equipped tonnage can save by continuing to burn HSFO, has narrowed to record lows since this year's collapse in crude prices.
That has seen payback times for some scrubbers quadruple in some cases, price reporting agency S&P Global Platts reported Monday, citing an interview with Fabian Kock, DNV's maritime head of section for environmental certification.
"Bearing in mind now the fuel cost difference is only $50/mt, payback times are four years for open looped scrubbers and more than six years for closed-loop scrubbers [whereas] at the beginning of the year, payback times were one year," Platts cited Kock as saying.
The VLSFO-HSFO price spread at Rotterdam was at $56.50/mt on Monday and hit a record low of $26.50/mt on April 28, according to Ship & Bunker pricing, down from $298/mt at the end of 2019.
A price spread of $200/mt would give a 'reasonable' scrubber payback time, according to Kock.
"From this, our estimations say it'll take between one and two years to pay back."
Key Bunker Prices More
| VLSFO | MGO | |||
|---|---|---|---|---|
| $/mt | +/- | $/mt | +/- | |
| Singapore | 556.50 | 9.00 | 685.00 | 6.50 |
| Rotterdam | 506.00 | 6.00 | 665.00 | 11.00 |
| Houston | 552.50 | 0.50 | 682.00 | 4.00 |
| Fujairah | 548.00 | 7.50 | 750.00 | 3.00 |
| Global 20 Ports Average | 583.50 | 4.00 | 762.50 | 2.50 |
| Global 4 Ports Average | 546.50 | 4.50 | 697.50 | 2.50 |
| Global Average Bunker Price | 632.50 | 2.00 | 811.00 | 1.50 |
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