Oslo-listed dry bulk shipping company Jinhui Shipping and Transportation Limited believes the use of the low-sulphur fuel is the most efficient way to comply with the upcoming suphur cap in 2020.
The hot debated topic has put the shipping industry in a conundrum as ship owners and operators have to decide what is the best and most cost-effective way for their fleets to comply with the regulation coming into force in less than a year and a half. The most popular options on the table have been scrubbers, low sulphur fuel and LNG.
For the time being, Hong Kong-based Jinhui is not on the scrubber team. The bulker owner and operator said that it is refraining from investing in scrubbers as the “long-term technical and commercial viability of scrubbers is yet to be proven.” In addition, the company raised the issue of the investment cost, saying further benefits are likely to arise with further patience as the cost of scrubbers has been on the decline.
“We expect the availability of such product will become abundant at reasonable costs with time, given the likelihood of an increasing demand,” the company said announcing the results for the second quarter and the first half of 2018.
Jinhui has returned to the black in the first half of the 2018, recovering from a loss from last year due to improved freight rates in the spot market. For the first half of the year the company’s net profit stood at USD 5.3 million, against a loss of USD 8.7 million a year earlier. Revenue for the six-month period reached USD 40 million, up by 19 pct from last year.
Market fundamentals for the dry market are favorable, according to Jinhui, on both the demand and supply side, as China’s imports appetite remains strong, and interest in ordering newbuildings is kept at bay.
On the geopolitical side, the company said that the U.S.-China trade dispute could turn into one of the largest trade conflicts in the history, adding that the tensions are likely to further escalate before getting better.