Updated: Jun 16, 2020
Containership owners are continuing with their scrubber retrofit programs despite a dramatic fall in oil prices. The unprecedented decline has seen crude prices plummet to negative values for the first time in history. West Texas Intermediate crude oil futures for May delivery dropped to a low of -$39 a barrel on 20 April, although they recovered to $1.50 on 21 April.
Along with crudes, bunker prices are also expected to fall in the coming weeks, as reduced demand from containerships will affect the market in May. In that month alone, more than 200 sailings are expected to be cancelled or withdrawn.
IFO380 fuel oil prices have fallen to $190/ton in Singapore and $163/ton in Rotterdam, while VLSFO prices are at $262/ton and $218/ton, respectively.
Despite a reduction in the low sulphur fuel price spread to just $50-70 per ton, containership owners do proceed with their scrubber retrofit programs. So far, at least 20 vessels have entered shipyards for retrofitting in April, joining some 35 units that entered the yards in March.
Although vessel continue to enter shipyards for retrofitting, the total number of containerships undergoing retrofit work has fallen from a peak of 119 units in mid-March to 90 units currently.
Shipyards in China that were affected by the COVID-19 lockdown in February have largely resumed normal operations, allowing a total of 76 containerships to complete their scrubber installation works since March. Retrofits are expected to continue in the coming months, with scrubber fabrication and engineering works already well advanced for units that were ordered several months in advance, before the fuel price dropped to the current lows.