Global energy and commodity price reporting agency Argus Media on Thursday (9 May) provided an industry update:
German containership owner Hapag-Lloyd said the upcoming sulphur cap will add €1.1-1.2bn ($1.3bn) to its annual bunker fuel bill, because most of its fleet will switch to run on low-sulphur fuels. But it said that it will install the exhaust cleaning systems known as scrubbers on 10 ships, up from two initially.
Hapag-Lloyd will mostly use low-sulphur fuels to comply with the International Maritime Organisation (IMO) 0.5pc sulphur cap, which comes into effect in 2020. It has tested and will retrofit scrubbers ten large container ships, out of its fleet of around 235.
Chief executive Rolf Habben Jansen said that scrubber installations will take some if its fleet out of operation because more ships will go into dry dock, especially in the second half of this year.
"We would like to have most of them done before the end of the year," he said, adding that not all of the scrubber-fitted ships will be deployed on the long routes between Asia-Pacific and Europe. Hapag-Lloyd also has 17 ships ready to be retrofitted to run on IMO-compliant LNG, one of which will go through this process in the first quarter of 2020.
Scrubber economics are generally more favourable on the high seas, where ships can go faster and consume more fuel. But, last month more than 100 maritime companies called for the IMO to set maximum speed limits to reduce greenhouse gas (GHG) emissions through lower fuel consumption. Habben Jansen dismissed this, saying there has been "some political pressure to go and do something, but I do not see a lot of that coming any time soon because there are not really enough ships to steam a lot slower."
Hapag-Lloyd paid $53/t more for bunker fuel in the first quarter than it did a year earlier — an average $425/t. It made a profit of €96.2mn ($107.7mn) in the first quarter compared with a loss of €34.3mn a year earlier. Habben Jansen said that profits were up because of "higher transport volumes, better freight rates and a stronger US dollar", but that increased bunker costs dampened this effect.
Hapag-Lloyd consumed about 1.1mn t of bunker fuel in the first quarter, the same as a year earlier. Its total bunker costs went up from €326mn to €394.6mn.
Of the fuel consumed, 15pc was low-sulphur, up from 12pc last year. Hapag-Lloyd's low-sulphur marine fuel oil (MFO) consumption went up from 5pc to 7pc of the total, and it paid on average $409/t for MFO, up from $359/t in 2018. Its low-sulphur marine diesel oil (MDO) consumption went up from 7pc to 8pc of the total. The average price paid for MDO was $599/t, up from $553/t.
Source: Argus Media
Photo credit: Hapag-Lloyd
Published: 10 May, 2019
The newly launched Code of Best Practices – Commodity Financing guidelines will be the new ‘reference point’ taken by banks when considering to give trade finance to trading houses, believes Ian Teo.
Captain Daknash Ganasen, Senior Director (Operations & Marine Services), MPA, provides direction on what should players do when providing bunker fuel to a COVID-19 infected ship, and more.
Garren Hay will be responsible for sales of the PANOLIN range of Environmentally Acceptable Lubricants for the Singapore sole distributor agent Gealubes Consulting & Trading Pte Ltd.
Universal Alliance, BMS United, Digiland International, Goodwood Associates, Southernpec (Singapore), and Taigu Energy were involved in alleged circular fictitious trades of fuel oil during July 2015.
Bunker orders of ISO 8217:2010 spec LS 380 cSt 0.5% for Nord Gemini, Nord Titan, Ocean Rosemary, and Luzern were placed through global commodities trading and logistics house Trafigura Pte Ltd.
While Covid-19 concerns are important, Captain Rahul Choudhuri was quick to note this does not mean bunker fuel related issues have indeed disappeared from the shipping sector.