Home / Shipping News / International Shipping News / High-sulphur fuel stocks drop at ports for ships with scrubbers

High-sulphur fuel stocks drop at ports for ships with scrubbers

The number of ports at which high-sulphur fuel oil (HSFO) is offered is reducing and could be limited for ships equipped with scrubbers in the first months after 1 January 2020, when the International Maritime Organization (IMO) sulphur regulation takes effect, according to Marine Bunker Exchange, MABUX, which follows the global bunker market closely.

As the global bunker market adapts, and players observe how demand for the different types of bunker fuel will pan out in the first months after 1 January 2020, high-sulphur fuel oil (HSFO) inventories are reducing at a number of ports, as the use of non-compliant fuel will drop significantly under the new regulation, data from MABUX shows.

“We are seeing high-sulphur fuel oil stocks going down now, and the space for manoeuvring for the ships that are equipped with scrubbers is becoming narrower as a result,” says Sergey Ivanov, director at MABUX.

“We forecast that the HSFO market may be very small after 1 January 2020. If we look at the situation for HSFO, we see that inventories are reducing globally at the moment.”

Ivanov says the same process is being observed in many other main ports in Asia, such as Shanghai, Hong Kong and South Korea, and that HSFO sales in Rotterdam were down from around 1,941,000 cbm to 1,693,000 cbm in October.

On standby

MABUX believes that around 700 refineries globally are currently producing HSFO. By the end of this year, and at the beginning of 2020, however, the bunker exchange forecasts that at least around 200 refineries could announce that they will stop producing HSFO, at least until the market has settled and adapted to the new environment. The situation could change again in the second half of next year, when the trends of the global bunker market will become more visible.

“But the first half of next year will be the big question in terms of availability,” says Ivanov.

He believes the decision of whether to continue offering high-sulphur fuel oil – and how much – in 2020 and beyond could also be affected by uncertainty about future legislation of open-loop scrubbers, which have been banned in some ports because of fears of their effect on the environment. It is estimated that around 80% of all scrubbers installed are open loop, while about 18% are hybrid and 2% closed loop.

As a result of the IMO sulphur regulation, which puts a 0.50% sulphur limit on fuel from 1 January, the US Department of Energy expects that the share of HSFO consumed by the US ocean-going bunker fuel markets will decline from 58% in 2019 to 3% in 2020, after which it will rebound to 24% in 2022.

Information correct at time of writing in late November 2019.

Source: BIMCO Bulletin-December 2019 issue (http://portfolio.cpl.co.uk/BIMCO/201912/high-sulphur-fuel/)

Recent Videos

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