Home / Shipping News / International Shipping News / Feature: Bomin’s exit from Singapore bunkers seen positive for other traders

Feature: Bomin’s exit from Singapore bunkers seen positive for other traders

The Singapore bunker market is getting ready to redistribute Bomin’s bunker sales volumes among existing players as the company’s departure date draws closer, industry sources told S&P Global Platts this week.

“Their volume will likely be distributed among the traders mainly as those accounts are more likely to be price-focused, meaning cheap volumes,” a bunker supplier said.

This comes at a time when the global bunker market is grappling with challenging market conditions amid increased competition, a plethora of environmental rules in shipping, and thinning trading margins. Players who can capture increased market share stand to benefit in such a scenario.

Bomin announced September 21 that it planned to exit the bunker markets in Singapore and Antwerp.

“The [Singapore office] will operate until the end of November,” a spokeswoman told Platts via email earlier this month.

Bomin was the 15th largest bunker fuel supplier by volume in 2017, according to data from the Maritime and Port Authority of Singapore.

Industry sources put its monthly supplies to the delivered Singapore bunker market at around 150,000 mt.

“The Bomin group is in a transformation and restructuring process and intense competition and low margins characterize the situation in all major ports,” Bomin Group Managing Director Jan Christensen said September 21.

“The main beneficiary of their exit would likely be the trading houses,” a bunker supplier and trader said.

“Only half of their monthly volume is physical while the other half is back-to-back, so the volume will trickle back into the trading chain. Overall it is good for us remaining suppliers; there are about 40 plus active ones left. Not sure of new exits; it’s hard to tell if this is a trend,” the source added.

Singapore had 52 accredited bunker suppliers as of October 17, down from 56 in early September last year.

This compares with as many as 71 suppliers in 2012. A few have left the sector voluntarily, while some errant players have been forced to exit due to the MPA’s strict vigilance. The implementation of mass flow meters for fuel oil deliveries from January 1, 2017, has also ushered in more transparency and spurred the departure of some players.

While sources were unsure if the number of accredited bunker suppliers in the Singapore market would shrink further, they remained positive about its growth prospects.

Singapore is the world’s largest bunkering port, with bunker fuel sales rising 4.2% year on year to a record 50.6 million mt in 2017, MPA data showed in January.

Industry sources said Singapore remained an attractive port for bunkering due to, aming other things, its location, infrastructure and MPA’s effectiveness in enforcing rules.

“We still see Singapore as a top bunkering hub going beyond 2020 due to its strategic location,” a Singapore-based bunker fuel trader said.

The port is readying itself well for sustainable shipping ahead of the International Maritime Organization’s changes in 2020, sources said. The IMO will cap the global sulfur content in marine fuels at 0.5% from January 1, 2020, from 3.5% currently.

MPA is working closely with the industry to ensure that Singapore is ready to supply low sulfur compliant fuels ahead of that date, Platts reported earlier.

The ministry in early October said it will make available the list of licensed bunker suppliers of low sulfur fuels in Singapore by mid-2019, and added it has set aside $5 million to co-fund the research and development of alternative fuels ahead of the 0.5% cap implementation.

MPA has also made good progress on LNG bunkering in Singapore over the last few years, including co-funding the construction of some LNG-fueled vessels, joining SEA\LNG and working closely with like-minded ports through the LNG Bunkering Port Focus Group.
Source: Platts

Recent Videos

Hellenic Shipping News Worldwide Online Daily Newspaper on Hellenic and International Shipping