Monaco-based bulker owner Scorpio Bulkers is taking the ‘wait and see’ approach when it comes to preparing for the implementation of the IMO 2020 sulfur cap.
According to Cameron Mackey, Scorpio Bulkers’ Chief Operating Officer (COO), it is a matter of time before the regulators revisit the scrubber solution and realize that a scrubber takes emissions and instead of putting them into air, actually puts them into the sea.
“So, we have a healthy skepticism that regulations, as they are now, will not be changed or modified, and that’s one of the greatest risks that any ship owner has in undertaking an expensive capital project against things: it’s the risk that regulations change, either in implementation or around the technology. And this, by the way, is proven to be true with the recent misadventures in ballast water treatment regulation,” Mackey said in a conference call on Tuesday.
Furthermore, there is skepticism that the available technology is adequately designed and resilient, especially on the back of case studies of those who have installed scrubbers that prove otherwise.
“The final big risk, of course, is relative pricing and availability of the different fuels once you get to 2020,” Mackey added, stressing that these are the key concerns that stand in the way of making any long-term decision on the issue at the moment.
“We are taking our time to make sure that any decisions we might make is thoughtful and takes into consideration these risks and how they might change.”
Scorpio Bulkers made a huge recovery in 2017, axing its loss from USD 124.8 million posted in 2016 to USD 59.7 million.
“The company was brought back from the dead,” Robert Bugbee, the company’s president, said during the call.
Commenting on the situation on the market, Bugbee said the company was “really confident in this market recovery, but we’re not cavalier, ” as the process is in its early stages.
“This quarter is very much a transitional quarter; it’s the worst quarter that we expect in a year (…) Once Chinese New Year finished within two or three weeks, we and the rest of the industry expect things to move upwards.”
At the end of last year, the company acquired ten ships availing of the “stressed opportunities”, which are no longer available on the market, it was stated during the call.
Speaking on the potential future orders, Bugbee said that there is no need for Scorpio Bulkers to go out and take new orders.
“If we could have done that and if we had that intention, we would have done in the third quarter or fourth quarter as opposed to buying assets that were effective in the water or soon to be in the water.”
As explained, the ships need to be ready to reap the fruits from the accelerating demand in the upcoming period and especially moving into 2019 and 2020.
However, it is still too early to sign longer-term charters as rates are expected to pick up further.
“I can’t imagine any owner would want to give their ships away right now,” Bugbee pointed out.
World Maritime News Staff