Clarksons Research believes the remaining 700 scheduled scrubber retrofits could be cancelled or postponed.
Stephen Gordon, managing director of the research division of London-listed broker Clarksons, said the orderbook is "vulnerable" following a slowing of installation activity.
This was due first to coronavirus-linked yard disruption in China, which carried out 76% of global retrofits last year, and more recently by the closing of the fuel spread.
Low-sulphur fuel oil is only $60 per tonne more expensive than high sulphur bunkers, down from $300 at the start of the year, Gordon added.
"To date a small number of scrubber cancellations have been confirmed but the current situation appears to be leading to more postponements," he said.
Yard visits dropping
"Although activity has picked up a little recently, only about 150 vessels entered repair yards for scrubber retrofits during April and May, while about 270 ships departed post-retrofit."
As a result, just 0.6% of the fleet in gross tonnage terms, less than 100 vessels, is now undergoing retrofit work.
This is down from 1.8% or more than 300 ships at the start of 2020.
More widely in the shiprepair sector, Clarksons Research found that after a positive 2019, yard closures, logistical difficulties and survey deferrals have all impacted activity levels.
"Despite the immediate challenges, longer term prospects may be more positive," the outfit added.
Last year, business was boosted by scrubber work, ballast system installations, a strong cruiseship refurbishment programme, increasing installation of energy saving technologies (ESTs) and improving levels of offshore-related projects.
But repair activity in 2020 up to the end of May has fallen almost 20% compared to the fourth quarter of 2019.
Ballast work could help yards
As well as yard closures in lockdown, financial pressure has been felt by owners due to "difficult" markets, Gordon said.
There are still a potential 20,000 ballast water treatment retrofits to be carried out over the next five years, however.
Offshore budget cuts and cruiseship fleet shutdowns have slashed work in these sectors, but renewables offer hope, Clarksons believes.
"Delays to surveys and retrofit projects may well lead to a rebound in activity later in 2020 (and potentially increasing off-hire time for the world fleet?), while challenging shipping markets and keenly competitive yard pricing could also provide an incentive for some owners to undertake retrofits while earnings remain under pressure," Gordon said.
"In the longer term, and with the potential for environmental pressures and regulation to amplify post Covid-19, shiprepair yards may have an important role to play in shipping’s 'green transition', installing fuel conversions and wide ranging technologies to reduce emissions."
