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

 

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.

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

Ship Insight: Scrubber installation delays reported as 2020 looms

Ship Insight: Scrubber installation delays reported as 2020 looms

Shipowners planning to have scrubber installations on existing ships in time for the 1 January deadline may be disappointed recent developments suggest.

Analysts Alphatanker said in its latest report that ‘The past few weeks have seen a number of tonnage owners release statements indicating that their scrubber retrofitting programs were falling behind schedule. Notably, Diamond S Shipping has revealed that scrubbers on 3 of its Suezmaxes will not be fitted until 1Q20, from the original estimate of 4Q19. Meanwhile, a number of non-publicly listed companies have revealed to Alphatanker that certain Chinese yards are running behind schedule due to the longer-than-expected installation time of scrubbers.”

Continue reading.

#IMO2020 #Sulphur2020 #Sulfur2020

Odfjell opts for low sulphur fuel over scrubbers for 2020

Odfjell opts for low sulphur fuel over scrubbers for 2020

 

Tanker owner Odfjell is set to use low sulphur fuel rather than install scrubber to comply with the IMO’s 2020 0.5% low sulphur fuel cap.

“Our conclusion for the moment is that it does not make sense for Odfjell (to install scrubbers),” Odfjell ceo Kristian Moerch said at an oil and offshore conference on Thursday, Reuters reported.

“First of all our fleet spends around 50% of its time in ports, then scrubbers are pointless, and the second part is that 60% of our revenues are covered by contracts with our customers and they have bunker adjustment clauses,” Moerch added.

Read the full article here.

Post your comment and join in the debate.

 

IMO set to slash sulphur emissions by 80% with 2020 regulation

IMO set to slash sulphur emissions by 80% with 2020 regulation

 

As the shipping industry is the biggest culprit of sulphur emissions, the International Marine Organisation (IMO) will be launching Regulation 2020, set to cut sulphur emission, a by-product of the fuels used, by 80 per cent. This will have a marked impact as the marine industry accounts for half of the global fuel oil demand. Last year, the marine industry consumed 3.8 billion fuel/oil barrels per day.

As governments and businesses across the globe continue working to reduce emissions, the 2020 regulation will be latest efforts to ensure the shipping sector is in line with other industries that are consciously striving to reduce greenhouse gas emissions. The regulation will see sulphur limits for bunker fuels cut from 3.5 percent to 0.5 percent.

 

According to a study by consultancy Wood Mackenzie, who will be speaking at the upcoming Tank Storage Asia conference, the shipping industry’s annual bunker costs could rise by up to $60 billion in 2020 with full compliance with the IMO’s sulphur cap.

 

Nick Powell, StocExpo & Tank Storage Portfolio Divisional Director comments: “2020 is not far away and will be on our doorstep before we know it. It is important to act now to ensure that the right frameworks, operations and business models are in place to guarantee compliance as the vessels that fail to do so will face severe fines or could be prevented from sailing.

“The industry as a whole shouldn’t overlook the wider impact that the regulation will have, Singapore may need to repurpose some storage tanks to prepare for a shift from fuel oil to gas oil bunkering.”

Mr Powell continues: “The IMO 2020 regulation is going to have a marked impact on the tank storage industry, with many believing that there will be an increase in demand for storage as the industry shifts to compliant fuel options.

“The IMO 2020 regulation will take centre stage at the upcoming Tank Storage Asia conference, as we grapple with what compliance of IMO 2020 will look like for the industry.”