Middelfart-based Bunker Holding, the parent company of 43 international subsidiaries specialising in the supply of marine fuel, believes the bunkering industry will experience a reduction in the availability of credit from banks by 2020.
“2020 is something we have a very sharp focus on,” Christoffer Berg Lassen, the new Chief Commercial Officer at Bunker Holding, told Manifold Times in an interview.
“One important thing is as a bunker trader and physical supplier you need to be able to provide credit when it comes to 2020.”
Most vessels will have to use varieties of low sulphur marine fuels such as low sulphur fuel oil (LSFO) or marine gas oil (MGO) by 2020 in order to meet the 0.5% sulphur limit cap mandated by the International Maritime Organization (IMO).
“The switch to distillates or low sulphur heavy fuel [by 2020] will most likely mean that the bunker cost for our clients will be much higher,” Lassen explains.
“The shipowners will need more credit for same amount of volume they face today because by 2020 they are going to burn the same amount of tonnage but it’s going to be more expensive.
“So, we are working to make sure we have the right credit facilities in place for our clients who may suddenly need as much as 30% more credit to do the same volume.
“I think it’s very important that people focus on having the right amount of credit ready by 2020.”
Lassen, meanwhile, expects bunker prices to increase between 15 to 35% by 2020; Bunker Holding currently has substantial credit facilities available with the banks.
“And we are even looking to scale that up even further.”
Moving forward, Lassen notes Bunker Holding to be in the process of securing 2020 compliant bunker avails for future deliveries; a project which he is working hand-in-hand with Carlos G. Torres, the former head of Marine Fuels at BP, who is now employed at Bunker Holding.
“Carlos is going to run most of the 2020 strategy in cooperation with me and we are going to take us [Bunker Holding] to 2020 in a safe manner,” he says.
“We are focusing a lot on the supply side to make sure that we get the right parcels in the right places.
“[Even] If we have to switch to LSFO, we need to get the best parcel and the most parcels; because there is some evidence that there is not going to be enough LSFO to start with and some people will have switch to distillates – which is going to be more expensive.
“At Bunker Holding, we are always striving to become and maintain the position as number one in the world in terms of bunkers; our goal is to be the biggest and most preferred bunker supplier in the world for our clients.”
Photo credit: Bunker Holding
Published: 4 April, 2018
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