Challenges loom for marine fuel change
Enforcement may determine demand for low-sulfur maritime fuels required under regulations that take effect in 2020, analysts told the American Fuel and Petrochemical Manufacturers’ conference in New Orleans, Louisiana.
Countries with which shipping agencies often register lack the resources or incentives to police compliance with the upcoming International Maritime Organization rules, Stillwater Associates senior associate Ralph Grimmer said. That could leave up to 30pc of the market using fuel that does not meet the 0.5pc sulfur specification, down from today’s 3.5pc sulfur requirement, he said.
Supramax market remains in bullish territory
The Index remains in bull territory and is now on a Leg 5 on the weekly chart. Near term technical resistance is at USD 12,118. The April futures are currently in a corrective phase having made a lower low, technically we remain bullish above the shorter period EMA’s. The rolling front month futures would suggest this is a leg 4 correction and not a market top. Like the April contract the Q3 18 futures are in a corrective wave 4 phase.
Uncertainty looms over extent of scrubber use
A cloud of uncertainty over the marine fuel mix hovers ahead of the International Maritime Organization’s global sulfur cap regulation, with many sources saying that shipowners are likely to wait and watch before choosing a viable option including using scrubbers to comply with the rule.
Less than two years remain before the IMO’s sulfur cap comes into effect on January 1, 2020, requiring shipowners to burn 0.5pc sulfur-compliant bunker fuel compared with 3.5pc sulfur currently. They have a variety of options — 0.5pc sulfur bunker fuels, marine gasoil, scrubbers with HSFO, or alternatives such as LNG, LPG and even methanol.
Harvey bankruptcy puts us lng bunkering in focus
The fledgling US Gulf coast LNG bunkering market will not be significantly impacted by Harvey Gulf International Marine’s filing for bankruptcy protection, Harvey chief executive Shane Guidry told Argus.
The company has played a leading role in the promotion of LNG for bunkering in the region. Harvey Gulf is the sole LNG bunkering supplier in the Gulf of Mexico. Harvey Gulf has LNG storage capacity of 270,000 USG, equivalent to about 22.5mn cf (637,000m³) of gas, in Port Fourchon, Louisiana from where it supplies LNG for bunkering via truck.
Staggering 265-fold hike in labour levy at ports killing coastal shipping
The government’s practice of continuing to charge notional labor cess on coastal cargo operations, despite the fact that most ports are now mechanised and do not require manpower for loading and unloading, is taking a toll on the country’s coastal shipping operators. Many are losing business to rail and road transport, and to ports run by the private sector. In some cases, the levy for a single labor job is as high as 265 times the total labor cost. Some ports have reduced it to 150 times, but others like Kolkata, Cochin and Mumbai continue to charge the cess in the absence of other sources of revenue.
The tanker orderbook: watching the tide go out
Shipbuilding Focus last took a look at the tanker orderbook in late 2015, when it was heading towards its most recent peak, following a year of firm ordering.
Since then, the pattern has reversed, and in November last year the orderbook hit 66.1m dwt, its lowest level since 2013. With significant delivery volumes ongoing, and contracting currently remaining limited, the trend appears to be well-established. Against a backdrop of weakening market conditions, the tanker (10,000+ dwt) orderbook has declined in size by 35pc in dwt terms since the start of 2016, to stand at 632 units of 67.2m dwt as of 1st March 2018. This was due to both historically weak ordering in 2016, and firm deliveries, which last year reached their highest level since 2011 in dwt terms.
NE Asia traders mull impact of us steel tariffs on bunker sector
Northeast Asian bunker fuel traders were still mulling over the implications that US tariffs on steel and aluminum imports would have on the bunker fuel market, with most saying it was still too early to tell if regional bunker fuel volumes and trade would be affected on the back of any decrease in trade flows from Northeast Asia to the US. Last week, US President Donald Trump signed off on previously announced tariffs on steel and aluminum imports, which will see the US implementing a 25pc tariff on imports of steel and 10pc on aluminum, effective March 23.
Singapore will remain world’s top bunkering hub post 2020
Singapore will continue to be the world’s largest ship refueling destination going into 2020 and beyond, Maersk regional trading head Peter Beekhuis said Friday at the S&P Global Platts Asian Refining Summit in Singapore.
The efficiency, transparency and the infrastructural advantage will hold Singapore in good stead,” Beekhuis said in response to an apparent concern that the city-state may likely lose its dominant position to other bunkering destinations, especially China, within this region, in a low sulfur emissions world. The International Maritime Organization’s 2020 global sulfur cap rule, hailed as one of the most significant changes for the shipping industry, starts January 1, 2020.