- Bunker barge congestions caused supply shortages and VLSFO price hike in ports.
- The first three weeks of January appeared to be chaotic for smaller shipping outfits.
- Larger shipowners planned for better transition and secured barges through direct contracts.
- From the beginning of January, Singapore reported to have unavailability of VLSFO bunkers.
- Difficulty in finding compliant fuel and the lack of barge tankage caused an increase in demand.
- Market is expected to stabilise after the first quarter of 2020.
Supply and pricing fluctuations are expected to continue throughout the first quarter of 2020, reports Dredging and Ports.
What is the reason?
Logistics failures are cited to be the cause for hike in VLSFO prices.
Reason for price hike
Bunker barge congestion has caused supply shortages and very low sulphur fuel oil (VLSFO) price hike in ports.
Chaotic weeks in January!
For smaller shipping outfits, the first three weeks of January appeared to be chaotic, attempting to source supplies of low-sulphur fuel.
Better transition planned
Svend Moholt, chief operating officer of Danish bunker supplier Monjasa commented that, in contrast larger shipowners and companies planned better for the transition and secured barges through direct contracts.
Moholt added, “With barge availability and logistical issues with the number of vessels wanting to bunker at different terminals, this imbalance in supply and demand has translated into premiums and pricing structures that are not reflective of a balanced market.”
Impact for Singapore port
It is reported that in Singapore since the beginning of January there is unavailability of VLSFO bunkers.
This lead to the below box ships
- Pacific International Lineshas had six 6,600 teu and
- 1,500 teu boxships
remain anchored in Singapore since the beginning of January.
Issues in Mediterranean
According to Tommaso Panzeri, project manager at Bunker Energy, similar issues are seen in the Mediterranean and vessels are seen being diverted from Malta to supply ports with fuel.
Panzeri added, “The difficulty finding compliant products and the lack of barge tankage has caused a dramatic increase in demand that found many bulker suppliers unable to satisfy.”
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Source: Dredging and Ports
