Bulker owner Belships has shown its IMO 2020 hand following its takeover by Frode Teigen and the arrival of a new chief executive.
Oslo-listed Belships has inked a deal to hedge the price differential between compliant 0.5% sulphur fuel oil and 3.5% sulphur fuel oil, it told investors today.
Lars Christian Skarsgard, chief executive of Belships, told TradeWinds: “We feel this is a more efficient and cost-effective way, where we will not have to take any ships out of service."
The decision means the supramax company will not be required to invest in much-hyped scrubber technology at a time when it is busy growing its fleet.
Scrubber take-up in the supramax space has been smaller than among the larger bulker markets, with Nasdaq-listed Eagle Bulk one of the outliers in the sector in opting for the technology.
Belships says its initial move has secured exposure for 24,000 tons of bunkers for 2020 at a fixed price differential of $198 per ton.
“The company's trading fleet will be physically ready by January 2020 to comply with the IMO sulphur cap,” Belships said in a statement.
“The bunker price differential hedge reduces downside risks and represents an efficient alternative to costly installations of scrubbers, whilst retaining full utilization of the fleet and the flexibility to adjust the position as the market develops.”
It would cost Belships around $3m to $4m per ship to fit scrubbers on its supramaxes, which would be out of the market for three to four weeks each to have the kit installed.
The company has been a dominant player in the supramax sale and purchase market since the arrival of new chief Skarsgard, and has 18 bulkers in the water and one newbuilding for delivery in 2020.
While Belships was historically known for employing ships on period deals, its charter strategy is more mixed after the combination with Teigen’s spot-focused Lighthouse fleet.
