Please find all the stories from last week concerning Sulphur 2020
News roundup – for week commencing 11 November 2019
Bunkerspot – (subscription)
ASIA PACIFIC: CHINA’S SINOPEC REPORTEDLY PLANNING 100-BARGE BUNKER FLEET
Chinese energy giant Sinopec is reportedly 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). https://www.bunkerspot.com/asia/49355-asia-pacific-china-s-sinopec-reportedly-planning-100-barge-bunker-fleet (subscription)
EUROPE: GALP SET TO ROLL OUT VLSFO AT ALL MAINLAND PORTUGUESE PORTS
The Portuguese refiner will begin domestic deliveries of its proprietary 0.50% sulphur fuel from 15 November. https://www.bunkerspot.com/europe/49346-europe-galp-set-to-roll-out-vlsfo-at-all-mainland-portuguese-ports
EUROPE: IMO 2020 WILL BOOST DEMAND FOR ADDITIONAL FUEL STORAGE CAPACITY
The introduction of the 0.50% global sulphur cap will increase the need for additional IMO 2020-compliant fuel and blend component tank storage, says René Loozen, Consultancy Director at Insights Global. https://www.bunkerspot.com/europe/49319-europe-imo-2020-will-boost-demand-for-additional-fuel-storage-capacity
(free to read) GLOBAL: PENINSULA PETROLEUM GROUP BOOSTS SUPPLY CAPABILITY AHEAD OF IMO 2020
The company has been supplying customers with VLSFO in Europe, the Americas and Asia since July and has also bolstered its tanker fleet and global storage capacity in preparation for the impending introduction of the 0.50% global sulphur cap. https://www.bunkerspot.com/latest-news/49342-global-peninsula-petroleum-group-boosts-supply-capability-ahead-of-imo-2020
Lloyd’s List (subscription)
Singapore boosts IMO 2020 bunker buffer
Singapore has VLSFO and marine gasoil amounting to more than a tenth of the port nation’s peak bunker sales volume stored in onshore tanks and VLCCs, according to a Wood Mackenzie estimate. Some of this volume, however, will be used to clean onshore storage tanks and fuel tanks on board ships About 40% of the inventory of very-low sulphur fuel oil and marine gasoil in and around Singapore is stored in very large crude carriers, one refinery analyst said. https://lloydslist.maritimeintelligence.informa.com/LL1129931/Singapore-boosts-IMO-2020-bunker-buffer
Bunkerworld (free subscription)
Monitoring of IMO 2020 compliant fuels vital as blending quickens: LuminUltra “Less sulfur means more bugs,” Taylor said. https://www.bunkerworld.com/news/155757
Sinopec is pushing ahead with plans to become a dominant supplier of very low sulphur fuel oil with Reuters reporting the Chinese energy giant is about to execute plans to order 50 bunker barges for delivery over the next three years as well as chartering in an additional 50 barges. https://splash247.com/sinopec-readies-grand-low-sulphur-plans/
Belgian tanker giant Euronav has signed a service agreement making Malaysia’s Linggi Port its supply base providing low sulphur fuel and other services for ships heading through Asia. https://splash247.com/euronav-firms-up-malaysian-bunkering-operations/
Hong Kong Shipping Gazette two article in full below http://www.shippingazette.com/menu.asp?encode=eng:
Greek shipping minister raises concerns about meeting IMO 2020 sulphur rule
WITH the January implementation of the International Maritime Organization’s low sulphur mandate rapidly approaching, Greece’s Shipping Minister Ioannis Plakiotakis has voiced long-standing industry concerns regarding safety, fuel quality and compliance issues.
Speaking at the World Shipping Summit in Shanghai, Mr Plakiotakis called on assembled dignitaries to find practical solutions to compliance issues, with a view to “ensuring fair competition and a level playing field for global shipping”.
Speaking to London’s Lloyd’s List on the sidelines of the conference, Mr Plakiotakis admitted that his comments were a deliberate attempt to garner broader backing for a more pragmatic approach at the International Maritime Organization, where Greece has often been an isolated critic of the sulphur rules.
“I have expressed my worries directly to the IMO Secretary General,” he said. “The gas question, low sulphur availability – but I’ve had no real answers yet and there isn’t a plan B right now if something goes wrong.”
While the Union of Greek Shipowners (UGS) has been a vocal critic of the sulphur rules – and has received backing relating to several key issues from other industry bodies, including Intercargo – Mr Plakiotakis’ comments mark a significant escalation from the lobby realm to ministerial level.
“We need to ensure global availability of compliant fuels and resolve all issues related to compliance, quality and safety requirements to alleviate the concerns of the international maritime community,” Mr Plakiotakis told the Shanghai audience.
“From our side, we are moving towards ensuring – through legislation – the full compliance of the bunker industry to the new requirements,” he said.
Agreement with the Greek arguments is often privately expressed in the corridors of the IMO on Victoria Embankment in London and at forums elsewhere, but this has not always been reflected in the public position taken by officials from countries and organisations.
Speaking to Lloyd’s List in an interview published last month, UGS president Theodore Veniamis said: “Some countries need to raise their voices now, at the very next opportunity. We need to wake up some of our colleagues and some other states before it is too late. The way we are headed, they are going to make the biggest mistake of their lives.”
While Mr Plakiotakis’ address may win him some industry support, Greece realistically has few options left to influence any last-minute changes to the 2020 sulphur rules at the IMO. While rumours have circulated that Greece hasn’t entirely given up on a last-ditch “pragmatic” softening of the introduction of the sulphur cap, there is no forum left in the IMO calendar to address such issues before implementation of the rule on January 1.
Container freight rates rise in the run up to new IMO 2020 low sulphur fuel rule
CONTAINER spot freight rates on mainline Asia-Europe and trans-Pacific services surged by 12-30 per cent at the end of October after shipping lines introduced general rate increases (GRIs) on November 1.
Shippers should brace themselves for more hikes in the coming weeks, warned London-based maritime research consultancy Drewry.
The Freightos Baltic China/East Asia to North America west coast 40-foot container index was up 9.5 per cent week on week to reach US$1,529 per (FEU) on November 10, reported American Shipper.
And, while freight rates from China/East Asia to the North America east coast made only a marginal gain over the week, the Freightos Baltic China/East Asia to North Europe 40-foot container index rose by 4.71 per cent week on week to $1,467 per FEU on November 10.
Likewise, Drewry’s World Container Index – a composite of eight major east-west trades – has risen $210 in the last two weeks, helping carriers recoup losses endured over the previous two months.
Drewry predicts that freight rates will rise further, arguing that capacity reductions by carriers and higher bunker surcharges as IMO 2020 low sulphur fuels are phased in will continue to drive rate inflation on the key Asia-Europe and trans-Pacific trades.
“Volumes were moribund in the third quarter peak season and judging by the continued heavy use of void sailings by carriers, that situation hasn’t changed dramatically,” Drewry was cited as saying. “Instead, it is changes on the supply side that are driving the upward momentum.”
The idle global containership fleet swelled to one million TEU, equivalent to 4.5 per cent of the total cellular fleet, as of the first week of November.
“That represents an extra 400,000 TEU added to the inactive fleet in one month, which can be attributed to more ships being sent to dry-dock for exhaust scrubbers in readiness for the new IMO 2020 low sulphur fuel regulations,” said Drewry.
The maritime consultancy believes that demand is now strong enough to ensure that capacity cuts translate into “more positive utilisation and freight rates.”
Adding to the inflationary momentum is the fact that ocean liners are beginning to transition to higher new bunker surcharges related to IMO 2020.
“This process is expected to ramp up for December and should contribute to a strong end to the year for carriers,” noted Drewry.
“While carriers will welcome the upturn in prices, they will also be mindful that it is slightly illusionary as it required a substantial – and temporary – removal of tonnage and a costly new fuel regulation to achieve,” concluded Drewry.
“Freight rates will continue to rise on account of higher bunker surcharges, but for carriers the true measure of success will be whether or not they rise sufficiently to cover the additional costs.”
Lloyd’s List-More carriers add transitional fuel charges by James Baker, Friday, 8 November 2019
The low-sulphur surcharge, effective from December 1, has been calculated using the price difference between high-sulphur fuel and low-sulphur fuel average prices in October.
The “retained value” is $200 per tonne, which is then multiplied by trade coefficient, and will apply to all contracts with validity up to three months, CMA CGM said in a customer advisory.
Lloyd’s List-Real balances in fuel market may remain unclear until mid-2020 by Anastassios Adamopoulos, Friday, 8 November 2019
There will be enough product available globally for shipping companies to comply with the 2020 sulphur cap, Minerva Bunkering chief executive Tyler Baron said. But added costs and different quality of the fuels adds a certain degree of complexity. Amidst these uncertainties, he also expects trading credit to be squeezed during the transition to 2020
ASIA PACIFIC: SINGAPORE LAUNCHES NEW BUNKER MFM STANDARD TO SUPPORT IMO 2020 TRANSITION – Bunkerspot
The Singapore Standards Council has launched a new Singapore Standard SS 6481 – Code of Practice for Bunker Mass Flow Metering (MFM), which it says will ‘enhance the operational aspects for MFM bunkering and support the changing needs of the bunker industry as it transits to a low sulphur fuel oil regime in January 2020’.
ASIA PACIFIC: CHINESE OIL PRODUCTION SET FOR UPSWING – Bunkerspot
China’s fuel oil production will hit 550,000 barrels a day (b/d) by early 2020 as the country takes advantage of the chance to target higher exports of low sulphur fuel oil (LSFO), says fuel analyst ESAI Energy LLC.
GLOBAL: EYES IN THE SKY FOR ECA COMPLIANCE – Bunkerspot
A new study by UK-based researchers has demonstrated how satellite tracking could help to monitor ships’ compliance with sulphur emission regulations.
SEA NEWS -NYK back in black after posting first-half profit of US$146.7 million Thursday, 7 November 2019
JAPAN’s leading ocean carrier, Nippon Yusen Kabushiki Kaisha (NYK) was back in the black with a first-half profit of JPY15.8 billion (US$146.7 million), after suffering a year-on-year 2018 net loss of JPY4.2 billion. First half revenues came in at JPY824.7 billion. down 9.9 percent.
Marinelink-Fuel Spread for 32 Ports on BIMCO Website by Michelle Howard, Thursday, 7 November 2019
BIMCO members can now monitor the price spread between Marine Gas Oil Low Sulphur and 380 centistoke High Sulphur Fuel Oil in 32 different ports around the world with daily information supplied by MABUX.
VPO-Satellite tracking shows the relationship between ship emissions and cloud patterns, Thursday, 7 November 2019
A ground-breaking study by UCL Energy Institute, Imperial College and the University of Oxford shows how matching the movement of ships to the changes in clouds caused by their emissions could be used to help monitor compliance with the IMO 0.5 percent sulphur emission regulation.In the latest study, satellite tracking was used to show how the impact of ships on clouds largely disappears in Emission Control Areas (ECA) zones, where ships’ sulphur oxides (SOx) emissions is limited to 0.1 percent.
SEA NEWS – CMA CGM levies US$200/ton low sulphur surcharge from December, Thursday, 7 November 2019
FRENCH shipping giant CMA CGM has introduced a low sulphur surcharge from December 1 to cover the increase in fuel-related costs associated with the implementation of the United Nations’ IMO 2020 regulation. The surcharge has been calculated using the price difference between high sulphur fuel and low sulphur fuel average prices of October. A previous announcement related to calculation, the retained value is US$200 per ton, which is multiplied by the trade coefficient.
WORLD CARGO NEWS – IMO 2020 could spark greater service differentiation by WCN Editorial, Thursday, 7 November 2019
The consultancy Alphaliner thinks the upcoming cap on the sulphur content in bunkers, could lead to a greater differentiation of services in the liner sector. Addressing delegates at Intermodal Europe 2019, Verberckmoes, described moves by CMA CGM to propel several of its ultra-large container vessels with LNG as a bold move. “The company has started taking delivery of this tonnage and it will have 20 vessels in service by 2022. Its move is supported by a bunker supply deal with Total Marine Fuels Global Solutions and a charter deal with Mitsui OSK Line for a bunker ship.”
SEA NEWS – Debate over scrubber usage to clean marine fuel emissions continues Thursday, 7 November 2019
Over the years the shipping industry has been rapidly improving in the area of sustainable development, with nearly all its emissions to air and discharges to sea now being regulated, and owners, operators and technology firms working on a range of solutions to take shipping to a new level of sustainability.
SPLASH – Fuel transition charges flood in by Sam Chambers, Thursday, 7 November 2019
Containerlines are following Hapag-Lloyd’s lead in bringing in low sulphur fuel surcharges for spot cargoes to go alongside already communicated longer term charges to handle the global sulphur cap.Late last month the German boxline outlined that from December 1, a new IMO 2020 Transition Charge (ITC) will kick in, valid until further notice, with customers charged an extra $135 per teu on Asia-Europe, $130 on the transpacific and $80 on intra-Asia trades.
SPLASH – British scientists to track down sulphur cap cheats by peering into the clouds by Sam Chambers Wednesday, 6 November 2019
British researchers have developed a method to track down ships flouting the sulphur cap next year by watching clouds. The study, published today in Geophysical Research Letters, was led by researchers from Imperial College London, together with University College London and the University of Oxford.
SHIP INSIGHT – A new report from the Mission to Seafarers shows increased positivity and satisfaction among those working at sea by Paul Gunton, 5 November 2019
The impending IMO 2020 sulphur cap appears to be a source of stress for many seafarers. The report indicates that there is a widespread fear of blame for non-compliance, suggesting that some seafarers don’t feel prepared for the cap, which comes into effect in the New Year. Many participants reported concerns that discrepancies in data, in addition to tougher inspection regimes, could result in seafarers facing prosecution by authorities.
While there has been much attention given to the financial impact of IMO 2020 on shipowners, this evidence shines a light on the day-to-day pressures on those serving at sea and the need for governments and shipowners to prepare seafarers for the change. The report indicates that the companies investing more resources into training have happier crews – highlighting the importance of seafarers feeling confident in their own abilities and with the responsibilities placed upon them by new regulations.
BUNKERSPOT – EUROPE: NESTE ROLLS OUT 0.50% SULPHUR MARINE FUEL TO GERMAN MARKET
Under the terms of a distribution and sales agreement with German bunker supplier BMT Bunker und Mineralöltransport GmbH, the Finnish refiner’s IMO 2020-compliant Neste Marine 0.50 fuel is now available in Bremerhaven.
SHIPINSIGHT-2020 sulphur rules driving tanker freight rate rise by Malcolm Latarche , Monday, 4 November 2019
In its weekly analysis, Poten says because only a small percentage of ships will have scrubbers by the start of the year, the freight rates will, at least initially, be driven by ships without scrubbers, burning more expensive low-sulphur fuel.
To examine the impact of the more expensive fuel, Poten compared the freight rates (in $/tonne) using the average HFO (Heavy Fuel Oil) and MGO (Marine Gas Oil) prices in 2019 with freight rates calculated using the average prices of MGO and Very Low Sulphur Fuel Oil (VLSFO) using the 2020 forward prices.
SHIPINSSIHT- 2020 enforcement: are we ready? by Paul Gunton, Monday, 4 November 2019
I recently wrote about the concerns expressed by a marine engineer about the impact that low sulphur fuels will have on his shipboard colleagues (23 October). He had been speaking at an IMO Symposium on IMO 2020 and Alternative Fuels on 17 October and you can find all the presentations and audio recordings of the 1.5-day event on IMO’s website.
I am returning to that event now because of our report on 29 October that Russia is considering postponing its adoption of the new fuel standard for its domestic shipping, which would also apply to the other four members of the Eurasian Economic Union.
SPLASH-Platts launches scrubber index for bulkers by Sam Chambers, Monday, 4 November 2019
S&P Global Platts is now publishing time charter equivalent (TCE) assessments basis 0.5% sulphur bunker fuel for scrubber-fitted and non-scrubber dry bulk ships covering capesizes, panamaxes, ultramaxes and supramaxes.
The new TCE assessments are calculated using daily 0.5% delivered bunker prices published by Platts. The vessel speed and consumption used in these TCE calculations were derived by extensive market survey and reflect market practice for vessels using low sulphur fuel.
SHIPANDBUNKER -Ship We’re ready for 2020, says new physical black sea bunker suppler
by Ship &Bunker news Team, Monday, 4 November 2019
A new physical bunker supplier has entered the Black Sea market, and Millennial Energy says it sees the upcoming IMO2020 sulfur cap as an opportunity to bring more than just compliant fuel to the region.
Shipping Watch – Maersk announces sulfur surcharge on short-term contracts
by Tomas Kristiansen,Friday,1 November 2019
Maersk just informed its customers of the size of its sulphur surcharges on contracts lasting up to three months, after the company calculated the difference between high- and low-sulphur fuel. See the price of the surcharges on five main routes
SHIPANDBUNKER -Feature: Add (Calorific) Value to your Bunker Buying.
by Alok Sharma, Senior Vice President ,Inatech ,Friday,1 November 2019
Buying bunkers should be about more than just price. Particularly now, as alternative fuels and blends are coming onto the market to meet the demands of the post-2020 fuel landscape, it is essential to know what you are putting into your ship’s tanks. What matters is not just the fuel’s quantity and price: its energy content is also important and becoming more so. In response, the traditional way of doing business needs to change, and is changing.
WKZO-U.S. shipping sanctions to dent demand for dirty shipping fuel: Refinitiv
by Noah Browning, Tuesday, 29 October 2019
LONDON (Reuters) – U.S. sanctions on a top Chinese shipping fleet is set to produce a totally unintended result — less burning of the dirtiest marine fuels at sea at the start of next year, Refinitiv data showed on Tuesday. The move to blacklist ships from COSCO on Sept. 24 for allegedly ferrying sanctioned Iranian oil will undercut demand for ships’ traditional means of power because a vessel crunch meant fewer docked and attached kit to filter the dirtier fuels.
MARINELINK-ExxonMobil Talks With Teekay Ahead of IMO 2020
by Michelle Howard, Tuesday, 29 October 2019
Starting from January 1, 2020, vessel operators will need to use a compliant fuel, or have a scrubber fitted if they wish to continue burning high-sulphur fuel oil. This ruling does not affect Emission Control Areas (ECAs), where a 0.10% sulphur fuel is still required.
SPLASH-Washwater monitoring: to be or not to be? Tuesday, 29 October 2019
Rivertrace’s Graham North on a vital addendum to the scrubber debate. The global sulphur cap is just around the corner, but of course we all know that. Talk of this hard-hitting, change-inducing regulation has dominated industry airwaves since the culmination of more than 30 years of swirling debate at the IMO came down to the ….
SUNNEWSONLINE-Nigerian shippers to pay more as IMO sulphur deadline draws near Monday, 28 October 2019
As the deadline for the enforcement of the new International Maritime Organisation 2020 Low Sulphur Regulation (LSR), which will force shipping liners to reduce their sulphur emissions by 85 per cent, draws, some foreign shipping companies have started notifying their Nigerian customers that the new fuel regime may jerk up cost of shipping starting from December 1, 2019.
SPLASH-Ships slow down as higher fuel bills loom by Sam Chambers, Monday, 28 October 2019
Ships are slowing down as the global sulphur cap approaches.“ With the premium for VLSFO over HFO currently projected at c.$240/t across 2020, the industry fuel bill is set to rise, and speed again could be critical to the potential mitigation of increased fuel bills,” Clarkson Research Services noted in its most recent weekly report. Average speeds in some sectors are already down in the year to date, containerships by a 2% and bulkers by 1%.
Lloyd’s Loading List – Carriers need to develop greener supply chains to meet IMO 2020 cost by James Baker, Monday, 28 October 2019
With the cost of compliance to new low-sulphur regulations set to top $10bn in the first year alone, box lines need to pass through the expense. But if presented correctly, they could use IMO 2020 to offer differentiated services. More
Marinelink Floating -Storage for IMO 2020 Fuel builds in Asia by Roslan Khasawneh, Friday, 25 October 2019
Stockpiles of low-sulphur marine fuels held in floating storage around the Singapore trading and pricing hub are steadily growing ahead of a 2020 global deadline for rules that have shaken the global oil refining and shipping industries.
SHIP AND BUNKER–Interview: Glander International Bunkering Talks Bunker Traders & IMO2020
by Ship &Bunker news Team, Friday, 25 October 2019
Bunker traders today are not only very much alive and well but responsible for at least a third of global bunker sales, according to data from 2020 Marine Energy. And while it is true that in recent years margins have been heavily eroded and operating conditions far tougher than they were in the traders’ heyday, others see 2020 as just as just another factor driving as a continuous evolution of the bunker trading model.
BUNKERSPOT–EUROPE: Russia reportedly mulling delay in IMO 2020 adoption
Russian authorities may be looking to postpone the full imposition of IMO 2020 sulphur regulations, according to Bloomberg. (Subscription required)