• 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.




2019 June 25

18:06 VARD orders seawater cooling for newbuild cable layer
17:34 ABP Humber Estuary Services (HES) purchased new £600,000 survey vessel
17:06 Q-Flex vessel sets delivery benchmark in Turkey
16:28 Awilco LNG posts vessel and contract update
16:22 Zhatai Shipyard to be provided with RUB 4.1 billion of budget investments in 2019–2021
15:59 Maersk introduces Maersk Spot, a new fully online product that simplifies the buying process for customers
15:15 NCSP Group announced decisions made at annual general shareholders' meeting
14:51 IMO: committed to implementation
14:20 ABP King’s Lynn investment attracts new construction industry customer
13:37 MAN B&W dual-fuel engines pass half-million hour milestone
12:59 ECSA celebrates the Day of the Seafarer
12:47 Bunker market sees mixed price movements at the Far East ports of Russia (graph)
11:58 Fuel technologies in the spotlight at ABS Hellenic Technical Committee
11:39 Dickson obtains status of international port
10:58 MEYER WERFT hands over Spirit of Discovery to the British cruise line Saga Cruises
10:42 Concordia Damen ships 18 hulls from Shanghai to Rotterdam
10:24 Gender equality is the theme of Day of the Seafarer 2019
10:03 Brent Crude futures price is down 0.81% to $63.66, Light Sweet Crude – down 0.88% to $57.39
09:46 MABUX: Bunker market this morning, June 25
09:16 Baltic Dry Index is up to 1,258 points

2019 June 24

18:05 Training Montenegro to combat oil spills
17:50 Four cruise ships visit the Port of Riga at the same time
17:27 Finnish Government proposes supplementary appropriation of EUR 40 million for basic infrastructure management
17:05 Austal delivers third guardian class patrol boat to the Australian Department of Defence
16:47 Incat Crowther announces contract to design a 65m catamaran passenger ferry
16:46 Construction and operation of dual-fuel ships has low economic efficiency – USC President
16:45 Maersk Drilling completes sale of jack-up Mærsk Giant
16:24 USC set to build floating electricity-generating facilities running on LNG supplied by bunkering ships
16:03 Van Oord and Mammoet enter into cooperation with scale-up Verton
15:45 United Shipbuilding Corporation to launch the first LNG-powered ferry for Ust-Luga – Baltijsk line in late July
15:30 United Shipbuilding Corporation establishes USC-Propulsion and USC-Interior subdivisions
15:03 MOL signs deal on a long-term charter contract to utilize "MOL FSRU Challenger" for Hong Kong Offshore LNG Terminal Project
14:42 New USC Vice-President, Civil Shipbuilding, to get into office on 10 July 2019
14:21 USC expects its Astrakhan cluster to build 12 river-sea class ships per year
14:03 Yang Ming announces new China-Thailand direct service
13:37 Port of Rotterdam Authority to collaborate with four new companies
13:25 Igor Vasilyev appointed as Acting General Director of FTI Rostransmodernizatsiya
13:02 ARIES gained ABS Certification: Middle East 1 st Remote Inspection Techniques specialist
12:20 BC Ferries releases year-end results
12:10 Keel laid for the first of Damen’s revolutionary new FCS 7011 Crew Change
11:56 Average wholesale prices for М-100 HFO down to RUB 15,377 in RF spot market
11:29 FESCO to launch new container train to China via Far East overland route
10:58 Southern Center of Shipbuilding and Ship Repair acquired property of Krasniye Barrikady plant
10:35 Satti floating drilling unit owned by Kazmortransflot delivered to Azerbaijan
10:13 Throughput of Chinese ports grew by 4.1% to 5.5 billion tonnes in Jan-May’2019
09:53 MABUX: Bunker Market this morning June, 24
09:52 Brent Crude futures price is up 0.4% to $64.71, Light Sweet Crude – up 0.68% to $57.82
09:34 Container throughput of port Hong Kong (China) down 7.7% to 7.55 million TEUs in Jan-May’2019
09:17 Baltic Dry Index is up to 1,239 points

2019 June 23

16:29 INPEX submits revised plan of development for Abadi LNG Project
15:13 Oceanwide Expeditions: Hondius sister ship m/v Janssonius ordered for 2021
14:19 CMA CGM announces FAK rates on Asia - Pakistan, India and Sri Lanka service
13:46 Coast Guard rescues five from capsized boat in Chesapeake Bay
12:43 Danske Commodities signs 20-year PPA with Hywind Scotland wind farm
10:29 TMC sets up office to support Chinese yards

2019 June 22

15:24 AAPA selects Christopher Connor as its new CEO
12:37 TMC contracted by VARD to supply marine compressors for Viking Cruises' vessels
11:23 ABS to class first ‘tri-fueled’ vessel for Harvey Gulf
10:13 Port of Oakland steps up as ships carry bigger loads than ever
10:05 Coast Guard responds to barge aground in Naknek, Alaska