- Wärtsilä, Scrubber orders have been thin on the ground despite a widening discount for HSFO.
- The unit covers the firm’s activities in scrubbers, gas solutions, marine electrical systems and shaft line solutions.
- The average VLSFO-HSFO price spread — a measure of how much ships with scrubbers save on fuel bills — widened by 21.7% to $112/mt last year, according to Ship & Bunker’s G20 Index of prices at 20 leading bunkering hubs.
According to engineering firm Wärtsilä, despite a huge VLSFO-HSFO price spread, scrubber orders are still low since good ship earnings make retrofits less appealing as reported by Ship & Bunker.
Net sales for the company’s Marine Systems unit fell 19% year over year to EUR 654 million ($730 million) last year, according to an annual results statement released on Friday. Scrubbers, gas solutions, maritime electrical systems, and shaft line solutions are all covered by this unit.
The fall was “as a consequence of decreased scrubber volumes and lower newbuild scrubber margins,” the company said in the statement.
“The interest in scrubber installations continues to be mostly driven by newbuilds, with orders recorded for 231 vessels globally in 2021.
“Scrubber retrofitting activity continued to be muted.”
That lethargy in scrubber retrofits can be explained by improved freight markets, the company added.
“High earnings and tonnage demand have led to postponements of activities that require dry-docking, such as scrubber retrofits,” it said.
However, compared to the rest of the worldwide fleet, shipowners who already had scrubbers saw significant cost reductions last year. According to Ship & Bunker’s G20 Index of prices at 20 key bunkering hubs, the average VLSFO-HSFO price spread — a measure of how much ships with scrubbers save on fuel bills — widened by 21.7% to $112/mt last year.
The disparity reached a peak of $153/mt in 2021, after starting the year at $79.50/mt, and it has not decreased appreciably since then. A spread of at least $100/mt is seen as a psychological threshold at which scrubber investments begin to get more attention from the shipping sector.
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Source: Ship & Bunker