• 2016 November 8 09:19

    IBIA says global sulphur cap could create bunker market ‘winners and losers’

    IBIA says global sulphur cap could create bunker market ‘winners and losers’.

    Even if, in theory, globally there is refining capacity to produce sufficient fuels to meet the 0.50% sulphur cap in 2020, if you take a more detailed look the picture is very different.

    In fact, several countries told the 70th session of the Marine Environment Protection Committee (MEPC 70) that they would not have sufficient refining capacity to offer compliant fuels to ships in 2020. Some of these countries are major bunker markets today, providing large quantities of residual fuel oil to ships calling at their ports, and some are also major providers of residual fuels to bunker markets in other countries.

    IBIA has also spoken to representatives for other countries and refineries who have said that, without a doubt, they will not be able to replace current supply volumes of high sulphur marine fuels with compliant fuels by 2020. Some will even struggle with 2025 due to dated refineries with limited scope for investments in upgrades.

    The reality, then, is that bunker markets in several ports and countries that currently provide significant bunkering volumes will not have similar volumes of compliant fuels available in 2020.

    If these ports and countries want to maintain current bunkering volumes, they would rely on imports. Some bunker markets, in particular the world’s major bunkering hubs, already rely on imports to meet bunker demand and perhaps for these the transition to a new low sulphur regime will be less painful. For those that have long relied solely on local refineries, it will be more challenging.

    One consequence pointed out by a member state during MEPC 70 is that there are regional imbalances in availability of compliant fuels. It is presumed that these imbalances will be addressed by transporting fuel cargoes around the globe, ironically causing greater demand for shipping and therefore increasing CO2 emissions and pushing up transport cost as a consequence.

    It has also been suggested that bunkering patterns may change as ships gravitate toward ports that can most readily provide compliant fuels.

    If this is the case, these regional imbalances in availability of compliant fuels could create bunker market “winners and losers”. The losers would be those countries, ports and companies that are unable to maintain supply of competitively priced compliant fuels, thereby losing sales volumes.

    The winners would be those countries, ports and companies that either have compliant fuel readily available from local sources, or that are able to adapt their cargo imports and infrastructure to maintain or even gain sales volumes.

    For those playing their cards right, the 0.50% marine fuel sulphur cap coming in 2020 could present great opportunities and give them a winning hand, especially if they are able to provide compliant fuels at competitive prices relative to other bunkering ports.

    There is, however, a joker or two in the pack.

    MARPOL Annex VI has a fuel oil non-availability clause, stating a ship “shall not be required to deviate from its intended voyage or to delay unduly the voyage” in order to obtain compliant fuels. This is a situation that may occur quite frequently in 2020 and possibly beyond.

    The question is whether ship operators are happy to use this clause and lift non-compliant fuels in ports with frequent shortages or even no availability of compliant fuels, or if they will do their utmost to take most of their bunkers in ports with reliable availability of compliant fuels. There’s also doubt as to whether all ships will comply at all times when operating on the high seas if there is no risk of getting caught or penalised.

    These jokers in the pack could impact the balance between bunker market winners and losers, at least in the short term.




2018 December 17

15:27 Nor-Shipping and Nordic Innovation team up for “Sea Meets Land” funding initiative
15:17 PETRONAS releases Annual Activity Outlook report for 2019-2021
14:56 NOVATEK elects a new member to the Management Board
14:37 Average wholesale prices for М-100 HFO down to RUB 15,328 in RF spot market
14:13 Damen’s triple delivery for Murjan Al Sharq Marine Contracting
13:41 Pacific Fleet and Indian Navy warships practice inspection operation as part of Indra Navy 2018 Russian-Indian naval exercise
13:19 Queen Máxima christens Van Oord's TSHD Vox Amalia
12:58 9 icebreaker escort operations performed in eastern part of Gulf of Finland during 24 hours on December 16-17
12:36 Samsung Heavy Industries secures yet another contract for an LNGC
12:23 Saab secures shipping safety contract for Shangai container port
12:00 Composit supports the 6th Forum of Dredging Companies as its Sponsor
11:42 Milaha unveils large plans to upgrade its shipyard in Mesaieed
11:01 IBIA welcomes decision by IMO’s MSC to add new item to its agenda to address concerns about fuel safety
10:43 SENER to design passenger vessel for Tanzanian ferry operator
10:17 Brent Crude futures price down 0.02% to $60.27, Light Sweet Crude – up 0.21% to $51.58
09:58 Port of Singapore throughput in 11M’18 grew by 0.4% Y-o-Y to 575.44 million tonnes
09:40 Floating regasification plant “Marshal Vasilevsky” arrives in Kaliningrad
09:15 Baltic Dry Index is up to 1,401 points

2018 December 16

16:09 Navios Acquisition completes acquisition of Navios Midstream
15:23 Thun Tankers names environmentally adapted tanker Thun Evolve
13:21 Traxens trials IoT network in port environment for first time, at MSC Terminal Valencia
12:32 Executives must watch both sea and air amid trade war tensions, warns Xeneta
10:55 CMA CGM announces FAK rates from ISC to North Europe and the Mediterranean
10:11 PGNiG receives third spot delivery of US-sourced LNG at Świnoujście

2018 December 15

16:23 MOL Passenger Line receives award for outstanding performance in 'Cruise of the Year 2018'
14:53 CMA CGM to implement GRR for India East Coast-West Africa trade
13:51 CMA CGM announces LSS on services from / to China, Hong Kong and Taiwan
12:44 NYK Cruises receives Grand Prix Award for 2018 World Cruise
11:27 TT-Line places order for RoPax "green" ferry with China's Jiangsu Jinling Shipyard

2018 December 14

18:17 Hapag-Lloyd to increase rates from East Asia to Mexico, Central America, West Coast of South America, Caribbean & Panama
17:48 Petersburg Oil Terminal puts into operation its emergency response team
17:33 Vinalines to open container shipping centre next week
17:30 Fairway adjustment will simplify Elbe traffic control already next year
17:27 Final cruise ship for the year calls to the Port of Gothenburg
17:23 The MV Magda joins the Klaveness Bulkhandling pool
17:16 India’s containerised export up 10% in the third quarter of 2018
17:13 FSL Trust announces newbuilding agreement for the construction of two LR2 product tankers
17:13 Havyard project with Havila Kystruten on hydrogen-powered coastal route operations to receive over NOK 100 million in funding from Pilot-E
16:24 World Fuel Services expands bunker operations in US leading up to 2020
15:57 IMO held training workshops in Cameroon Single Window for Foreign Trade Transactions
14:49 Onezhsky Shipyard lays down self-propelled hopper barge of Project HB600
14:08 Irish Continental Group plc takes delivery of cruise ferry W.B.Yeats
13:55 WMU takes part in Ocean Literacy Conference
13:31 First in industry ADNOC co-loads LPG and propylene onto same vessel in Ruwais
13:10 WMU hosted round table discussion regarding key challenges facing IMO
12:53 Bunker market at the Port of Saint-Petersburg, Russia shows mixed price movements (graph)
12:32 Nordic American Offshore secures contract for its PSV NAO Viking
12:11 Rosrybolovstvo supports 2nd Dredging and Hydraulic Engineering Structures Congress
11:50 Association of Commercial Sea Ports celebrates its 30th anniversary
11:24 Gazprom and Itochu sign MoU under Baltic LNG project
11:06 Scorpio Bulkers announces time charter-out agreement
10:48 Domestic ferry safety exercise conducted in Indonesia
10:25 IMO holds training for managing insecurity in west Indian Ocean and Gulf of Aden
10:06 EC adds six new yards to its ‘European List of ship recycling facilities’
09:47 Brent Crude futures price down 0.61% to $61.05, Light Sweet Crude – down 0.4% to $52.37
09:25 GTT notified by HSHI for the tank design of two new LNG carriers for CMM
09:18 Baltic Dry Index is up to 1,365 points
08:06 Fincantieri publishes its Sustainability Plan 2018-2022
07:14 Port of Long Beach cargo volume up to 621,835 TEU in November 2018
06:09 Mitsubishi Shipbuilding holds christening ceremony for LPG carrier "LAUREL PRIME"