In its latest quarterly results report, MPC Container Ships (MPCC) says that it ‘foresees attractive opportunities and charter rate recovery potential in a IMO 2020 environment’.
Although the company reported a net loss of $11.4 million for the third quarter (Q3) of 2019, it was predicting an upswing and was confident that its scrubber installation programme would stand it in good stead when the new fuel regulations come into force on 1 January.
MPCC’s CEO Constantin Baack commented: ‘Despite a continuously challenging market environment burdened by a panoptic slowdown in world economic activity, the container shipping charter rate environment has stabilised in recent months. The feeder segment witnessed a moderate supply-demand rebalancing in Q3 2019, albeit with a more hesitant growth trajectory compared to larger vessel segments.
‘MPC Container Ships is well-prepared for IMO 2020. The fuel-changeover programme is nearing completion and the scrubber installations are in execution in H2 2019, as is evident from the impact on the company’s utilisation and results. Six out of ten vessels selected for exhaust gas cleaning system installation have been successfully retrofitted. We expect the remaining four vessels to be equipped with scrubbers by end-of 2019 in accordance with the planned project schedule.
‘We foresee attractive opportunities and charter rate recovery potential in a IMO 2020 environment. Prominent factors supporting improved market conditions are scrubber programme delays reaching well into 2020, increased ship recycling due to both the sulphur emissions cap regulations and ballast water management system code, and a continued low supply growth. In such a scenario, MPC Container Ships is well-positioned to capture the expected benefits.’
Assuming that MPCC’s scrubber installations go according to plan, the company will have 10 scrubber-equipped vessels in play when IMO 2020 comes in force – which is a significant proportion of its fleet. As of 30 September 2019, the group owned 68 container vessels, of which 60 were fully owned and eight operated in a joint venture.