• Follow Us On Our Preferred Social Media Platform:

BIMCO introduces IMO 2020 scenarios on ‘uncertain’ bunker market

08 Nov 2019

A BIMCO report published by its Chief Shipping Analyst on Thursday (7 November) has produced an outlook for scenarios to be encountered by the shipping industry heading into IMO 2020 – on the back of uncertainly from the bunkering sector.

Peter Sand notes while the price for Marine Gas Oil Low Sulphur (MGO LS) has largely remained stable, the price for High Sulphur Fuel oil (HSFO) has been become increasingly more volatile in recent months.

The HSFO-MGO LS price spread has, in some ports, widened to levels exceeding the actual price for HSFO.

“The massive uncertainty in the market is clearly interfering with the usual pricing mechanisms. BIMCO reckons, that it is no longer fundamentals driving the market, but rather a market dictated by uncertainty, speculation and general fear of where the bunker market is heading,” he writes.

“A market no longer operating by fundamentals will be hard to forecast. Instead, we can construct potential scenarios, but even then, reality rarely conform to our assumptions.”
Sand, meanwhile, notes that while shipowners are ready for the upcoming sulphur regulation, the bunker market is not.

“Availability will vary significantly between ports and adequate supply in main bunkering hubs may not be enough to cushion the blow from IMO2020. Conversely, others are expecting less disruption from the new regulation and expects to continue onward with business unhindered,” he said.

“Many owners seeking to pass on their added fuel costs might be faced with a rude awakening if the markets are not in the best possible balance. BIMCO has underlined that owners can only pass on their added costs, if the market fundamentals are balanced accordingly.

“No matter the outcome, IMO2020 will surely mark a period of change, both on the regulatory and operational side.”

The original BIMCO report can be viewed here.

Photo credit: BIMCO
Published: 8 November, 2019


Related News

Featured News

Our Industry Partners

  • argus

PR Newswire