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– With the current freight market, which is barely sustainable, older vessels without washers will become almost superfluous from next year – as bunkering prices rise as expected. Therefore, we can also consider our investment as a way to reduce risk when the new rules come into effect, says Herman Billung, head of Star Bulk Norway, at E24.
Bulk carrier Star Bulk spent $ 200 million, or $ 1.7 billion, installing scrubbers on all of its vessels. Thus, they are ready for the transition as of 1 January 2020 (see box).
Billung thinks that this investment will be worth the gold if the dismal market of dry freight persists, which he obviously does not wish.
IMO 2020
The International Maritime Transport Organization (IMO) has decided to reduce the maximum level of sulfur in the fuel used for shipping from 3.5% to 0.5%.
Global shipping companies must then choose between two options:
Convert yourself to a new type of diesel fuel that costs more than today or install expensive cleaning systems on ships. These "scrubbers" allow to continue to use the current sulfur rich bunker oil.
Star Bulk opted for this last investment. It cost them about $ 2 million per ship.
– We think this gives us an advantage over un-washed ships, but that naturally depends on the performance of our bet. It will be very exciting to see the cost of fuel approved, he says.
Bet on the price difference
The Billung bet refers to the fact that the price difference between the current bunker oil and the OMI 2020 approved fuel will be applied.
Until now, you know little about it.
– Most people think that it will be about 10-15% cheaper than diesel, but considerably more expensive than the price of the current bunker, says Billung.
The bigger the difference, the faster you can call the washers for a good investment.
It will go particularly fast in a poor market, says the boss of Star Bulk Norway.
"The freight market we had recently on capesize is not sustainable, but with a ship equipped with scrubbers, it will behave much better," he said.
Billung thinks that the investment in the dust collector also looks good on a cheaper market and has estimated a repayment period of six months to two years, depending on the type of ship and the price difference between bunker oil and the fuel approved by the IMO 2020.
– The washers will secure us
CHIEF OF REDERBirgitte Ringstad Vartdal is the CEO of one of the largest dry goods companies in the world.
"style =" width: 100%; "aria-decriteby =" figcaption # 24582329 "/> CHIEF OF REDERBirgitte Ringstad Vartdal is the CEO of one of the largest publicly traded dry goods companies in the world.
The Golden Ocean shipping company, dominated by John Fredriksen and with a fleet of 77 ships, also opted for purifiers, but not to the same extent. They have installed such wastewater treatment plants on 20 capesize-type vessels, with options for another five stations.
The director of shipowners, Birgitte Ringstad Vardal, supports Billung in that it is more important to have invested in dust collectors in a poorer market.
– It'll secure a little. Vessels equipped with washers will have the best income because their fuel costs are the lowest. And the customer only cares about getting the cheapest possible shipment. In a bad market, it will be easier to bid on the job market for someone who earns $ 12,000 on freight than a market that earns only $ 4,000, she says.
Takes the pulse of the global economy
The Baltic Dry index, which measures the cost of transporting materials such as coal and cereals, has fallen more than 60% from the peak reached last July.
POWERFUL CASE: Until 2019 has not been a good year for the solid bulk market.
"style =" width: 100%; "aria-decriteby =" figcaption # 24582324 "/> POWERFUL CASE: Until 2019 has not been a good year for the solid bulk market.
Several analysts have considered that it was a sign of economic drag, especially in countries with heavy traffic.
– Dry bulk takes the pulse of the global economy, Billung says.
Important index of shipping has halved since the New Year: – It's a very big fall
In addition, the accident in Brazil is important. The Vale mining company, for natural reasons, produces much less now after the destruction of a dam and the death of several hundred workers.
However, the boss of Star Bulk Norway believes that it seems that you put the worst behind.
– I think it should turn during the year. In any case, the situation is not worse than today, he says.
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