Eagle Bulk CEO Gary Vogel does not expect rapid growth in scrubber retrofits this year. Image Credit: Eagle Bulk
Dry bulk shipping firm Eagle Bulk is expecting scrubber retrofits to remain limited in quantity despite the current high fuel cost savings from the emissions-cleaning systems.
In an earnings release last week the company noted its scrubber-equipped vessels were delivering 'outsized returns'. But in a call with analysts CEO Gary Vogel expressed a bearish view on seeing more scrubber retrofits because of the need to take vessels out of the current strong freight market to install the systems.
"We have three non-scrubber-fitted Supramaxes, sister ships to other vessels that are all scrubber-fitted," Vogel said on the call last week.
"We've looked at it and decided at this point we're not doing it.
"The lead time, the off-hire time, of course, off-hire today is significantly more expensive than it was when we retrofitted our fleet in 2019.
"So I think you'll see some uptick, but I think it will be focused on the larger sizes from the economic aspect of it.
"But I don't think it will be meaningful. I think that the midsize segment will continue, as far as I can see, to be significantly a VLSFO-burning fleet for the future."
The global average VLSFO-HSFO price spread stood at $251/mt on Friday, according to Ship & Bunker's G20 Index of prices at 20 leading bunkering ports, up from $105.50/mt a year earlier.
Eagle Bulk is currently seeing a freight-rate premium for scrubber-equipped midsize bulkers of about $2,600-2,700 per day, Vogel said.