Monday, February 10, 2020

India- Crisis over Bunker Fuel Prices

Bunker fuel in a broad sense is used for any fuel which is poured into a ship’s bunkers. The role of this fuel is to give power to its engines

The north Asian countries are the major players in the case of marine trades and commerce, the recent coronavirus outbreak has led to an unprecedented crisis in the prices of bunker fuels.

All the ports lying between Shanghai and Hong Kong have reported an all-time low price of the bunker and marine fuels at the rates of $595/mt and $570/mt.

Global impact of these lowering prices

The recent outbreak of the crisis in the north Asian region has made the sellers very much unwilling to sell their fuel as they do not want to incur a loss.

This indefinite delay in the supply of bunker fuel to major ports of the region has impacted the marine commerce all over the globe. According to some sellers, this particular period of the year is very slow for business as the ship owners have a slow trade after the Lunar Year and the added threat of coronavirus outbreak has made them more pessimistic about purchasing bunker fuels.

The custom clearance situation

Along with the epidemic, the issue of more stringent custom checking procedures has slowed down the bunkering process considerably and all the major sellers across the north-eastern ports are bearing the brunt.

The worker and buyers sentiment along with more stringent clearance measures have impacted the global supply of bunker to all the major ports and the sea trade is expected to take a more massive hit in the upcoming weeks.

Measures being taken

The government is rising to the challenge and have extended their Lunar New Year holidays by a week and are instructing people to complete their work online. This is being done to obtain more time for containing the outbreak.

As per the report published by Value Market Research on the bunker fuel market, the high demand from the shipping industry as well as the oil & gas is anticipated to trigger growth in the market Despite the measures being taken, the market for bunker fuels has taken a heavy blow and the sales for February are expected to be the same, if not worse.

Anay Malhotra a qualified computer analyst turned freelancer who writes for Value News where his passion and hard work has earned him a Star Employee for 2 consecutive months. He has been working and exploring varied professionals like Modelling, Event Management and Writing.

Source: VMR News

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Friday, January 17, 2020

low-sulphur bunker fuel

Sinopec supplies 10,000 T of low-sulphur bunker fuel to east China

low-sulphur bunker fuel

China’s Sinopec has provided 10,000 tonnes of very low-sulphur fuel oil (VLSFO) to the eastern port city of Zhoushan, in order to supply vessels during the approaching Lunar New Year, the energy giant said.

The company plans to supply more such fuel to ensure market stability during the week-long national holiday that starts from Jan. 24, it said in a statement late on Wednesday.

The fuel, compliant with low-sulphur standards set by the International Maritime Organization (IMO), was produced by Sinopec’s Shanghai refinery.

The IMO rules that took effect from Jan.1 ban the global shipping industry from using fuels with sulphur content of more than 0.5%, down from 3.5% earlier, unless the vessels are equipped with exhaust-cleaning “scrubbers”.

Relying on its proximity to major Chinese ports, Zhoushan, in the province of Zhejiang, has gathered a few domestic fuel firms, including PetroChina, another state-owned energy giant, to offer VLSFO.

Sinopec said it had supplied a total of about 37,800 tonnes of VLSFO in last year’s fourth quarter.

China has approved a long-awaited tax waiver on exports of the fuel, paving the way for refiners to boost output, though Beijing may initially limit shipments to focus on growing its coastal marine fuel market.

Source : Reuters (Reporting by Muyu Xu and Shivani Singh; Editing by Clarence Fernandez)

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Saturday, January 11, 2020

Asia’s low sulfur bunker markets 2020

Asia’s low sulfur bunker markets set for strong Q1 as IMO 2020 kicks off

Asia's low sulfur bunker markets 2020

The recent strength in low sulfur bunker fuel markets across Asia is expected to continue well into the first quarter after the International Maritime Organization’s 0.5% sulfur mandate kicked in on January 1.

A rapid shift in demand towards cleaner fuels in Q4 last year boosted low sulfur bunker premiums significantly in December, flipping spot differentials from discount to premium at some major bunkering ports in Asia.

Singapore’s spot delivered marine fuel 0.5% differential to Mean of Platts 10 ppm gasoil assessment averaged at a premium of $23/mt in December versus a discount of $28/mt in November, S&P Global Platts data showed. The differential stood at a premium of $76/mt on December 31, the data showed.

Market sources are expecting the upward momentum to continue into Q1 amid steadily robust demand and tight prompt barging availability.

Recent ex-wharf offers for Q1 and January-loading term contracts have also surged in line with delivered market sentiment, Singapore-based sources said.

“I will offer at above plus $60/mt levels [over 10 pmm gasoil] if it’s for January term; delivered is strong so there is no reason to sell ex-wharf cheap,” a Singapore-based fuel oil said earlier this week.

Prices have surged from December-loading ex-wharf term levels, which were at discounts in the range of $50-$55/mt to MOPS 10 ppm, Platts reported earlier.

Nonetheless, most sellers were opting for delivered rather than ex-wharf sales due to stronger delivered margins.

“Suppliers are telling me that they prefer to just offer in the spot market… expecting the uptrend to continue into March,” a Singapore-based bunker trader said.

DEMAND SHIFT TO NORTH ASIA?

Singapore’s bunker price spreads to North Asian ports have also narrowed significantly in recent weeks, even though prices in both regions climbed in December. Delivered marine fuel 0.5% prices in Shanghai, which were $55/mt higher than in Singapore at the start of Q4, had crunched to $5/mt on December 31.

In addition, the Shanghai delivered marine fuel 0.5% spread to the Singapore delivered marine fuel 0.5% averaged $7/mt in December, narrowing from $17/mt in November. Shanghai prices even dipped below Singapore for the first time on December 4, at minus $4/mt, Platts data showed.

Shanghai prices marine fuel 0.5% prices had averaged $20/mt higher than Singapore’s between the launch of assessments on July 1 and December 31.

“If the Singapore price continues to be so expensive then we will switch to other ports — in fact we were already taking more at Shanghai on some days in December,” a Singapore-based source from a shipowner said.

“A bunch of ships [from a Chinese company] that couldn’t take delivery in Singapore are coming to Shanghai to fulfill their requirements, and due to the contract we have with them, we have to supply them as a priority, thus we have no more offers for the rest of the market,” a major China-based supplier said.

Spot offers in the region have thinned, with several suppliers in the region facing the same cargo tightness.

“As Singapore is tight, there is a lull in cargo imports into South Korea. Refiners have maximized production but it is still tight,” a bunker trader for the South Korean market said.

Similarly in Hong Kong, suppliers noted that buyers are now fixing orders earlier than usual to secure supply.

“We have only limited cargo for spot inquiries,” a bunker supplier based in Hong Kong said.

SUPPLY DEFICIT LOOMS

Most sources expected there would not be enough LSFO supply to cater to bunker demand across Asia in Q1 unless China started exporting in the near future.

The supply deficit would prompt some shipowners to take marine gasoil if they could not secure enough LSFO, market sources said.

“I think Q1 will still be quite supported [for LSFO]… if there’s any kind of easing, it will be in February… I think what’s going to happen next is that gasoil will become very expensive,” a major bunker supplier in Singapore said.

“Ultimately, Singapore will be the epicenter that people have to come back to if the neighboring ports are not doing well [in securing supply]. There’s a lot of strain on Singapore to fulfill the requirements for LSFO,” the supplier added.

However, traders expect Singapore to receive only 2 million-2.5 million mt/month of LSFO in Q1 due to limited supply from other parts of the world, Platts reported earlier. Singapore is the largest bunkering hub in the world, with monthly bunker demand averaging 4 million mt/month in 2019, according to data from Singapore’s Maritime and Port Authority.

Source : https://www.spglobal.com/

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Thursday, January 9, 2020

IMO 2020: Low sulphur fuel prices surge, discount to MGO vanishes

IMO 2020: Low sulphur fuel prices

With the coming into force of IMO 2020 very low sulphur fuel oil (VLFSO) prices have surged since mid-December nullifying the discount to marine gas oil (MGO).

While both VLSFO and MGO prices have climbed steadily over the last few weeks, rises have been higher for the former with the two types of fuel now trading at roughly equal prices.

In Singapore, the world’s largest bunkering port, price indications for VLSFO touched a high of $742 per metric tonne (pmt) on 6 January, up from $720 pmt a week ago and $581.50 pmt a month ago, according to data from Ship & Bunker.

Looking back further, Singapore VLSFO prices had remained relatively steady at around $520-550 pmt between July to November 2019 before a sudden hike from mid-December as the IMO 2020 deadline was approaching.

Singapore MGO prices, on the other hand, was seen at $745.50 pmt on 6 January, up from $702 pmt a week ago and $594 pmt a month ago. MGO prices have also been climbing swiftly to go past the $700-mark within a two-week period since mid-December.

“For the time being, the VLSFO to MGO discount has vanished in Singapore with both bunker fuels currently sold at around $700 pmt. With such a price convergence, the apparent advantage of VLSFO goes out the window,” observed Adrian Tolson, senior partner at consultancy firm 20|20 Marine Energy.

Tolson, however, pointed out that MGO will not remain cheaper than VLSFO, for logic maintains that VLSFO will get increasingly cheaper as more of the product becomes available and as more companies and barges start delivering it.

Bimco stated in a recent note: “Whatever the underlying cause, the price levels for VLSFO and MGO have risen respectively by 30% and 24% from start of December to the start of January. Such price increases are quite extraordinary for the low sulphur fuels, which have been trading at relatively stable levels throughout 2019, as opposed to the more volatile HSFO (high sulphur fuel oil).”

On the prices of HSFO, Tolson believes that bulk wholesale or contracted HSFO is expected to get cheaper in major ports. He noted that end of year bulk wholesale HSFO prices were $250 pmt in Rotterdam and $300 pmt in Singapore, and this will likely decrease once refinery inventory builds.

The price of spot Singapore 380 cst HSFO, however, was indicated higher at $399.50 pmt on 6 January, and prices had been firmly below $400 over the last quarter of 2019, Ship & Bunker data showed.

For ships fitted with scrubbers, those who have procured their HSFO on a term contract basis would have made the right call. But those ships with scrubbers yet without supply contracts may be facing troubles getting reasonably priced HSFO.

“Currently, the VLSFO-HSFO spread in Singapore is at $340 pmt, the third highest level since low-sulphur fuel became widely available. Similarly, the MGO-HSFO spread is at $346 pmt, the highest level since 2014,” Bimco stated.

“Translating the VLSFO-HSFO price spread into shipping terms, a ship burning 20 metric tonnes of fuel per day will effectively double its daily fuel costs from $7,400 per day to $14,200 per day when switching from HSFO to VLSFO. Such an uptick in fuel oil costs will surely have financial implications for many companies,” Bimco explained.

“Shipowners are most likely to be able to pass on the additional costs associated with IMO 2020 compliance when the balance of the underlying freight markets are favourable to them. With supply growth outpacing that of demand in all the major shipping markets, this is not currently the case. If current fuel prices are anything to go by, then the widening spread could have dire consequences for many shipowners, as many must carry the additional costs themselves,” Bimco added.

Source :https://www.seatrade-maritime.com/bunkering/imo-2020-low-sulphur-fuel-prices-surge-discount-mgo-vanishes

Saturday, January 4, 2020

Best Bunker Fuel Supplier in Chittagong