Scrubber retrofitting could be about to provide an unexpected boost to the boxship supply-demand balance, according to shipping consultancy Drewry.
Alphaliner has identified almost 300 containerships that have been or will be equipped with scrubbers, with the pace of contracting picking up.
Drewry said: "If the trend intensifies there could well be some side benefits for ocean carriers by restricting supply during 2019.
"In the big picture, the new regulation is expected to reignite the demolitions market after a down year in 2018 by weeding out more of the older, more heavily polluting ships that will no longer be economic post-2020.
"But at a more macro-level a number of trades could see deployment numbers temporarily reduced next year as more ships are taken out of service for retrofitting."
Depending on the size and type of ship, an exhaust scrubber retrofit can as long as six weeks, which is a sufficiently long time to impact the slot availability, it added.
"As things stand, the penetration of scrubber-fitted ships is low in the major East-West trades," Drewry said.
Boost depends on lines' management
For example, according to Drewry research just 17% of the ships deployed in the Asia-Mediterranean trade ran with scrubbers as of November.
The ratio was even lower in the Asia-East Coast North America (10%), Asia-WCNA (9%), Transatlantic (6%) and Asia-North Europe (5%) lanes. This gives plenty of scope for those ships to be pulled from active duty next year to get retrofitted, which unless replaced will reduce overall utilisation and aid spot market freight rate inflation, Drewry said.
The company said: "How big a factor this will be will depend on the extent of the retrofit wave, and whether lines manage the process alongside the usual void sailings programme or if it will effectively replace it altogether."
"Scrubber-fitted containerships will be in the minority of the fleet, but as their popularity increases there is likely to be some temporary supply-side disruption that could affect freight rates in 2019."
Drewry said one reason why more owners are considering scrubbers is "perhaps because of warnings that if there are too few clients for HSFO suppliers could charge a premium to keep producing such small quantities."
It said 266 vessels are currently fitted with scrubbers with an aggregate capacity of 2.2m teu.
This is only 5% of the fleet in number, but it accounts for twice that ratio in teu capacity due to the emphasis towards larger ships being retrofitted.
And scrubber penetration is much more significant in the orderbook, which combined with more anticipated retrofits, in time will lift the ratio higher still, it added.
