Eagle Bulk Bearish on Scrubber Retrofits

by Ship & Bunker News Team
Monday August 8, 2022

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.