News Round Up – 27 April 2020

News Round Up – 27 April 2020

Seatrade: 31 Singapore-flagged vessels report scrubber malfunctions

Singapore-flagged vessels reported 31 scrubber malfunctions as of the end of February 2020.

Releasing figures on IMO 2020 compliance the Maritime & Port Authority of Singapore (MPA), which administers the Singapore Registry of Ships (SRS), said that of the “small number” of Singapore-flagged vessels fitted with scrubbers there were 31 reports of malfunctions as February 29 this year.

https://www.seatrade-maritime.com/ship-operations/31-singapore-flagged-vessels-report-scrubber-malfunctions

Bunkerspot: GLOBAL: Integr8 Fuels: HSFO will remain a feature of the bunker market

High sulphur fuel oil is going to be there for the long haul’ but sound market intelligence and close monitoring of avails and pricing levels will be required, says Steve Christy, Director of Strategic Communications at Integr8 Fuels.

https://www.bunkerspot.com/global/50353-global-integr8-fuels-hsfo-will-remain-a-feature-of-the-bunker-market

Bunkerspot: GLOBAL: VeriFuel releases Q1 2020 fuel quality statistics

Very low sulphur fuel oils accounted for 49% of samples tested by Bureau Veritas VeriFuel in the first quarter of 2020, with the percentage of VLSFOs meeting the 0.50% sulphur limit growing from just under 89% in January to over 95% in March.

https://www.bunkerspot.com/global/50369-global-verifuel-releases-q1-2020-fuel-quality-statistics

Bunkerspot: EUROPE: Southern European ports reflect narrowing high-low sulphur fuel price differential

Bunker prices in five key ports in Southern Europe are, by and large, mirroring the price trends seen at Rotterdam, but with some ports showing an even narrower price differential between high sulphur fuel oil and very low sulphur fuel oil than at the Northern European bunker hub.

https://www.bunkerspot.com/europe/50378-europe-southern-european-ports-reflect-narrowing-high-low-sulphur-fuel-price-differential

Lloyd’s Loading List: Lines under pressure to cut ‘obsolete’ low sulphur surcharges

The crash in crude oil prices and consequent severe reduction in bunker costs is increasing calls from customers for savings to be passed on by carriers

https://www.lloydsloadinglist.com/freight-directory/news/Lines-under-pressure-to-cut-%E2%80%98obsolete%E2%80%99-low-sulphur-surcharges/76435.htm

 

Daily Splash: Singapore detains two vessels for using non-compliant fuel

The Maritime and Port Authority of Singapore (MPA) has reported two vessel detentions for using non-compliant fuel in the first quarter to ensure the implementation of IMO 2020 sulphur regulations. According to the MPA, about 96% of the ships that arrived in the Port of Singapore used compliant fuel in the first quarter, excluding ships […]

https://splash247.com/singapore-detains-two-vessels-for-using-non-compliant-fuel/

Ship and Bunker: Scrubber Economics Under Pressure as Rotterdam HSFO Discount Narrows Below Key $50/MT Barrier

The discount for high Sulphur bunkers in Rotterdam has for the first time narrowed to under $50/mt, a level seen as an important psychological barrier for scrubber economics.

https://shipandbunker.com/news/emea/433053-scrubber-economics-under-pressure-as-rotterdam-hsfo-discount-narrows-below-key-50mt-barrier

Ship and Bunker: VLSFO Price Hits New Low, Bunker Costs Lowest Since 2016

The price of IMO 2020 compliant VLSFO bunkers in the four major bunkering hubs hit a new low Thursday alongside the continuing decline in the price of crude.

Ship & Bunkers Global 4 Ports (G4) index that tracks the average bunker prices across Singapore, Fujairah, Rotterdam and Houston, indicated the average VLSFO price Thursday fell to 235.50 $/mt – its lowest since records for VLSFO began in October last year.

https://shipandbunker.com/news/world/205725-vlsfo-price-hits-new-low-bunker-costs-lowest-since-2016

Ship and Bunker: TFG Marine to Join Singapore Bunker Market at Start of May

Global bunker supplier TFG Marine plans to join the Singapore bunker market at the start of May, after being awarded its license to operate in the world’s largest bunkering hub this week.

https://shipandbunker.com/news/apac/849963-tfg-marine-to-join-singapore-bunker-market-at-start-of-may

Freight Waves: Diesel’s price decline Tuesday was historic; crude’s fall sets another record

A day after crude oil trading on a major exchange turned negative, the price of ultra low sulfur diesel on the same exchange did something it hadn’t done in almost 30 years.

https://www.freightwaves.com/news/diesels-price-decline-tuesday-was-historic-crudes-fall-sets-another-record

Ship and Bunker: FEATURE: Rotterdam-Singapore Bunker Cargo Trade Collapses on IMO 2020 Changes

One of the less remarked-upon casualties of IMO 2020 so far has been the near-total collapse in the fuel oil cargo trade around Northwest Europe.

The high Sulphur fuel oil trade flow from Russia to Western Europe, and the on from the Amsterdam-Rotterdam-Amsterdam hub over to Singapore, used to be one of the mainstays of the bunker market.

https://shipandbunker.com/news/world/755801-feature-rotterdam-singapore-bunker-cargo-trade-collapses-on-imo-2020-changes

Ship and Bunker: Scrubber Retrofits Continue Despite Narrowing Price Advantage

Some container lines are persevering with scrubber retrofits despite the recent narrowing in high-sulfur fuel oil (HSFO) discounts that makes them look less profitable, according to shipping intelligence service Alphaliner.

https://shipandbunker.com/news/world/476322-scrubber-retrofits-continue-despite-narrowing-price-advantage

Bunkerspot: GLOBAL: VeriFuel releases Q1 2020 fuel quality statistics

Very low sulphur fuel oils (VLSFO) accounted for 49% of samples tested by Bureau Veritas VeriFuel in the first quarter of 2020, with the percentage of VLSFOs meeting the 0.50% sulphur limit growing from just under 89% in January to over 95% in March.

https://www.bunkerspot.com/global/50369-global-verifuel-releases-q1-2020-fuel-quality-statistics

Shippingwatch: Major oil fluctuations rub off on shipping lines’ fuel prices

The massive fluctuations in the oil price in recent days mean that the price of low-sulfur in the US on Wednesday was lower than that of high-sulfur fuel, notes shipping analyst Lars Jensen. Oil prices increase Thursday.

https://shippingwatch.com/carriers/Container/article12093913.ece

Seatrade: Bunker prices slip, high-low sulphur spread narrows to $56

Marine fuel prices have dropped significantly this week with the low sulphur grade nearing below $200 per metric tonne (pmt), narrowing its price differential with the high sulphur grade.

https://www.seatrade-maritime.com/bunkering/bunker-prices-slip-high-low-sulphur-spread-narrows-56

Heavylift: Clarity needed on bunker surcharges

Few could have predicted the rapid drop in marine bunker prices, or the differential between VLSFO and HFO narrowing so quickly, when the IMO’s sulphur 2020 regulations came into effect on January 1.

While shipping lines welcome the cheaper bunkers, the European Association for Forwarding, Transport, Logistics and Customs Services (Clecat) said that forwarders are yet to benefit from the 35 percent drop in fuel prices because of the one-to-two month lag in bunker fuel surcharge calculations.

Relaying the concerns of the European freight forwarding community, Willem van der Schalk, president of Clecat, said: “This gives rise to the suspicion that carriers are using the bunker adjustment factor (BAF) as a revenue-raising tool as well as a cost-recovery during the Covid-19 crisis.

“Whereas freight forwarders understand that carriers are facing increased costs to secure continuity of services, all other parties in the logistics supply chain are facing disruption and fall outs, not the least our clients, the shippers.”

The association is calling for greater transparency when it comes to fuel costs, especially as the supply chain tries to navigate these uncertain times.

https://www.heavyliftpfi.com/

Bunkerspot: EUROPE: Southern European ports reflect narrowing high-low sulphur fuel price differential

Bunker prices in five key ports in Southern Europe are, by and large, mirroring the price trends seen at Rotterdam, but with some ports showing an even narrower price differential between high sulphur fuel oil (HSFO) and very low sulphur fuel oil (VLSFO) than at the Northern European bunker hub.

https://www.bunkerspot.com/europe/50378-europe-southern-european-ports-reflect-narrowing-high-low-sulphur-fuel-price-differential

News Round-Up – IMO sulphur regulations 2020

News Round-Up – IMO sulphur regulations 2020

20 April – 16 stories in our News Round-Up this week, including the effect of Covid-19, Scrubbers and Low Sulphur fuel the economics.

Sulfur Out, Scrubbers In

IMO 2020 marks the start of shipping’s journey toward sustainability. 

When it comes to environmental pollutants, carbon dioxide is public enemy number one. Yet new regulations from the International Maritime Organization (IMO) target a different toxic molecule: sulfur dioxide. 

https://www.maritime-executive.com/magazine/sulfur-out-scrubbers-in

Monitoring compliance on the backburner

The Covid-19 pandemic is masking the true picture of sulphur 2020 compliance, according to maritime consultancy Hill Dickinson.

https://www.heavyliftpfi.com/news/monitoring-compliance-on-the-backburner

GLOBAL: Teekay reiterates IMO 2020 compliance strategy; still says ‘no’ to scrubbers

In its 2019 Sustainability Report published this week, Teekay says, ‘The scrubber in its present form is not an optimal solution to deal with the stringent and growing limitations to sulphur emission.

https://www.bunkerspot.com/global/50334-global-teekay-reiterates-imo-2020-compliance-strategy-still-says-no-to-scrubbers

AMERICAS: NYC Ferry takes delivery of low-emission ferries

Hornblower’s NYC Ferry operation has taken delivery of two low-emission, Tier 4 compliance passenger ferries designed by Incat Crowther.

https://www.bunkerspot.com/americas/50331-americas-nyc-ferry-takes-delivery-of-low-emission-ferries

Diesel starts competing with jet, gasoline for floating storage in Europe

Ultra-low sulfur diesel is entering into competition with jet fuel and gasoline for floating storage as onland locations across Europe reach capacity amid a sharp fall in diesel demand and a very steep contango making the economics potentially workable, according to industry sources.

https://www.bunkerworld.com/news/156867

HSFO Med/North swap hits record low as Med demand weakens

The fuel oil swap product comparing high sulfur fuel oil values in Northwest Europe against its Mediterranean counterpart, known by many as the Med/North, hit record lows Wednesday as HSFO came under pressure from falling bunker demand.

https://www.bunkerworld.com/news/156874

Feb oil refining capacity use rises to 80.1%

Argentina’s use of oil refining capacity rose to 80.1% in February from 71.7% in the year-earlier month, as rising local crude production made more supplies available for processing, a government report showed Thursday.

https://www.bunkerworld.com/news/156871

How 2020 sulphur rules are turning out

One of the biggest concerns brought about by 2020 sulphur rules is unexpected – the availability of traditional fuels at traditional prices. There are also concerns about mixing non compatible fuels and decreased lubricity, writes Neil Graham, technical director of Royston.

http://www.tankeroperator.com/ViewNews.aspx?NewsID=11522

EU CO2 emissions fell 8.9% in 2019: initial EC data

Carbon dioxide emissions under the EU Emissions Trading System fell by an indicative 8.9% in 2019 from the previous year, according to an analysis of initial figures released by the European Commission Wednesday. https://www.bunkerworld.com/news/156857

Monjasa reaps fruit from IMO 2020 preparations

Danish bunker company Monjasa reported an improved business performance on the back of the sulphur cap regulation that entered into force on January 1, 2020, marking a global transition of ships to cleaner fuels. https://assafinaonline.com/maritime-news/assafina-news/offshore-2/monjasa-reaps-fruit-from-imo-2020

Major shippers like Lego and Ikea demand climate action after coronavirus

Some of the biggest customers of container lines, like Nestlé, Lego and Ikea, demand that politicians prioritize climate change mitigation once the corona pandemic is beaten. And not to do as they did after the financial crisis, the companies emphasize.

https://shippingwatch.com/carriers/Container/article12076940.ece

VLSFO Price Spreads Narrow Across Top Four Bunker Hubs

The VLSFO price spread between the most and the least expensive of the top four bunker ports narrowed by $7.50/mt to $23/mt on Monday.

https://shipandbunker.com/news/world/195161-vlsfo-price-spreads-narrow-across-top-four-bunker-hubs

Asia LSFO market draws clean fuel feedstock on flagging gasoline demand

The Asian low sulfur fuel oil market is drawing in feedstocks for blending into the marine fuel 0.5% pool that typically go into making clean fuels like gasoline, especially low sulfur vacuum gasoil, market sources said Tuesday.

https://www.bunkerworld.com/news/156846

Bunker fuel inspections expected to drop as coronavirus measures take center stage in shipping

The transition to the International Maritime Organization’s global low sulfur mandate and the high sulfur fuel oil carriage ban has been relatively smooth so far but inspections are set to drop as the focus has shifted to containing the coronavirus’ spread, with safe bunkering practices, crew changes and continuity of the global supply chain in shipping receiving more attention, sources say.

https://www.bunkerworld.com/news/156842

Coronavirus’ spread hurts scrubbers outlook in short run: EGCSA

The coronavirus pandemic has created a grim outlook for scrubbers in the short term as some shipowners prepare to divert their capital for other uses while a few defer planned installations either due to a narrowing high/very low sulfur fuel oil spread or a shortage of manpower at shipyards, Exhaust Gas Cleaning Systems Association Director Donald Gregory said in an interview with S&P Global Platts. https://www.bunkerworld.com/news/insight/156832

Carriers cancel low-sulphur surcharges as fuel prices drop – along with demand

Container spot rates from Asia to Europe remained stable this week and, having withdrawn around a third of headhaul capacity for April, carriers will hope they have done enough to match the collapse in demand.

https://theloadstar.com/carriers-cancel-low-sulphur-surcharges-as-fuel-prices-drop-along-with-demand/

COVID-19 and the unsung heroes – our seafarers

Javed Ali and Sarah Barnes highlight some key points to assist shipowners in protecting their seafarers’ mental health during the unprecedented COVID-19 pandemic. 

https://www.hilldickinson.com/insights/articles/guidance-help-protect-seafarers-mental-health-during-covid-19-pandemic

Pandemic masks true picture of sulphur 2020 compliance

Pandemic masks true picture of sulphur 2020 compliance

It will be difficult to ascertain a full picture of how well the international shipping industry is complying with the new sulphur 2020 environmental legislation and judge the effectiveness of enforcement measures until sometime after the Covid-19 pandemic has receded, says maritime law specialist Hill Dickinson.

Introduced on January 1st this year, the implementation of Regulation 14.1.13 of Marpol Annex VI, was a key issue for the shipping industry, particularly in respect to how the sulphur cap was being observed and enforced. The horizon issue was the Carriage Ban, effective on 1 March 2020, which prevented any vessel not fitted with an exhaust gas cleaning system from carrying marine fuel with a sulphur content in excess of 0.50% m/m for use on board.

Beth Bradley, a Partner with Hill Dickinson, explained: “While a few issues arose concerning the quality of the low sulphur fuel, particularly some blended fuels having a propensity to sediment, and around marginal breaches of the cap, the implementation of the global sulphur cap was progressing smoothly with reports of high levels of compliance.

“Three months on and the disruption to international shipping caused by Covid-19 has pushed sulphur cap issues well and truly from the headlines. Regulation 14.1.3 remains in force – however, where Port authorities globally are prioritising health and the movement of freight, enforcement action will perhaps be less of a priority.”

The impact of the pandemic has led to serious delays to existing orders for the retro-fitting of exhaust gas cleaning systems, particularly for those vessel where the work was to take place in Chinese shipyards, or to cancellations as owners and operators seek to cut costs.

In addition, the collapse in the oil price has eroded the price differential between high sulphur and low sulphur fuel oil, making the immediate prospect of a larger uptake of exhaust gas cleaning systems doubtful, particularly if prices remain low for a significant period of time.

The UK’s Maritime and Coastguard Agency (MCA) recently announced that it was suspending vessel checks for compliance with low sulphur fuel regulations in order to keep freight moving, although it made clear that it will still inspect vessels where information is received indicating that an inspection would be appropriate. This is unlikely to be the last such announcement, predicts Ms Bradley.

Ms Bradley commented: “While the sulphur cap and the carriage ban remain in force such that owners risk enforcement action if they carry marine fuel with a sulphur content in excess of 0.50% m/m for use on board, the disruption caused by Covid-19 may reduce that risk where port state control is under pressure on other fronts. It also will make it difficult to ascertain a full picture relating to compliance and enforcement until sometime after the pandemic has receded.”

Source: Hill Dickinson

News Round Up 13 April 2020

News Round Up 13 April 2020

Hong Kong Shipping Gazette: Coronavirus dries up thirst for box ship ordering amid market uncertainty

CONTAINER shipping lines show no interest in fleet expansion as the industry struggles to ride out the fall out from the coronavirus pandemic that has led to a significant drop in orders at shipyards across all shipping sectors.

BIMCO chief shipping analyst Peter Sand was quoted as saying in a report by UK’s The Loadstar: “Uncertainty about future environmental regulations, as well as lower demand growth outlook in the coming years had many thinking twice before ordering a new ship. The very sharp decrease in market sentiment and global shipping demand has lowered contracting activity further.”

The analyst’s shipping market update notes that the earlier main issue of low sulphur compliance and recovery of the additional cost has been overtaken by the virus crisis.

https://www.shippingazette.com/menu.asp

Hong Kong Shipping Gazette: Scrubber installations to be scrapped as oil price falls off cliff

FINNISH technology group Wartsila says container and dry bulk ship owners are cancelling scrubber retrofits and installations in a move designed to cut costs. Alphatanker predicts a “flood of cancellations” as cost cutting and the erosion of marine fuel oil premiums render the sulphur abatement technology redundant.

The price of 0.5 per cent very low sulphur fuel oil now used by some 70 per cent of the international global fleet dived by 278 per cent in Singapore since the start of this year when it was as high as US$653.75 per tonne, according assessments compiled by price reporting agency Argus Media, reported London’s Lloyd’s List.

https://www.shippingazette.com/menu.asp

HLPFI: Brexit & bunkers preoccupy legal professionals

Global complications have always cast a long shadow over legal services in maritime commerce, whether tariff disputes or embargoes. Brexit and low-sulphur fuel regulations have been some of the key themes of the past 12 months, writes Gregory DL Morris.

https://content.yudu.com/web/42n2u/0A42uap/HLPFI.MarApr.2020/html/index.html

Heavy Lift: Covid-19 shakes up Sulphur 2020

The rapid spread of Covid-19 has had a multi-faceted impact on global shipping. HLPFI takes a look at how the outbreak has caused shockwaves in bunker prices and what this means for the implementation of the sulphur 2020 regulations.

https://www.heavyliftpfi.com/news/covid-19-shakes-up-sulphur-2020-1/

News Update 8 April 2020

News Update 8 April 2020

BUNKERSPOT: ASIA PACIFIC: BUNKERING OPERATIONS SET TO START AT HAMBANTOTA

Informed local sources have told Bunkerspot that bunkering operations at the Sri Lankan port of Hambantota are now set to begin.

https://www.bunkerspot.com/asia/50253-asia-pacific-bunkering-operations-set-to-start-at-hambantota 

 

BUNKERSPOT: PAVILION ENERGY CALLING FOR INDUSTRY STANDARD FOR LNG’S TOTAL GHG EMISSIONS

Pavilion Energy is calling on LNG suppliers to help develop an industry standard for the fuel’s total greenhouse gas (GHG) emissions, according to Reuters.

https://www.bunkerspot.com/global/50258-global-pavilion-energy-calling-for-industry-standard-for-lng-s-total-ghg-emissions

 

Bunkerspot: MAN ES low-speed dual fuel engines top 1 million operating hours

Our plan is very much to continue this dual-fuel focus – to this end, we recently released a Mk II ME-GI model and are currently, owing to market demand, developing an Otto-cycle variant – the ME-GA,’ says Bjarne Foldager, Senior Vice President, Head of Two-Stroke Business at MAN Energy Solutions. https://www.bunkerspot.com/global/50258-global-pavilion-energy-calling-for-industry-standard-for-lng-s-total-ghg-emissions

 

GLOBAL: New CEO for TFG Marine

Anders Grønborg has joined TFG Marine as Chief Executive Officer to oversee the company’s ongoing expansion efforts in the global marine fuel markets.

https://www.bunkerspot.com/global/50250-global-new-ceo-for-tfg-marine

 

BUNKERSPOT: CMA CGM will be suspending low sulphur surcharge next month

CMA CGM has announced that, ‘taking into consideration the current price of VLSFO’, the Low Sulphur Surcharge (LSS20) which it introduced on 1 December will not be applicable from 1 May.

https://www.bunkerspot.com/global/50259-global-cma-cgm-will-be-suspending-low-sulphur-surcharge-next-month

 

Sound market intelligence on global bunker prices is a ‘must have’ requirement for all maritime industry stakeholders

BPi offers bunker price indications in over 350 global ports, including for the new IMO 2020-compliant very low sulphur fuel oils (VLSFOs), and instant price comparisons across all ports.

https://www.bunkerspot.com/bpi

 

BUNKERSPOT: Maersk seafarers hospitalised in China with suspected coronavirus

DANISH shipping giant, AP Moller-Maersk has confirmed that crew members have been evacuated from the Gjertrud Maersk and hospitalised in Ningbo, China, with suspected cases of the coronavirus.

https://www.freightwaves.com/news/maersk-crew-hospitalized-in-china-with-suspected-coronavirus

REUTERS: Shipping industry calls on G20 leaders to allow merchant ships to call at ports

SHIPS and their crews must be able to trade freely with minimal port restrictions to ensure supply lines don’t collapse while the coronavirus places many major cities around the globe under lockdown.

https://www.reuters.com/article/us-health-coronavirus-shipping/shipping-industry-urges-g20-to-keep-freight-flowing-as-virus-hits-supply-chains-idUSKBN21B2AK

 

SPALSH 24/7 two articles:
IMO 2020 capped by coronavirus, stretched authorities ditch fuel checks

Less than three months after being introduced the global sulphur cap risks being another victim of the coronavirus with news from the UK where authorities have publicly admitted they have stopped checking for compliant fuel.

https://splash247.com/imo-2020-capped-by-coronavirus-stretched-authorities-ditch-fuel-checks/

Stena Bulk MR tanker takes on biofuel

Swedish tanker owner Stena Bulk has commenced a test to run one of its MR tankers on 100% biofuel. https://splash247.com/stena-bulk-mr-tanker-takes-on-biofuel/

 

Scrubber installations to be scrapped as oil price falls off a cliff

FINNISH technology group Wartsila says container and dry bulk ship owners are cancelling scrubber retrofits and installations in a move designed to cut costs. Alphatanker predicts a “flood of cancellations” as cost cutting and the erosion of marine fuel oil premiums render the sulphur abatement technology redundant.

The price of 0.5 per cent very low sulphur fuel oil now used by some 70 per cent of the international global fleet dived by 278 per cent in Singapore since the start of this year when it was as high as US$653.75 per tonne, according assessments compiled by price reporting agency Argus Media, reported London’s Lloyd’s List.

“Persistent low marine fuel prices will hit the fortunes of shipowners who have invested heavily to have their vessels equipped with scrubbers,” said Alphatanker, a research division of Paris-based brokers BRS.

The difference in price between compliant very low sulphur fuel oil (VLSFO) and 3.5 per cent high sulphur fuel oil used by vessels with scrubbers has shrunk to $50 per tonne, from $400 per tonne earlier this year, according to Alphatanker.

That has reduced the earnings premium for scrubber-fitted vessels and extended the payback time for the $2.5 million average investment to four years rather than four months for the largest vessels that have retrofitted the technology. Payback time will be even longer for smaller vessels, given the economies of scale.

“The question is now rightly being raised over whether scrubber installations will be cancelled,” Alphatanker said in its weekly report. “Installations due to be carried out in Chinese yards were already being delayed in the wake of Covid-19 and now following stellar returns for tankers, some owners are reportedly delaying or even, where possible, cancelling installations.

“Reports suggest that owners of bulkers or liners struggling amid the global downturn are also cancelling scrubbers as they strive to cut costs. We fear that this is just the tip of the iceberg and as the global recession intensifies during the second quarter, this drip of cancellations could turn into a flood.”

Some 2,753 vessels totalling 328.7 million deadweight tonnage (dwt) were trading and had scrubbers installed, according to the Lloyd’s List Intelligence database at the start of January.

A further 580 newbuildings were to have scrubbers fitted. Some 16.4 per cent of crude tankers, including one in five very large crude carriers, and 12.7 per cent of containerships have the technology installed. Dry bulk scrubber penetration is at 12 per cent.

https://www.shippingazette.com/menu.asp?encode=eng