HSFO Demand Cannot be Dead and Gone from Shipping Industry

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With the upcoming 2020 sulphur cap, the shipping industry is on the run for compliant low-sulphur fuels. Yet, it is seen that the demand for high sulphur fuel will not be extinct as those who will use scrubbers will continue making use of it, reports Safety4Sea.

Technologies for compliance

Following IMO’s 2020 sulphur cap, according to which ships will have to use bunker fuel with a sulphur limit of maximum 0.5%, the shipping industry is measuring its options looking for ideal fuels and technologies to achieve compliance to the regulations.

Decline in spot premium

It is reported that, Asia’s spot premium for 380-centistoke (cst) high-sulfur fuel oil (HSFO) is expected to decline from its recent records as more and more shipowners head towards cleaner marine fuels to meet IMO’s regulations.

However, analysts agree that demand for HSFO not completely extinct as those who will opt for scrubbers will continue using it, as vessels with scrubbers which remove the sulphur emissions will be allowed to continue burning HSFO.

Rise in HSFO demand

Moreover, Sharon Weintraub, Chief Executive Officer for Supply and Trading, Eastern Hemisphere at BP reported to Reuters that those who opt for scrubbers will continue using high-sulphur fuel; Adding that they expect that in the future, between 2020-2024, there will be an increase demand on scrubber investments, meaning that the HSFO demand will also rise.

Concluding, traders support that despite the dominance of low-sulphur fuels in the industry, HSFO will hold about 15-20% of the entire marine fuel product mix.

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Source: Safety4Sea

1 COMMENT

  1. Wonder what the refineries will do with left over residual fuel after producing the cash crop distillates .
    Do they have cost effective method to desulfurize the residual fuel by newer technology ?
    If not, will the accumulating residual fuel effect the refining capacity of refinery ?
    If that is the case will there be a supply demand gap, due to rising stock of residual fuel ion refineries and reducing demand for residual fuel ?

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