New York-based Genco Shipping & Trading has decided to install scrubbers on the capesize bulkers in its fleet, market sources have told TradeWinds.
Genco will join the growing list of New York-listed companies that have chosen to fit scrubbers on at least some vessels to comply with the IMO's stricter sulphur-emissions standards by the 1 January 2020 deadline.
60% of capacity
The 17 capesizes represent a little more than a quarter of the 64 bulkers in Genco’s fleet, yet nearly 60% of its capacity in dwt.
The balance of the fleet, made up of smaller vessels, is likely to use IMO-compliant 0.5% low-sulphur fuel oil (LSFO) — hedging the bet on fuel spreads and reflecting the differing economics of the vessel classes.
Genco management has not commented on the plans but has previously indicated that the capesizes were the focus of its extensive study on the scrubber option.
"We will look at it [using scrubbers] with respect to capesize ships because they are a long-haul trade,” said Genco chief executive John Wobensmith in an earlier public comment on the issue.
Capesizes are not only doing long-haul cargoes but are the largest vessels in the Genco fleet.
Recouping costs
The decision to convert them would take into account that the scrubber-retrofit cost could be recouped much more quickly on larger vessels than on smaller ones, market sources said.
Another New York owner, albeit on the tanker side, recently took a similar decision.
New York-listed International Seaways decided to put scrubbers on its VLCCs, while leaving its smaller vessels to burn LSFO.
“The VLCCs were the most clear financially beneficial class of ship to put the scrubbers on — they burn the most fuel, they spend the most time at sea, they offer the biggest benefit,” International Seaways chief commercial officer Derek Solon said at last week’s Association of Ship Brokers & Agents cargo conference in Miami Beach.
Capesizes are essentially the VLCCs of dry bulk and subject to similar economics, the market sources said, so understandable that Genco would make them its focus.
