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Wednesday, May 27, 2020

Low Sulphur Fuel Oil News

Source: BIMCO

BIMCO: 2020 and the Collapse of Bunker Fuel Markets

The sulfur regulation from the International Maritime Organization (IMO) that came into force on 1 January 2020 took the center stage in the shipping industry at outset of the new decade. Four months on, the spotlights have turned to the coronavirus and the OPEC+ oil price war.The outlook for global economic growth remains bleak as the world is faced with the largest recession since the Great Depression in the 1930s.Commodity prices have declined across the board and most recently…

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China to Issue VLSFO Quotas in Move to Grow Bunker Market Share

China is set to release its first-ever quotas to export very low sulphur fuel oil (VLSFO) with total volumes of 10 million tonnes for this year, six industry officials with knowledge of the matter said on Tuesday.The quotas, which came in the wake of Beijing’s policy in January to offer tax sweeteners to boost local production of the fuel, paves the way for Chinese refiners to almost fully cover the demand from its coastal bonded marine fuel market of 12-14 million tonnes annually.The quotas will be issued to four state-run firms - Sinopec Group, CNPC, China National Offshore Oil Company (CNOO

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Most Bunker Sales in Singapore are Low-sulphur Fuels -BIMCO

Low-sulphur fuels accounted for 84% of total February sales in Singapore, slightly up from 83% in January. The sale of low-sulphur fuel oil (LSFO) made up the largest component at 71.5%, with marine gas oil (MGO) accounting for 12.5%, BIMCO reports.Total bunker sales in February fell 16% to 3.9 million metric tons compared with January, reflecting lower demand for shipping as the coronavirus paralyzed intra-Asian supply chains.Now that both the sulphur cap and the non-compliant fuel oil carriage ban have come into force…

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China's Bunker Fuel Demand Plummets

China's marine fuels sales fell by as much as 50% in February as the rapidly spreading coronavirus and prolonged Lunar New Year break strangled freight movement in and out of the global manufacturing powerhouse, trade sources said.The epidemic, which has killed almost 3,000 people and infected about 80,000 in China alone, triggered the sharpest contraction on record for Chinese factory activity in February and caused massive port congestion because of labor shortages.The resulting plunge in freight demand has knocked 40% off Asian prices for very low-sulphur fuel oil (VLSFO) since early Januar

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Maersk to Raise HSFO Bunker Fuel Consumption to 25%

Danish shipping group A.P. Moller-Maersk plans to raise the proportion of high sulphur fuel oil it consumes from 10% to 25% by the year-end, CEO Soren Skou says.The world's largest container shipping firm consumed a total of around 11.80 million tonnes of shipping fuel last year.Maersk's current shipping fuel use comprises of around 10% ultra low sulphur (0.1%) fuel oil, 10% high sulphur fuel oil and the remaining 80% is low sulphur fuel oil. (Reporting Stine Jacobsen and Shadia Nasralla. Writing by Ahmad Ghaddar; editing by David Evans)

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Low-sulphur Fuel Oil Prices Drop

Prices for very low sulphur fuel oil (VLSFO) in ports around the world have fallen within the first month since the International Maritime Organization's (IMO) new regulation for a 0.50% global sulphur cap for marine fuels has taken effect.Singapore has seen one of the largest drops in the price of VLSFO, which peaked on January 7, 2020 at $740 per metric ton (MT) and dropped $99 to $641 per MT on January 22, BIMCO points out.Prices rose in December as shipowners transitioned…

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Low-sulphur Fuel Sales Surge

The final quarter of 2019 marked a massive decline of high-sulphur fuel oil (HSFO) sales, as the industry transitioned into compliance of the International Maritime Organization's (IMO) 2020 Sulphur Cap (IMO 2020). In Singapore, the world’s largest bunkering hub, the bunker sale landscape saw significant change as the sale of high-sulphur fuel oil dropped tremendously in a matter of months. In contrast, the sale of low-sulphur fuels skyrocketed in the final quarter.The first wave…

Copyright: Suriyapong/AdobeStock

China Tax Waiver for Cleaner Ship Fuel Exports

China has approved a long-awaited tax waiver on exports of cleaner ship fuel, paving the way for refiners to boost output, though Beijing may initially limit shipments to focus on growing its coastal marine fuel market, state refiner officials say.Ships globally have switched to lower sulphur fuels, or use emissions-removing devices, to comply with new rules imposed by the International Maritime Organization this year.China's State Council, or cabinet, gave the go-ahead to waive taxes on the 0.5% or very low sulphur fuel oil (VLSFO)…

AdobeStock / © Mikesjc

China Stocks up on VLSFO Ahead of IMO2020 Deadline

Chinese marine fuel suppliers have signed up short-term deals to buy very low-sulphur fuel oil from companies like oil major Shell, Germany's Uniper and U.S. commodities trader Freepoint ahead of a new standard on emissions for the global shipping industry that kicks in on Jan. 1.While China's state refiners have pledged to produce a combined 14 million tonnes of the fuel for 2020 that complies with the tighter rules set by the International Maritime Organization (IMO), Beijing…

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CMA CGM and Total to Develop LNG Ship Refueling in Marseille

Container shipping firm CMA CGM will use the French Mediterranean port of Marseille for refueling some of its planned gas-powered vessels, backed by a supply partnership with energy group Total.Total will supply liquefied natural gas (LNG) and a refueling barge to enable CMA CGM to refuel LNG-powered vessels at the Marseille-Fos hub starting in 2021, the companies said in a joint statement on Wednesday.The initiative covers five vessels with a capacity of 15,000 twenty-foot equivalent…

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Asian Refiners Strive to Finish IMO Preparations

At SK Energy's largest refinery in South Korea, engineers are rushing to complete a new processing unit ahead of schedule as the firm looks to boost sales of low-emission fuels before new marine fuel standards take effect in just one month.In Japan, the country's second-biggest refiner Idemitsu Kosan Co is taking a more cautious stance, increasing capacity for low sulphur fuel oil (LSFO), but also relying on blending to produce IMO 2020 compliant bunker fuel.The different approaches…

AdobeStock / © 14KT Gold

Fuel Market Calm ahead of IMO Changeover

Fears about a shortage of diesel and other middle distillates stemming from new marine pollution regulations have receded, with distillate premiums falling to some of the lowest levels for two years.From the start of 2020, ocean-going ships will be required to use low-sulphur fuels or employ exhaust gas cleaning systems, known has scrubbers, under pollution control rules approved by the International Maritime Organization (IMO).Fuel traders and shipowners have warned for several…

Pic: Sinopec

Sinopec Builds 100 Barge VLSFO Fleet

Chinese energy giant China Petroleum & Chemical Corporation (Sinopec) is planning to build a fleet of 100 barges over the next three years as part of its mission to become a major regional supplier of the IMO 2020-compliant very low sulphur fuel oil (VLSFO).According to a report from Reuters, this would be one of the top Asian refiner’s biggest shipping investments, Sinopec hopes the fleet would serve its stated ambition to become a top regional supplier of VLSFO.The fleet would include new orders of 50 vessels of 8…

Pic: Neste Corporation

Neste Offers LSFO in Germany

Finland’s oil refiner Neste Corporation has made low-sulphur fuel oil (LSFO)available in Bremerhaven, Germany in response to the upcoming IMO 2020 global regulation.Neste and the German BMT Bunker und Mineralöltransport GmbH have signed a partner agreement concerning distribution and sales of Neste MarineTM 0.5. This new marine fuel, containing maximum 0.5% sulphur, has been available in Bremerhaven, Germany, since the beginning of November 2019. BMT is a bunkering services company with a long experience in the sales of marine fuels.

Graph: BIMCO

BIMCO Offers Bunker Fuel Price Monitoring

BIMCO has developed a monitoring service for bunker prices, with data provided by MABUX, which is now available to all BIMCO members. The new interactive graphs allow price fluctuations in the major bunkering hubs of Singapore and Rotterdam to be tracked. They will show the bunker prices for 380cST HSFO (high sulphur fuel oil) and MGO LS (marine gas oil low sulfur), both in USD per metric ton, as well as the spread between the two fuel types, with data available since June 2017.

file image (credit: AdobeStock / © dbvirago

U.S. Sanctions Deal Blow to LSFO for 'IMO 2020'

Highly sought after types of oil best suited to making cleaner shipping fuel are suddenly finding they are a tougher sell for thirsty East Asian markets, traders say, in an unintended consequence of U.S. sanctions on a Chinese shipping fleet.With just over two months until environmental rules are set to mandate the biggest changes to ship power in over a century, certain rare types of West African oil have soared in value but have had to be marked down due to the higher costs of transport.The United States imposed sanctions on units of China's COSCO on Sept.

A large bulker awats cargo at an African port (Credit: Joe Keefe)

Tramp Shippers Challenged by IMO 2020

Shipping companies running itinerant merchant vessels known as tramps are concerned about sourcing fuel to comply with one of the biggest ever shake-ups of the industry next year, the head of the International Chamber of Shipping (ICS) said.The International Maritime Organization (IMO) has banned the use of fuel with a sulphur content exceeding 0.5% from the beginning of January 2020, down from a maximum of 3.5% now, unless it is to power a ship equipped with a "scrubber" to clean the pollutant from exhaust emissions."We believe the (fuel) supplies will inevitably be patchy outside the main bu

Hapag-Lloyd to Convert Containership to LNG

As the maritime industry increasingly searches for means to reduce emissions in the face of legislative mandate, from Germany comes news of a unique 'world first' project to convert the 15,000 TEU containership Sajir to LNG, resulting in an estimated reduction of CO2 emissions from 15 to 30 percent.While the use of LNG as fuel in the commercial newbuild ship sector continues to gain traction, the refit of existing ships to LNG has been slower in developing, owed mainly to the…

Image Credit: AdobeStock/ © 14KTGold

Singapore's Ocean Tankers tests IMO-2020 Compliant Fuel

Off the coast of Singapore, the world's largest ship refuelling centre, a bunker barge sidled next to the supertanker Pu Tuo San to fill the giant vessel with a new type of fuel that will meet global standards that start up in January.With a little over five months left until stricter marine fuel rules come into effect, shippers such as Singapore's Ocean Tankers that own the very large crude carrier (VLCC) Pu Tuo San have started testing out lower sulphur fuel to prepare their…

IMO 2020: Fujairah Tightens Exhaust Rules Ahead of 2020

Key Middle East oil terminal bans open-loop scrubbersFujairah in the United Arab Emirates has become the latest major port to ban a type of fuel exhaust cleaning system to comply with a coming tightening in rules regarding global sulphur emissions, mirroring similar moves in Singapore and China.Under International Maritime Organization (IMO) rules that come into effect from 2020, ships will have to reduce the sulphur content in their fuel to less than 0.5 percent, compared with 3.5 percent now…

Photo: John Nilsen (Bunker Purchasing Manager), Håkon Kiil (Head of Business Analytics) and Geir Frode Abelsen (Head of Technical Operations)

Höegh Autoliners Readies for IMO 2020

Norwegian shipping company Höegh Autoliners AS is now preparing its fleet for the change in fuel, having chosen Very Low Sulphur Fuel Oil (VLSFO) and Low Sulphur Marine Gas Oil (LSMGO) for complying with IMO 2020.In the Bunker department, new bunker patterns are being planned for and in the commercial section, the new rules also require attention.IMO 2020 entails a great shift for the shipping industry and the preparations started long ago in Höegh Autoliners.Håkon Kiil, Head…

Richard Greiner (Photo: BDO)

Shipping Confidence Dips as Trade War Worries Weigh

Confidence in the shipping industry fell in the past three months to its lowest level for two and half years, according to the latest Shipping Confidence Survey from leading shipping adviser and accountant BDO. Yet owners, charterers and managers were more confident than they were at the time of the previous survey in May 2019.The average confidence level recorded by the survey in the three months to end-August 2019 was 5.8 out of a possible maximum of 10.0. This compares to the…

Image: Danish Shipping

Danish Shippers to Install Scrubbers

Denmark-based shipping companies prefer to install exhaust gas purification systems, the so-called scrubbers, on their ships."The scrubbers clean the exhaust smoke from the engines and thereby remove Sulphur and other particles which enable the ships to meet new international requirements," says Danish Shipping, which represents the danish shipping industry.With its 183.2-meter long hull, Torm Laura takes up a lot of space at the FAYARD yard on Funen, Denmark. Every day, the ship transports everything from oil to chemicals on the seven oceans…

A typical, one-of-a-kind, multi-purpose offshore transfer of cargo. CREDIT: AAL

Trust and Independence:

Key metrics for a consolidating market of Multi-Purpose Vessels.The multipurpose sector has experienced a tough first half of 2019, following a trend of difficult market conditions spanning over a decade. Fallout from ongoing global political trade discussions is taking its toll on both project and commodity trades, cutting down volumes at a time when external competition from non-MPV carriers is at its most fierce and the MPV fleet is still struggling with overcapacity. Still…

File Image: A EuroNav VLCC underway at sea (CREDIT: EuroNav)

Euronav planning LSFO STS at Malta

Euronav has chartered a tanker to bring a 30,000 tonne cargo of low-sulphur fuel oil from northwest Europe to Malta, where its megatanker, Oceania, has been parked offshore since Jan.

Photo: From left to right: Young-Jun Yoon (CEO of PANASIA), Jun-Sup Shin (CEO of DSEC), Myeong-Ho Ha (CEO of Hyundai Corporation), Ho-Seon Hwang (KOBC), C.K. Yoo (President & CEO of HMM), Seok-Won Seo (President & CEO of SKTI), Kwang-Hun Ahn (CEO of Hyundai Global Service), and Ki-Cheon Nam (CEO of Multi Asset Global Investments)

HMM Intros Scrubber Installation Fund

South Korean shipping company Hyundai Merchant Marine (HMM) announced that it has signed a memorandum of understanding (MOU) to establish a win-win fund for scrubber installation in preparation for IMO 2020 and to seek cooperation in the shipping-related industries.The total investment amount will be KRW 153.3 billion (USD 135.8 million) which consists of HMM’s investment of KRW 46 billion and the rest of the amount of KRW 107.3 billion (including Korea Ocean Business Corporation’s…