There’s a growing perception amongst analysts that the scrubbers interest is waning as premiere companies such as Alfa Laval and Wärtsilä issued their Q2 financial reports earlier this month which shows a slowdown in scrubber sales, writes Malcolm Latarche in an article published in Ship Insight.
Overlooking the real reason, are we?
Analysts have taken this to indicate a waning interest in scrubber technology by ship operators although both sets of reports made clear that the real reason was more connected with a lack of newbuilding orders and negative trading conditions for shipping generally.
In its report, Alfa Laval said, “The scrubber market was as expected weaker during the quarter, pending the new sulphur directive that comes into force at year end and uncertainty around its effects on the fuel price. That our current year delivery capacity is sold out since long also contributed to the weak order development. Our perception of the scrubber technology and the market as a whole has, in a longer perspective, not changed”.
Similar sentiments were expressed by Wärtsilä which said of its marine business as a whole “The demand outlook has been downgraded from solid, due to lower vessel contracting volumes and an anticipated decline in the demand for scrubber solutions from last year’s exceptionally high level. Activity in the marine services market is expected to continue”.
Late Stage Slowdown Expected
At this late stage a slowdown in scrubber sales should be expected as for some time now there has been little chance of completing installation before the 1 January 2020 when the new sulphur limits kick in. Despite this several operators have committed to installations after the deadline and scrubbers will be installed when trading conditions and dry-docking schedules allow.
Have New Orders Dried Up?
Most of last year’s surge in scrubber sales was reported, not as a result of announced contracts, but as an element in ship operators own financial reports. As highlighted by the latest order by Scorpio of 23 new systems from Pacific Green Technologies, new orders have not dried up. The growing number of scrubber suppliers must also be having an effect upon individual makers’ market share.
Scrubbers in Excess?
Many reports suggest that scrubber numbers have now reached somewhere between 4,000 and 5,000 which is in excess of the numbers forecast when IMO decided on the 2020 deadline some years ago. The impact of some of the recent scrubber restrictions may be having a small effect on scrubber interest but as has been pointed out by several interested parties, operation in restricted areas makes for a very small part of most voyages and can for most practical reasons be discounted.
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Source: Ship Insight
