SIMIC

Katherine Si | Nov 05, 2020

The figures which show a major jump in the volume of work per vessels were released at a recent association members meeting of the China’s ship repair companies.

The 19 member China ship repair yards posted an increase of 48% on total ship repair volume and while the number of vessels repaired increased by 11%.

Related: New ballast water compliance requirements enter force this week

Large value and work scope retrofits of exhaust gas cleaning systems, or scrubbers, and ballast water treatment systems (BWTS) have been a major factor driving growth for Chinese ship repairers this year.

Demand for scrubbers was driven by the IMO 2020 global cap on sulphur emissions from marine fuel at 0.5%, with exhaust gas cleaning systems allowing owners to continue burning lower cost high sulphur fuel oil.

Related: Scrubbers payback to lengthen on narrowing high-low sulphur fuel spread

The Ballast Water Management Convention came into force for existing vessels on 8 September 2019 with installations phased in between that date and 2024 with BWTS required to be fitted by a vessel’s next special survey.

As well as scrubber and BWTS retrofits Chinese yards have seen strong growth in repair and conversion orders for large-sized LNG vessel and high value-added vessels grew fast this year. Major Chinese ship repair yards suggested that local industry players should pay more attention to work on LNG and dual-fuelled powered vessels in the next few years.

With the drop in fuel prices this year due to the sharp drop in oil prices demand for scrubbers is expected to be muted going forward. Chinese yards predicted that the order volume of exhaust gas cleaning retrofit projects would decline in 2021 as many of the shipowners had canceled or delayed their plans. Yards also expect that  ballast water treatment equipment conversion projects will be postponed.