Successful Sea Trial of Project R032

On July 4, project R032, the 8^th scrubber retrofitting project Puyi provided for a renowned container owner from southeast Asia, successfully passed sea trial. The vessel is a 2378TEU container vessel classified by NK, retrofitted with U-type scrubber.

Although there has been many doubts about the prospect of scrubbers due to global economic recession caused by the COVID-19 outbreak, Taiwan Evergreen Marine Corp. still expressed great confidence for scrubbers:

The following is an excerpt from eworldship.com: 

The narrowing price spread between HSFO and VLSFO caused by plummeting oil prices has significantly affected the cost-effectiveness of EGCS. However, Taiwan Evergreen Marine Corp. remains optimistic about scrubbers, anticipating that investment return of scrubbers will gradually grow when price spread returns to a reasonable level.

It is recently pointed out by Zhang Zhengyong, Chairman of Evergreen Marine Corp., that according to the COVID-19 crisis, price of Brent crude dropped from $53.88 per barrel on February 20 to $40.80 per barrel on June 8, at a decrease rate of 24%; while at the same time, price of VLSFO dropped from $495 per ton to $305 per ton, at a decrease rate of 38%. As a result, fuel cost of shipping companies decreased dramatically compared with the same period of last year, alleviating negative impact of the epidemic on the shipping market.

Currently, nearly 40% of Evergreen’s fleets are installed with scrubbers. The products were expected to produce significant cost-effectiveness before the epidemic outbreak with a price spread of 200-300 US dollars between HSFO and VLSFO. However, ROI of scrubbers is greatly reduced under the current price level.

Nevertheless, Zhang stressed that after the crisis, international trade will pick up, and price spread between HSFO and VLSFO will gradually return to a reasonable level, and economic benefits of scrubbers will consequently return to the expected level.

At present, due to uncertainty of the epidemic, Evergreen has applied for a two-year loan of NTD 8 billion (about RMB 1.921 billion) from financial institutions, so as to proactively enrich and deploy operational capital and thus maintain customer confidence.

With implementation of the policy of "six stabilities" and "six securities", China's economy will gradually recover and improve, which will also promote the recovery of global shipping industry. We firmly believe that scrubbers, as important marine exhaust gas cleaning devices, will also usher in new opportunities.