“For 2020, the dry freight market is expected to be stable with artificial supply tightness owing to scrubber installations as well as robust iron ore trade growth while political risk remains in the coal trading sector,” said Daejin Lee, principal consultant at IHS Markit.
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This high sulphur fuel oil (HSFO) will not be banned outright but allowed if vessels attach at port a cleaning device called a scrubber — something fewer shipowners and brokers did given the highest profits for freight seen in years.
The move to blacklist ships from COSCO on Sept. 24 for allegedly ferrying sanctioned Iranian oil will undercut demand for ships’ traditional means of power because a vessel crunch meant fewer docked and attached kit to filter the dirtier fuels.
Owing to new regulation implemented by the International Maritime Organization (IMO) to curb sulphur emissions, scrubber retrofits and removals of older fleets with a high compliance cost are expected to lead to fleet tightening, which will help increasing freight rates across sectors and ultimately boost orders, said IHS Markit.
Despite a slowing crude oil market share from Organization of the Petroleum Exporting Countries in 2019, tanker demand growth will be driven by increased crude exports from the United States, Brazil, Guyana and Norway, said Fotios Katsoulas, principal analyst at IHS Markit.
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Oct 15 (Reuters) – The U.S. Environmental Protection Agency on Friday said it would investigate the Texas air regulator over allegations of racial bias in rulings involving pollution in Black neighborhoods by a refinery waste recycler.
A Chinese international trade promotion agency said it would offer force majeure certificates to companies struggling to cope with the impact of the new epidemic on their business with overseas partners.
“The postponement of scrubber installations triggered by soaring freight rates in October will only delay the absorption of HSFO volumes next year, exacerbating the decline in HSFO demand especially in H1 2020,” Refinitiv said in a report.
While retrofits were slow last year and delayed by technical difficulties and a lack of key parts, “scrubber adoption is expected to continue and a second wave of installations is expected this year”, said IHS, adding that it expected more than 3,500 units to be equipped with scrubbers by January 2021.