News Round Up – updated 30 March

News Round Up – updated 30 March

11 varied articles below featuring Sulphur 2020 – from availability to impact of Covid-19

Ship and Bunker – IMO Reports Show Sharp Drop in VLSFO Shortages

Non-availability of VLSFO is coming down – just six FONARs were filed to the IMO in February down from 42 in January.


Tradewinds – Scrubber payback pushed out to four years as spread narrows again

Clarksons Platou Securities says difference between high and low sulphur fuel now only $75.

The spread between bunker fuel with 3.5-percent and 0.5-percent sulfur is now down to USD 75. This increases the payback time on a scrubber to three to four years, writes Clarksons.


Shipping Watch – Oil collapse and pandemic could prove dangerous cocktail to container lines

The low oil price could cause shipping companies to postpone scrubber installations, thereby increasing the capacity of the global fleet at a time when the global pandemic is expected to lower demand significantly, assesses Sea-Intelligence.


Container Management – MSC blames virus-related scrubber delays for IMO 2020 violation

Following the one-year ban of the MSC Joanna from UAE waters for breaching the International Maritime Organization’s (IMO) rules on high sulphur fuel oil (HSFO), MSC has explained that shipyard backlogs resulting from the coronavirus outbreak have delayed scrubber installations.

The UAE’s Federal Transport Authority stated that the ship, which has a capacity of  9,784 teu, was carrying 700 tonnes of HSFO when it called at Jebel Ali port earlier in March.

However it stated: “Many of the shipyards where EGCS installation has been taking place are in areas affected by the current COVID-19 pandemic and this has generated a large backlog of installations for shipowners.

“In particular, Chinese shipyards were closed or partially closed for a significant period of time following the extended Lunar New Year holiday as the country grappled with the new coronavirus outbreak. This has impacted shipowners’ schedules for retrofitting ships, as has been widely documented in the media.”

The shipping line acknowledged that the MSC JOANNA is one of those ships which has been subject to an EGCS delay and its installation is currently scheduled for June 2020.

Ship and Bunker – Taiwan to Introduce Universal 0.50% Sulfur Bunker Limit From July

Taiwan will source its very low sulfur fuel oil from producers CNPC and Formosa Plastics.

Ship and Bunker – Bangladesh to import cleaner 0.005% sulfur gasoil from July 2020

Bangladesh will start importing 0.005% sulfur gasoil, instead of the existing 0.05% sulfur gasoil, from July 2020 in a bid to ensure a cleaner environment, Bangladesh Petroleum Corporation, or BPC, chairman Md Shamsur Rahman told S&P Global Platts on Monday (23rd).

 2 Articles in full below:
Hong Kong Shipping Daily – full article Suspension of cruise sector’s massive fuel use boosts scrubbers

THE suspension of cruise ship deployments means a sudden fall in demand for heavy fuel oil, depressing its price, and giving a boost to scrubbers, reports New York’s FreightWaves.

Cruise ships, unlike cargo ships, are voracious consumers of fuel, not only to get from A to B, but to power their massive hotel superstructures.

For example, a 10,000-TEUer sailing at 16 knots consumes 100 tons of fuel a day. Assuming 250 days at sea per year, its annual consumption would be 25,000 tons. The cruise industry’s consumption is the equivalent of three hundred 10,000-TEU ships.

Similarly, a 180,000-ton capesize bulker that burns 47 tons of fuel a day and is at sea for 300 days a year would consume 14,100 tons annually. The cruise industry consumes the equivalent of 530 capesizes.

The sudden end of cruise itineraries due to coronavirus has reduced global demand for both 3.5 per cent sulphur heavy fuel oil (HFO) and 0.1 per cent sulphur marine gasoil (MGO).

This, in turn, could affect the bottom lines of commercial ships, particularly those with exhaust-gas scrubbers.

Carnival Corporation owns 105 vessels under Carnival Cruise Lines, Princess Cruises, Holland America Lines, P&O Cruises, Cunard Line, Costa Cruises, AIDA Cruises and Seabourn Cruises.

Its ships consume 3.312 million tons of marine fuel a year at a total cost of US$1.562 billion, and the company expected to consume 3.405 million tons of fuel a year.

The IMO 2020 rule requires all ships without exhaust-gas scrubbers to consume either MGO or 0.5 per cent fuel known as very low sulphur fuel oil (VLSFO); those with scrubbers can still burn HFO.

Putting their individual estimates together, the US-listed cruise owners had been on track to consume a combined 5.8 million tons of fuel this year. On a pro rata basis, this implies that the entire global fleet would have consumed around 7.5 million tons.

The halt to cruise deployments will translate into an abrupt reduction in demand for heavy fuel oil, but not for very low sulphur fuel oil (VLSFO) because cruising favours marine gas oil (MGO) over VLSFO, giving a tailwind for the VLSFO-HFO spread, a plus for cargo ships with scrubbers.

Goldman Sachs: American GDP will shrink 24pc in second quarter

ECONOMISTS at Goldman Sachs are now forecasting a staggering 24 per cent decline in US GDP in the second quarter, reports Copenhagen’s Sea-Intelligence.

US business inventories are expected to be 10 per cent larger than just before the financial crisis when compared to the magnitude of sales, said the report.

During the financial crisis, inventories were reduced 18 per cent. Restrictions are now being implemented in ports, with a few even banning vessels if they have been in virus affected countries or shutting down when they find workers testing positive, it said.

An oil price war drastically lowers carriers?costs as well as generates a positive cash flow effect. However, it also seriously undermines the investment case for scrubbers – we have seen the low-sulphur premium drop from a peak around US$300 per ton at the start of the year down to $60 per ton.

At the same time, scrubber installations are seriously delayed in China due to the virus. The consequence might well be that vessels which were otherwise planned to go for scrubber installation instead re-enter the operational fleet. This would add more capacity to a situation where

Bunker World – Taiwan sets 0.5% sulfur cap on marine fuels for domestic ships from July

The Environmental Protection Administration of Taiwan will tighten its sulfur cap from 3.5% to 0.5% effective July 1, 2020 for all marine fuels on vessels in Taiwanese waters, bringing it fully in line with international standards, an EPA official said Tuesday.

Ship and Bunker – Containerships Completed Scrubber Retrofits by Mid-February

The remaining 58 vessels in its fleet have switched to low-sulfur fuels to comply with IMO 2020.


Tanker Shipping and Trade – As crude oil price reaches historical lows, Guyana’s first VLCC loads

Guyana’s first export by VLCC will have little impact in the current global market awash with cheap crude oil, but once the OPEC cartel and Russia return to their former pricing strategies, Guyana’s light low sulphur crude oil may prove popular.

Tanker Operator – History’s largest oil glut months away from topping world storage while tanker freight rates explode

The largest oil supply surplus the world has ever seen in a single quarter is about to hit the global market from April, creating an imbalance of around 10 million barrels per day (bpd).

An exclusive Rystad Energy analysis shows global storage infrastructure is in trouble and will be unable to take more crude and products in just a few months.

Bunker World 2 articles:

Singapore middle distillate stocks swell to 6-month high as gasoil imports double

Singapore middle distillates stocks have ballooned to hit a six-month high after gasoil inflows more than doubled in the week ended March 19-25, Enterprise Singapore data released late Thursday showed.

India lockdown: Weak demand to hurt bunker industry; LSFO prices fall 15%

India’s bunker prices have declined sharply by as much as 15% due to a slump in demand as the country grapples with the deadly coronavirus pandemic by imposing a nationwide lockdown including ports.

News Round Up:  22- 30 March

News Round Up: 22- 30 March

Shippingwatch: MSC accused of illegally carrying heavy diesel on board a ship

Container line MSC is accused by the United Arab Emirates of illegally carrying heavy diesel on board one of its ships that is only allowed to sail on low-sulfur fuel. MSC argues that the oil was to be used for a test.


Splash 24/7: Fuel price spread plummets to as low as $62 per tonne

Latest data from Ship&Bunker shows the average price spread between high and low sulphur fuel oil at the world’s 20 largest bunkering hubs stands at just $86 per tonne, putting scrubber investments into sharp focus. In some ports the figures are even more narrow with Fujairah having a price spread yesterday of just $64 per […]


Lloyd’s Loading List: UAE bans MSC boxship for a year over sulphur cap violations

In what could be one of the first penalisations relating the HSFO carriage ban that came into effect earlier this month, the United Arab Emirates has banned an MSC containership and will take legal action against its master for violating the rules


Bunkerspot: ASIA PACIFIC: Sinopec refinery begins VLSFO production

The Guangzhou refinery has delivered its first cargo of very low sulphur fuel oil.

Bunkerspot: GLOBAL: Talusia Universal lube oil receives NOL from WinGD

Total Lubmarine’s Talusia Universal (BN57) has received a No Objection Letter from WinGD for all fuels – liquid and gas – with a sulphur content between 0.00% – 1.50%.


Lloyd’s Loading List: IMO 2020 + Covid-19 = 0

Coronavirus-driven fall in oil prices has reversed the expected extra costs for container lines and their customers of this year’s new low-sulphur fuel rules, highlights Drewry Supply Chain Advisors


VPO: Effects of LSFO on cylinder condition shown 3 months after IMO 2020 implementation

The global 0.5 per cent sulphur cap has been in operation for nearly three months. The effects of low sulphur fuel oil (LSFO) and very low sulphur fuel oil (VLSFO) on cylinder condition compared with conventional high sulphur fuel oil (HSFO) are coming to light with preliminary field experiences showing issues associated with the fuel changeover.


News Update 16-21 March

News Update 16-21 March

News Round Up 16 March 2020

Lloyd’s List: Scrubber economics disrupted by coronavirus and Opec plus-stoked oil slide

“If the current very low sulphur fuel oil to high-sulphur fuel oil price spread continues for another six months or more, scrubber fittings will prove to be a wrong bet for shipowners,” said one senior dry bulk shipping executive.


Hong Kong Shipping Gazette – News story in full – Ships skip JNPT due to virus outbreak and scrubber retrofits

JAWAHARLAL Nehru Port Trust (JNPT) has reported that some mainline containerships as well as feeders are skipping calls at the facility on account of the coronavirus outbreak, as well as the effects of IMO 2020 removing vessels from service for scrubber retrofits to lower maritime fuel emissions.

Gateway Terminals India (GTI), one of the five terminals operating at JNPT, has reported four “skips” already, reported Seatrade Maritime News, Colchester, UK.

“GTI has told us that some more vessels may skip the port in coming months as they undergo scrubber retrofits to comply with the rule on using low-sulphur fuel oil,” said JNPT chairman Sanjay Sethi.

These issues could hurt JNPT’s ability to handle more containers in the financial year due to end on March 31 this year, than it did in fiscal 2018-19. The port handled 4.63 million TEU between April 2019 and February 2020, down from the 4.67 million TEU processed during the same period in FY2018-19. For the full FY19, JNPT handled 5.13 million TEU.


Bunker Spot GLOBAL: IMO expects 77% drop in ships’ SOx emissions as a result of 0.50% cap

The International Maritime Organization expects that the new 0.50% global sulphur cap will mean a 77% drop in overall SOx emissions from ships and the big shipping associations are ‘cautiously optimistic’ about the industry’s ability to cope with the regulations, according to a statement issued by BIMCO.


Splash 24/7: Bunker price spread edges into double-digit territory

The average price spread between low and high sulphur fuel at the world’s four largest bunkering hubs ducked into double-digit territory for the first time today. Bunker prices continued to decline today, although not in the sensational manner they fell back on Monday where prices fell by record numbers.

Vessel Performance News: ICS reminds shipowners of carriage ban on non-compliant fuel

Port state control authorities will begin to enforce the IMO’s 2020 sulphur cap from March 1, making it an offence for ships to carry fuel that contains a sulphur content higher than 0.5 per cent unless the ship has an exhaust gas cleaning system (EGCS).


Lloyd’s List: US imports of Russian oil exceed Saudi shipments

US refineries are taking advantage of the IMO 2020 global fuel oil regulations to secure heavily discounted high-sulphur fuel oil and then use it to produce middle distillates and gasoline at higher margins.

Lloyd’s List: The week in charts: Freight prices jump, sulphur-fuel spread contracts

Ocean freight spot prices from Rotterdam to Shanghai rose 24% in the past week, 45% higher than for the same period last year. Meanwhile, the spread between high and lower sulphur marine fuel oil is contracting, which has slashed earnings premiums for scrubber-fitted vessels.

Lloyd’s List: IMO sulphur cap highlights OW Bunker collapse lessons

Assessing counterparty risk remains one of the better protective steps that can be taken, as is checking supplier contracts and seeking to renegotiate them.

S&P Global: HSFO crack trades above minus $10/b for first time since July

High sulphur fuel oil cracks traded above minus $10/b during European trade Monday for the first time in eight months, as limited production and sustained demand for HSFO outside the bunker pool kept prices relatively buoyant.


Bunkerspot Global: ASIA PACIFIC: Sinopec refinery begins VLSFO production
The Guangzhou refinery has delivered its first cargo of very low sulphur fuel oil.



News Update 3-9 March 2020

green ship © Elnur

Schiebel Camcopter S-100 Impresses at Sulphur Sniffer Test

Schiebel, together with partner Nordic Unmanned, successfully completed a two-day test of its sniffer capability on board the CAMCOPTER® S-100 UAS in the shipping lane outside Gniben, Denmark.

Ships operating in Europe’s busiest sea routes are permitted to emit exhaust fumes with a sulphur oxide content limited to no more than 0.1 percent. Full text here

Podcasts: S&P Global Platts refined oil products experts Atsuko Kawasaki, Amy Tan, and Rajesh Nair examine the rapidly changing fortunes of the Asian Marine Fuel 0.5% market, which has seen a fundamental shift since International Maritime Organization’s mandate to limit sulfur in marine fuels to a maximum of 0.5% kicked off from the start of the year.



Lloyd’s List – US imports of Russian oil exceed Saudi shipments

US refineries are taking advantage of the IMO 2020 global fuel oil regulations to secure heavily discounted high-sulphur fuel oil and then use it to produce middle distillates and gasoline at higher margins more


As OPEC and non-OPEC producers meet in Vienna today to give their verdict on a proposed further 1.5 million barrels per day cut in oil production aimed at halting the relentless slide in crude oil prices, there has been some volatility this week in marine gasoil and very low sulphur fuel oil prices in the key global bunker ports but trends in differentials between these grades are beginning to appear. More

Tanker Operator – Shipowners and operators could face detention of ships from 1st March under IMO rule

Port state control authorities will begin to enforce the IMO’s Sulphur 2020 from 1st March, making it an offense for ships to carry fuel that contains a sulphur content higher than 0.5 percent unless the ship has an Exhaust Gas Cleaning System.

The International Chamber of Shipping reminds shipowners and operators of the impending ban and reiterates the fact that any ships found to be non-compliant face the prospect of detention. More

Bunkerworld – Gazprom Neft boosts IMO 2020-compliant marine fuel sales by 47% in 2019

Russian oil major Gazprom Neft sold around 350,000 mt of IMO 2020-compliant marine fuel in 2019, about 47% higher than 2018’s level, the company said in a press release. subscription

Ship Insights – IMO 2020: lubricants take centre stage in a sulphur-constrained era

The entry into force of the Global Sulphur Cap on January 1st catalysed a monumental shift in the types of fuel bunkered by the international shipping fleet. Since the start of this year, an industry that was once heavily reliant on one type of fuel and one type of cylinder oil lubricant, had to adjust to burning new types of fuel with squeezed sulphur content and selecting the right lubricant became more vital than ever before.

Although a small percentage of ships have continued to bunker heavy fuel oil (HSFO), by using a scrubber, in the first few months of this year the vast majority of ships bunkered low sulphur fuel oil (LSFO) blends and distillates such as marine gas oil (MGO). More


Non-compliance with the new IMO limits will result in heavy penalties and the blocking of the offending ship in port.

The XRF Analyser (manufactured by Parker / Kittiwake) has the ability to check the sulphur content of fuel oil on board in just 130 seconds. It helps shipping companies and ship operators to ensure compliance with the latest IMO regulations (regulation 14, annex VI of the MARPOL Convention). More

Shipping and Freight Resources – IMO Carriage Ban comes into effect and 5 beneficial changes of IMO2020

The much reported MARPOL Annex VI regulation (a.k.a IMO2020) which was implemented to lower the current global limit for sulphur content of marine fuels from 3.50% to 0.50% came into effect on 1st January 2020..

As of 1st March 2020, the complementary International Convention for the Prevention of Pollution form ships (MARPOL) amendment (Carriage Ban) came into effect..

The IMO Carriage Ban prohibits the carriage of non-compliant fuel oil for combustion purposes for propulsion or operation on board a ship – unless the ship has an approved exhaust gas cleaning system (“scrubber”) fitted. More

Lloyd’s List – Are VLSFOs really that bad for the climate?

Supporters of very low sulphur fuel oil blends were rocked recently by a study suggesting these fuel types posed a significant environmental risk. Non-governmental organisations then lined up to call for a ban on them. BIMCO, however, thinks the study relied on parameters that were too narrow. It thinks more tests need to be done more

Bunkerworld – Asia bunker markets mostly unfazed by IMO carriage ban, concerns linger

A trader in Hong Kong said “there were more debunkering requests in January, [but] this month [it’s] getting less.” More subscription required

The Loadstar – Battle to ban scrubbers heats up, despite claims of even lower-sulphur results

Scrubbers are removing more sulphur from exhaust gas emissions than actually required by the IMO 2020 sulphur cap regulations, according to the Clean Shipping Alliance (CSA) ship operator members.

Moreover, the CSA members said, “despite initial installation problems” there had been “little in the way of mechanical breakdown, corrosion or non-compliant operation”.

Addressing delegates during the recent CSA 2020 event in London, multipurpose vessel operator Spliethoff’s technical director, Arne Hubregtse, said: “We have not had any major problems.” full story here

Sulphur 2020 – News round-up – 25 Feb – 2 March

IMO 2020 everything you need to know


BIMCO, ICS, INTERCARGO and INTERTANKO are calling on fleet- and vessel managers, as well as technical superintendents, to share their insight and experiences with the new IMO 2020 compliant fuels by taking part in a new online survey.

The big four shipping associations are asking participants to answer 13 questions about their experiences with fuel oil quality since the change to 0.50% sulphur compliant fuel oils.

In a statement issued today (25 February), the associations said: ‘The survey’s main focus is on problematic properties of the IMO 2020 compliant fuel oil that may lead to problems such as increased sludge discharge, clogging of fuel pipes, preheaters, fuel separators and fuel filters, fuel pumps getting stuck, problems with fuel injection and poor ignition of fuel oil. It also focuses on other issues regarding incomplete combustion, wax appearance and increased wear and tear of cylinder liners; all problems that in the end may lead to loss of propulsion and/or black out.’

The survey can be accessed via the following link


Air pollution-busting ship fuel in climate backlash – Euractiv

New rules aimed at reducing air pollution from shipping may worsen the sector’s climate impact, according to new research, which warns that low sulphur fuels could end up producing more climate-bashing emissions, known as black carbon.

On 1 January, International Maritime Organisation (IMO) rules came into force, lowering the legal sulphur limit of boat fuel from 3.5% to just 0.5%, in a bid to improve air quality and reduce the causes of acid rain.

But new figures submitted to the IMO by Finland and Germany, ahead of an annual meeting of its pollution prevention committee meeting in February, warn that the tweaked fuels have the potential to do serious climate harm.

According to the study, the hybrid fuels tested contained between 70% and 95% more aromatic compounds, which led to 10% to 85% more BC compared to standard heavy fuel oil (HFO), a widely used shipping fuel.

Lloyd’s List –  IMO urged to consider market-based measures for emissions

Economic incentives have been a controversial topic for governments previously. But with increasing industry acceptance that eventually they will be necessary, will the IMO manage to agree to one? The UK wants fellow governments to think about that prospect – subscription required

World Fuel Services expects to move more low sulphur fuel – Tradewinds

World Fuel Services expects the majority of the marine fuel it supplies in the first quarter to be of the IMO 2020 compliant variety. The Miami company’s finance chief Iran Birns said Thursday that, come quarter-end, the fuel provider’s bunker sales will be 85% low sulphur fuel or marine gasoil, up from 55% in the fourth quarter before the global emissions regulations kicked in.

NWE VLSFO premium over HSFO slumps to six-month low – Bunkerworld

Ample availability of VLSFO adds to dampened shipping demand from the coronavirus outbreak. S&P Platts Bunkerworld subscription required

Listen: Post-IMO 2020: Asia Marine Fuel 0.5% valuations on a roller-coaster ride  – SP & Platts

S&P Global Platts refined oil products experts Atsuko Kawasaki, Amy Tan, and Rajesh Nair examine the rapidly changing fortunes of the Asian Marine Fuel 0.5% market, which has seen a fundamental shift since International Maritime Organization’s mandate to limit sulfur in marine fuels to a maximum of 0.5% kicked off from the start of the year.


BIMCO’s Chief Shipping Analyst Peter Sand reports that the higher fuel costs associated with low sulphur fuels have taken their toll on dry bulk sector earnings. In an analysis of the dry bulk market posted on the BIMCO website yesterday (26 February), Sand noted that fuel costs have significantly risen since the 2020 sulphur cap was implemented. Sand commented: ‘The steep drop in earnings illustrates that passing on the extra fuel cost has been near-impossible to implement on voyage charters.’

In comparison, Sand highlights that earnings on scrubber-fitted vessels remain higher because of the lower cost of high sulphur fuel.

Sinopec QiLu Petrochemical delivers first batch of low sulphur fuel – Seatrade

Sinopec QiLu Petrochemical Company has delivered its first batch of low sulphur marine heavy fuel oil to Bingang liquid chemical terminal at Longkou port in Shandong.

The company started the research and development of low sulphur marine heavy fuel oil in 2017 and successfully produced the low sulphur marine heavy fuel oil product at the end of 2019 in time for IMO 2020 coming into force.

Hafnia says low-sulphur fuels help sustainability – Lloyd’s List

Hafnia, one of the largest product tanker companies, said low sulphur fuels is a sustainable choice. It posted a surge in profits in the fourth quarter

Royal Arctic Line CEO wants heavy fuel ban pushed back to 2040 – Shipping Watch

A coming ban on sailing with high-sulfur fuel oil in the Arctic should not come into force until 2040, says Royal Arctic Line CEO Verner Hammeken. NGOs want the company’s management replaced following the statement.

Are Market Based Measures the most feasible way to limit GHG emissions now? – Seatrade

LNG is basically playing with methane and won’t limit CO2 emissions, open loop scrubbers double the pollution problem with food chain and under water marine life, low-sulphur fuel is limiting sulphur emissions yet wont address black carbon emissions. So, is the industry worst-off because of regulations? Or should the market solve this program via MBMs?

Out of many understandings of MBMs, the Organization for Economic Cooperation & Development (OECD) defines MBMs to address the market failure of ‘Environmental Externalities’ either by incorporating the external cost of production or consumption activities through taxes or charges on processes or products, or by creating property rights and facilitating the establishment of a proxy market for the use of environmental services. MBMs are useful tools for environmental policy making. These measures would give an economic cost to the polluters which can reduce GHG emissions and develop future markets towards a sustainable way.

The Lloyd’s List Podcast: Why the EU won’t wait for IMO on climate change – Lloyd’s List

We have a climate emergency, we can’t wait for the IMO, claims Jutta Paulus, the European Parliament’s maritime emissions rapporteur. This week’s Podcast catches up with the controversial MEP in Brussels to discuss her sweeping proposal. It would effectively force ships to operate under an emissions cap and trade system, increase their carbon intensity performance and contribute to a European maritime decarbonisation fund. “If you wait for consensus, you’ll never get anywhere,” she says. “We need ambitious influencers.”

Maersk to Raise HSFO Bunker Fuel Consumption to 25% – Marine Link

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.

EU committed to introducing CO2 quotas on shipping – Shipping Watch

Despite shipping companies doing everything in their power to avoid it, the European Commission stands firm. CO2 quotas must be imposed on shipping, and the proposal will be introduced in a few months, says top official. The European Parliament widely supports the use of quotas.