News Round Up – updated 30 March

Mar 31, 2020 | Bunkering, Costs, Environment, Fuel, Implications, News Update, Overview, Scrubbers, Ships, Sulphur 2020 | 0 comments

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.

https://shipandbunker.com/news/world/510733-feature-imo-reports-show-sharp-drop-in-vlsfo-shortages

 

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. https://www.tradewindsnews.com/tankers/scrubber-payback-pushed-out-to-four-years-as-spread-narrows-again/2-1-779285

 

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.

https://shippingwatch.com/carriers/Container/article12029502.ece

 

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.

https://container-mag.com/2020/03/20/msc-blames-virus-related-scrubber-delays-for-imo-2020-violation/

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.

https://shipandbunker.com/news/apac/151925-taiwan-to-introduce-universal-050-sulfur-bunker-limit-from-july

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).

https://shipandbunker.com/news/apac/151925-taiwan-to-introduce-universal-050-sulfur-bunker-limit-from-july

 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

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

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. https://www.bunkerworld.com/news/156655

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. https://www.bunkerworld.com/news/156655

 

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. https://www.bunkerworld.com/news/156655

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. http://www.tankeroperator.com/ViewNews.aspx

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. http://www.bunkerworld.com/news/i156708

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. https://www.bunkerworld.com/news/156705