Extra wording is to be added to the Baltic Exchange's index descriptions to clarify that benchmark bulkers are not fitted with scrubbers, after hotly debated consultation process.
The words “non-scrubber fitted vessel” will be added to the Baltic’s descriptions for capesize, panamax, supramax and handysize vessels, effective from 1 April.
No changes were deemed necessary for the existing fuel reference in the Baltic’s timecharter indices, which represents the physical fuels a vessel is required to burn up to a limit of 380cst.
Fears had previously circulated that the upcoming IMO 2020 regulation would cause these fuel references to be changed, possibly leading to parallel indices for scrubber-fitted and scrubberless vessels.
Neither did the Baltic Index Council deem any changes necessary to voyage route descriptions for tankers or bulkers.
During the consultation process, many Baltic panellists — the majority being for capesizes — told the Baltic Index Council they would be unable to reliably provide prices for a scrubber-fitted vessel based on current penetration within the market, a Baltic circular to members said on Wednesday.
“Confirming that the index vessel remains a non-scrubber fitted vessel after 1 January 2020 provides clarity to the market and any impact on levels reported by panellists is expected to be minor but is not certain,” the Baltic stated in its circular.
“The Baltic Index Council does not consider that material market disruption to open interest would result from this clarification.”
The news follows a long consultation process that saw the Baltic hold five open forum events at maritime hubs around the world, plus members' working group sessions and meetings with the Baltic Advisory Councils and panellists.
“Our unanimous decision to clarify the vessel descriptions as a response to the IMO 2020 change in sulphur limits, involved careful examination of all the data and feedback received from the consultation process,” Stefan Albertijn, chairman of the Baltic Index Council, said in a release on Wednesday.
“We are confident that it is the right decision and one which best meets the needs of the shipping markets we serve.”
