Shipowners have been told that they will need to rethink their fleet deployment plans for the coming year, as the sector expects to pay significantly more in bunker expenses as reported by Splash247.
Bunker prices, which are already at their highest level since 2012, are expected to remain severely elevated throughout the year, according to many senior executives polled by sister publication Splash Extra, leading to a greater swath of the world merchant fleet deciding to slow steam where possible and forcing the hand of many vintage units towards demolition.
So far this year, the price of Singapore very low sulphur fuel oil (VLSFO) bunker fuel has risen 6%, from $640 per tonne to $680 yesterday.
“Elevated bunker prices are here to stay, and the VLSFO-HSFO fuel spread is likely to remain wide. It’s good for scrubbers,” said Randy Giveans, senior vice president of equity research at an investment bank, Jefferies.
“We expect this will keep average speeds relatively low and will also incentivise scrapping of the older, less fuel-efficient fleet,” Giveans said, adding: “In this high-priced bunker fuel environment, you want eco-ships, ideally with scrubbers, and we expect those vessels to massively outperform anything over 10 to 15 years of age.”
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