Not business as usual for ship repairs

Ship repairs haven’t remained in “business as usual” mode during 2020. In a recent weekly report, shipbroker Intermodal highlights that by the end of 2020, the ship repair sector ends up in a completely different form than expected a year ago. From the era of scrubber retrofits and packed shipyards we have moved into the era of massive requests for dry-dock postponements, remote attendances, and owners struggling to undergo only the very minimum repairs, owing to the ongoing COVID-19 pandemic.

Mr Vassilis Vassiliou, Intermodal’s ship-repair broker articulated, “We would have expected to see more scrubber retrofits, which would have been affected by the oil prices and price spread between high and low sulfur content on HFO. Maybe more conversion projects, since there were a lot of positive aspects speculating that the offshore business will be revived. This high demand for ship-repairs would have been followed by a serious relaxation, similar to the one we witnessed in 2016 – since the five years cycle determines vessel docking schedule. This depressing market would not be as steep as it was in 2016, considering all the above would be supported by the ongoing trend of BWMS installation, by which we come across in most of the ship-repairs nowadays”.

COVID-19 shouldn’t change what we should expect from the market, he continued “Such events will occur sooner or later with COVID-19 spread only affecting the time these developments will occur. But eventually changes will take place. Therefore, we expect next year will be a busy year for all the repair yards and by the end of 2021 to notice a significant slowdown in demand”.

On travel restrictions, Mr Vassiliou mentioned that the main concerns are over the travel restrictions which still have not been stabilized. For Asia, where most of the repairs take place, governments are issuing an LOI to which Superintendents or specialists can travel under special permission. The time and requirements for getting the LOI vary from country to country and from city to city, and they keep changing with the spread of the virus. If more cases observed in one area, the LOIs are immediately withdrawn and had to be reissued. This creates a lot of confusion during the planning phase.

In conclusion, owners who cannot ensure that their personnel will be able to attend the repairs have to either request a postponement or try to change the vessel’s itinerary to bring her close to places free to attend or use locals to attend to the repairs. Of course, the first option is the most preferable and has resulted in massive postponements and, consequently, a lot of dry-docks piled up for the near future.

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