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ENGINE: East of Suez Bunker Fuel Availability Outlook (11 June 2024)

HSFO availability tight in Singapore; bunker demand low in South Korean ports; VLSFO and LSMGO availability good in Oceanic ports.

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RESIZED ENGINE East of Suez

The following article regarding regional bunker fuel availability outlook for the East of Suez region has been provided by online marine fuels procurement platform ENGINE for publication on Singapore bunkering publication Manifold Times:

  • HSFO availability tight in Singapore
  • Bunker demand low in South Korean ports
  • VLSFO and LSMGO availability good in Oceanic ports

Singapore and Malaysia

Bunker demand has been relatively quiet in Singapore this week. Lead times for VLSFO have fluctuated lately, with most suppliers now indicating up to 11 days. However, some suppliers can accommodate stems in as little as two days. This marks an improvement compared to the previous week, when traders suggested lead times ranging between 4-14 days.

HSFO supply remains limited in the port, with recommended lead times of 10-13 days – virtually unchanged from last week. For LSMGO, lead times vary between 2-8 days.

According to Enterprise Singapore's latest data, Singapore's residual fuel oil stocks have averaged 4% higher so far in June than in May. There has been a notable 75% decline in weekly average net fuel oil imports in June compared to May, with imports falling by a massive 2.96 million bbls in the first week, while fuel oil exports have decreased by a modest 28,000 bbls. The port's middle distillate stocks have averaged 1% higher this month.

In Malaysia's Port Klang, both VLSFO and LSMGO grades are in ample supply. Some suppliers can provide prompt deliveries for smaller parcel sizes. HSFO availability remains constrained due to limited product availability.

East Asia

VLSFO and LSMGO supply in Zhoushan remains robust, with most suppliers recommending lead times of 3-5 days, which is unchanged from last week. HSFO availability has also seen a slight improvement, with lead times decreasing from around 14 days last week to 7-10 days currently.

In Northern China, both VLSFO and LSMGO grades are available at Dalian port. Similarly, these grades are readily available in Qingdao and Tianjin, although HSFO supply is limited in these ports. In Shanghai, VLSFO and LSMGO availability remains good, while HSFO supply is scarce. In Fuzhou and Xiamen, VLSFO and LSMGO grades are readily available. Conversely, in Guangzhou and Yangpu, prompt availability of both low sulphur fuel grades remains restricted.

In the Taiwanese ports of Hualien, Kaohsiung, Taichung and Keelung, both VLSFO and LSMGO remain readily available, with suggested lead times of 2-3 days, which is consistent with last week.

Overall, all grades are well supplied in Hong Kong, with recommended lead times of around seven days. Adverse weather conditions are forecast in Hong Kong between Friday and Saturday, potentially affecting bunker operations.

In South Korean ports, bunker demand continues to be subdued due to higher bunker prices. On Tuesday, Busan's VLSFO grade was priced $11/mt higher than Singapore's and $21/mt higher than Zhoushan's VLSFO.

VLSFO availability has improved in South Korea's western ports, with lead times decreasing significantly from 14 days last week to around three days this week. LSMGO and HSFO now require approximately three days, which is consistent with last week.

VLSFO availability remains tight in southern South Korean ports, with most suppliers recommending lead times of around 9-12 days, almost unchanged from last week. LSMGO and HSFO availability has tightened, with lead times of 9-14 days advised, significantly up from three days.

Additionally, bunker operations in the South Korean ports of Busan and Yeosu may experience intermittent disruptions between Friday and Sunday due to anticipated high waves.

In Japan, VLSFO availability remains constrained in Tokyo, although some suppliers can still provide prompt stems. Technical issues reported at some refineries may result in restrictions on VLSFO supply in mid-June, potentially affecting availability and leading to increased lead times in Tokyo, according to a source.

Various lead times are recommended across key Japanese ports, with approximately two days in Chiba, around eight days in Osaka, Kobe, Nagoya and Yokkaichi, and longer periods of 12 days in Mizushima and Oita.

Oceania

In Western Australia, suppliers in the ports of Kwinana, Fremantle and Kembla can provide VLSFO and LSMGO, typically with lead times ranging from 7-8 days. In New South Wales, LSMGO is readily available in Sydney, while HSFO supply is mostly available upon inquiry.

In Victoria, Melbourne offers good availability of both VLSFO and LSMGO, with ample VLSFO supply also found in Geelong. However, prompt HSFO supply can be limited in both Victorian ports. In Queensland, suppliers in Brisbane and Gladstone maintain sufficient stocks of VLSFO and LSMGO, with lead times of 7-8 days. HSFO availability remains constrained in Brisbane.

In New Zealand, VLSFO supply in Tauranga and Auckland is ample, and LSMGO supply remains decent in Auckland. However, anticipated adverse weather conditions in Tauranga between Thursday and Saturday may impact bunker operations.

South Asia

In several Indian ports, including Mumbai, Kandla, Tuticorin, Chennai, Cochin, Visakhapatnam and Haldia, VLSFO and LSMGO availability has been restricted due to supply shortages. One supplier in Paradip is nearly out of VLSFO and LSMGO stocks.

Adverse weather conditions are intermittently predicted throughout the week in Sikka, Kandla and Visakhapatnam ports in India, potentially disrupting bunker operations.

Middle East

In the UAE ports of Fujairah and Khor Fakkan, prompt availability of all grades remains limited, with most suppliers requiring lead times of 5-7 days.

In Saudi Arabia's Jeddah port, there is abundant supply of VLSFO and LSMGO, while VLSFO supply is tight in nearby Djibouti. LSMGO supply is more readily available in Djibouti.

In Iraq’s Basrah, VLSFO and LSMGO are readily available, while both grades are tight in Ras Laffan in Qatar.

LSMGO is readily available in the Omani ports of Sohar, Salalah, Muscat and Duqm.

By Tuhin Roy

 

Photo credit and source: ENGINE
Published: 5 June 2024

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Bunker Fuel

Cargo ship “Tony Stark” detained in Spain for bunker fuel spill

Authorities have not allowed the Antigua & Barbuda-flagged ship to leave the port on Africa’s north coast until the owners pay bail of EUR 120,000.

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Marine Traffic / Raul Buque

Spain detained a cargo ship for causing a spill during a bunkering operation near the Spanish enclave of Ceuta, according to Reuters on Tuesday (23 July). 

Authorities have not allowed the Antigua & Barbuda-flagged Tony Stark ship to leave the port on Africa's north coast until the owners pay bail of EUR 120,000 (USD 130,129), Reuters reported, citing comments from Spain’s Merchant Fleet. 

Trails of fuel oil were found in front of Benitez beach, the breakwaters of the port and San Amaro beach in Ceuta, in the Alboran sea.

The Merchant Fleet estimated the size of the fuel spill was one metric tonne. It opened a disciplinary procedure that will determine the final fine.

 

Photo credit: Marine Traffic / Raul Buque
Published: 24 July 2024

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Decarbonisation

DNV: Leading maritime cities driving decarbonization of shipping

Dr Shahrin Osman, Business Development Director, DNV Maritime Advisory and co-author of Leading Maritime Cities report, explains the central importance that decarbonization and digitalization occupy within shipping.

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Dr Shahrin Osman, Business Development Director, DNV Maritime Advisory

Dr Shahrin Osman, Business Development Director, DNV Maritime Advisory and co-author of the Leading Maritime Cities report, explained the central importance that decarbonization and digitalization occupy within shipping in this article published on Tuesday (23 July). 

He outlined how maritime cities are the centres of gravity driving this forward, facilitating innovation and coming up with the solutions which are needed for shipping to reach its ambitious decarbonization goals:

The Leading Maritime Cities report shines a light on the key cities driving the maritime industry forward. With decarbonization and digitalization key factors in today’s maritime world, the report’s co-author explains how these are being advanced by activities in the leading maritime cities.

The latest edition of the Leading Maritime Cities (LMC) report was published in April this year. The collaboration between DNV and Menon Economics delivers fresh insights into the maritime cities which offer the best policy measures, infrastructure and supporting institutions, and how these are driving advancements in the maritime industry.

Leading maritime cities in a world of transition

The LMC report recognizes the central importance that decarbonization and digitalization occupy within shipping. The impact of these two dimensions cuts across the traditional pillars that cities are benchmarked on. To address their transformative effect, this year’s report introduces new indicators – such as capabilities in the adoption of digital technologies and automated processes for port operations, and proactivity in implementing green and sustainable financing practices.

“The maritime industry is in the midst of a major transformation,” says Dr Shahrin Osman, Business Development Director, DNV Maritime Advisory and co-author of the report. “Decarbonization targets mean that the entire industry is looking at how it can undergo a transformation of technologies and fuels to reduce emissions, all of this being supported by advances in digitalization.”

Singapore dominates rankings with strong decarbonization efforts

“Maritime cities are the centres of gravity driving this forward. This is where the leading companies and talents are residing and where the real transformations are taking place. They provide platforms for progress and serve as conduits, linking the industry with the wider global economy.”

Like in the previous edition of this report in 2022, a combination of objective and subjective indicators are used to rank the different cities. Singapore was once again recognized as the leading maritime city, followed by Rotterdam and London, with Shanghai and Oslo making up the remainder of the top five. The Asian city-state hit the top spot in three out of the report’s five pillars, retaining its position as leader in Attractiveness and Competitiveness and overtaking Athens and Shanghai in Shipping Centres and Ports and Logistics. Much of this is due to Singapore’s strong positioning towards decarbonization.

The Silicon Valley of the maritime industry

“Driven by key bodies like the Maritime and Port Authority of Singapore and the Global Centre for Maritime Decarbonization, Singapore has a forward-leaning, future-ready approach. They look at things not just for the next few years, but for the next decade,” says Shahrin. “This includes policies towards building up a multi-fuel infrastructure, the electrification of harbour craft, and the promotion of green shipping corridors.”

“Overall, this has made Singapore an attractive location for shipping businesses, to the point where we now regard it as the Silicon Valley of the maritime industry.”

Government policies driving the green transition in key cities

As the example of Singapore has shown, strong, progressive government policy is one of the key factors behind the evolution of maritime cities, underpinning a forward-leading approach. This can attract companies and top talent to a city, while creating a competitive economic environment with well-developed infrastructure can encourage these actors to stay.

“This is especially relevant for decarbonization initiatives, where returns on investments take longer, and are dependent on wider infrastructure being in place,” says Shahrin. “Government support mechanisms can be crucial in facilitating innovation, so that new products and solutions can be developed.”

Shahrin points to the Norwegian Green Shipping Programme as a prime example of good government policy in action. This brings together public and private actors to overcome key decarbonization barriers, supported by funding from the Norwegian parliament.

Attraction of talent to cities key to progress

Central to the attractiveness and competitiveness of a maritime city is its ability to attract and retain top talent. The presence of research and educational institutions can help to develop talent within that location. The availability of professional opportunities and general high standards of living will encourage leading talents to relocate.

“Achieving technological progress is dependent on aggregating available knowledge that could otherwise be located in silos, and bringing it all together in clusters,” says Shahrin.

Note: DNV’s full Maritime Impact can be viewed here

 

Photo credit: DNV
Published: 24 July 2024

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Research

New study shows real world complexities and shortcomings of IMO CII formula

If IMO aims to maintain CII as a meaningful measure to incentivise shipping’s decarbonisation, a thorough review of the formula is necessary, says Royal Belgian Shipowners’ Association and AMS study.

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RESIZED IMO Building

The Royal Belgian Shipowners' Association (KBRV) released a study that investigated issues with the International Maritime Organization’s (IMO) Carbon Intensity Indicator (CII) formula. 

The study, titled Evaluating the Carbon Intensity Indicator: Challenges and Recommendations for Improvements, was done in collaboration with four master’s students from the Antwerp Management School (AMS). 

As part of their thesis project, the research conducted by the students included a comprehensive literature review, a qualitative analysis, and a quantitative analysis using data from Belgian-controlled ships.

The following are the key findings and recommendations of the study:

Key Findings 

Both literature review and qualitative analysis identified three variables with the most adverse impact on CII ratings:

  • Waiting Time: Time spent idling or waiting in ports or awaiting orders.
  • Number of Ports of Call: The frequency with which a ship docks at different ports.
  • Distance Travelled: The total nautical miles covered by the vessel.

The quantitative analysis confirmed the significant impact of these variables. However, a deeper dive into different shipping segments revealed a complex interplay of factors affecting CII ratings, making it difficult to pinpoint the main adverse variables universally.

For example, container vessels are highly affected by the number of port calls. An increased number of stops results in a worsened CII rating.

When comparing three Very Large Crude Carriers (VLCC) with similar distances travelled, waiting times, and number of port calls, differences in CII ratings still occurred. This could be attributed to external factors beyond anyone's control, such as adverse weather conditions.

For LPG carriers, there was a clear correlation between waiting days and CII ratings. Carriers that traded on routes with major port congestions - thus longing waiting time - scored lower than a sister ship with identical design efficiencies on less busy operating routes.

Recommendations

These findings underscore the multifaceted nature of CII ratings. If the IMO aims to maintain the CII as a meaningful measure to incentivise shipping's decarbonisation, a thorough review of the formula is necessary, taking into account the various factors beyond the control of both shipowners and charterers that influence the CII ratings. At a higher level, the scope and goal of the CII within the basket of measures needs to be reassessed as well.

Shipping is the most efficient way of transporting goods, emitting the lowest GHG per ton of transported cargo. Addressing the carbon efficiency of the sector requires the effort of every stakeholder involved, from shipowners and charterers to port authorities and customers. Placing the responsibility for a ship's efficiency solely on the shipowner does not accurately address the complexities and other influencing factors that exist.

Note: The study titled Evaluating the Carbon Intensity Indicator: Challenges and Recommendations for Improvements can be downloaded here

Manifold Times has covered several parties calling for the amendment of CII in the past including:

Related: INTERCARGO joins shipping industry in calls for IMO to amend CII flaws
Related: IBIA pursues amendment to Carbon Intensity Indicator for bunker vessels

 

Photo credit: International Maritime Organization
Published: 24 July 2024

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