BIMCO, the largest international shipping association, controlling around 65% of the world’s tonnage, said 15 months since the IMO 2020 global sulphur cap came into force, the number of scrubbers installed on the world fleet has nearly doubled.

Peter Sand, BIMCO’s chief shipping analyst, said from 2,011 ships on 1 January 2020 there's now 3,935 scrubbers as of 1 March 2021.

Among the main shipping sectors, 15.9% of all containerships (28.7% in TEU), 11.4% of all dry bulkers (22.7% in DWT), 24.5% of all crude oil tankers (29.9% in DWT) and 4.2% of all oil product tankers (13.4% in DWT) are now fitted with a scrubber to remove the sulphureous oxides from the exhaust gasses.

“There is a clear tendency that it is the large ships that burn most bunkers which have been preferred for scrubber installations. But it goes for all: as voyage costs are lowered, earnings are higher,” Sand said in the release.

Scrubber-fitted ships nearly double

BIMCO noted that as the lion’s share of the world fleet replaced high-sulphur fuel oil (HSFO) with low-sulphur fuel oil (LFSO) as a mean of propulsion to be compliant with the IMO 2020 global sulphur cap — overall bunker sales rose in Singapore, the world’s by far largest bunkering hub.

Total bunker sale volumes grew by 5% in 2020 and have continued to climb in the first two months of 2021 (+2.7% year-on-year), which it said was an “indication of the shipping industry’s ability to deliver all the way through the pandemic.”

One-quarter of total bunker sales in February 2021 was HSFO, a share that has only risen since January 2020, when no more than 17% of sales were fuel oil for ships with a scrubber installed, BIMCO added.

The USD 118 per MT difference

“From the get-go, the debate was all about the bunker price spread and therefore the choice between HSFO and investing in a scrubber or using LSFO to comply with the new sulphur regulation. As 2021 arrived and the crazy 2020 was nearing an end, the next normal seemed to be in the making,” Sand said.

He added that the lowest price spread can be found on the US west coast while the largest spread can be found in the Middle East.

“In between, you have US$118 per MT as the most common spread. That’s the price spread you will find in Singapore,” Sand added.

Prior to the implementation of the sulphur regulation, BIMCO’s chief shipping analyst, said the then-watched MGO-HSFO spread hovered around US$200 per MT, “but it was clear that a new and lower spread would settle one point.”

As the ‘new standard’ LSFO is now established, the pricing of the product also seems to have arrived at the next normal.

“As the bunker price spread now seems to have found a steady level slightly above USD 100 per MT, ship owners and investors are increasingly likely to order new ships with a scrubber preinstalled today, when compared to the sub-100 dollar spread of last year,” the BIMCO chief shipping analyst noted.