Dual-fuel vessel orders are increasing after the low-sulfur fuel oil price hit an all-time high recently. An increasing number of shipowners are opting for those vessels such as LNG-powered ships to meet environmental regulations.

This year, the three major South Korean shipbuilders received orders for 154 vessels, and those include 68 ships in which LNG or methanol can be used as an alternative fuel. Specifically, the figure is 30 out of 111 in Korea Shipbuilding & Offshore Engineering, 24 out of 24 in Daewoo Shipbuilding & Marine Engineering, and 14 out of 19 in Samsung Heavy Industries. In addition, most of the single-fuel vessels are supposed to be equipped with a scrubber for SOx reduction or can be altered to use LNG, ammonia, or hydrogen as a fuel.

According to Clarksons Research, the ratio of alternative fuel vessel orders, which was 32.7 percent in 2021, is increasing fast and the ratio of such vessels in operation increased from 2.2 percent to 3.9 percent from 2017 to 2021, reaching 4.5 percent recently, and is expected to top 5 percent this year.

These days, the low-sulfur fuel oil price is continuing to rise and environmental regulations in the maritime industry are increasing, which means the global dual-fuel vessel demand is likely to keep rising. The fuel oil price per ton was US$535 on average last year but recently jumped to US$1,137 about the war in Ukraine and the resultant limited supply of Russian crude oil.

Marex Media