Analysis

Skuld provides ‘best practise’ for bunker sample storage

Bunker samples provide vital evidence to support claims against suppliers and more, says insurer.

Published

5 years ago

June 3, 2018

The following is an article written by marine insurance provider Skuld on recommended practises for the storage of bunker fuel samples:

Introduction
The quality of bunkers is very important for a ship to ensure safe operation of the main engine, and to comply with MARPOL Annex VI on stricter sulphur content regulations. Bad bunkers are detrimental to engines, and can cause disputes between owner and charterers. It can also lead to Port State Control detentions and huge fines by Authorities.

Disputes as to the quality of bunkers will arise between owners and charterers particularly under time charters. Bunker suppliers and intermediaries (e.g. such as bunker brokers) may also be involved.

Claims for off-spec bunkers can be complicated and can give rise to significant legal liabilities involving damage to the engines, as well as claims for loss of use of the vessel while it is being repaired. Off-spec bunker claims also invariably require instructing experts and lawyers, resulting in significant costs being incurred.

The bunker samples provide vital evidence to support claims against suppliers and to provide protection when facing Port State Control. It is important for the master to retain the bunker samples onboard to determine the quality specification and to demonstrate compliance with Annex VI bunker sulphur limits.

Standard and requirement
MARPOL Annex VI requires representative bunker samples to be taken and retained on board. Resolution MEPC.182(59) "2009 Guidelines for the sampling of fuel oil for determination of compliance with the revised MARPOL Annex VI" provide the details of the sampling, storage and documentation requirements.

Retained sample storage

The retained sample should be kept in a safe storage location, outside the ship's accommodation, where personnel would not be exposed to vapours which may be released from the sample. Care should be exercised when entering a sample storage location.
The retained sample should be stored in a sheltered location where it will not be subject to elevated temperatures, preferably at a cool/ambient temperature, and where it will not be exposed to direct sunlight.
Pursuant to regulation 18(6) of Annex VI of MARPOL 73/78, the retained sample should be retained under the ship's control until the fuel oil is substantially consumed, but in any case, for a period of not less than 12 months from the time of delivery.
The ship's master should develop and maintain a system to keep track of the retained samples.

The DOC holder of the ship shall establish a sampling procedure in their Shipboard Safety Management System based on sound bunkering principles and MARPOL Annex VI resolution MEPC. 182 (59) as well as Industry Standards (ISO 13739), which covers the method of taking the sample, location and witnessing.

Location of storage
It is important to store the samples in a dry/cool place to preserve the labels and avoid vapour loss. Typically, a suitable storage location may be the steering flat, but the best practice is to store the bunker samples in the paint locker as the paint stores are protected by a fixed sprinkler system.

The samples should be kept in a steel cupboard. Some providers sell storage cabinets for MARPOL samples, and commercial samples can also be stored there.

Smoking, or the carriage of smoking materials in the storage room are prohibited. Special attention must be paid to the condition of the flame proof electrical fittings. Care should be exercised when entering a sample storage location.

Period of retained on board
Commercial samples should be retained for evidential purpose for a period of six months after completing consumption of the supply as by then you should know if you have any claims or not.

MARPOL samples must be retained on onboard until the fuel is substantially consumed, but in any event for a period of not less than 12 moths from the time of delivery.
Owners may check with the established testing companies who usually provide in their agreements that they will retain the remains of samples tested for around three months.

Sample label and log
IMO Resolution MEPC 182 (59) requires sample bottles to have a tamper proof security seal with a unique means of identification and a label containing following information:

location at which, and the method by which, the sample was drawn;
date of commencement of delivery;
name of bunker tanker/bunker installation;
name and IMO number of the receiving ship;
signatures and names of the supplier's representative and the ship's representative;
details of seal identification; and
bunker grade.

A Bunker Fuel Sample Log Book to record sample details along with full instructions on sampling should be maintained by the ship. The log book enables the master to maintain a simple and effective tracking system for fuel oil samples held onboard.

All samples in storage, with date of bunkering, source of sample (taken by crew or supplier), seal number and when the time comes, date/place of disposal etc., should be recorded in the Bunker Fuel Sample Log Book.

Disposal and transfer of bunker samples
The expired samples retained onboard may need to be disposed regularly. The disposal of samples and samples containers should be conducted in compliance with MARPOL requirement and local environmental regulations.

The samples are normally disposed either at shore facilities by a sludge collection party or poured back into the fuel tank by crew. Please be reminded that the used empty plastic bottles of fuel samples should be cleaned before disposal. The disposal date should be indicated in the sample log book, and local regulations may require recording of method of disposal.

If a sample is to be delivered to a shore laboratory or Port State Control for analysis, it is important to secure a record of the sample custody transfer. The transfer should be recorded in the sample log with the BDN, with specific reference to:

the sample label details and seal number;
the port, date and time of handover of the sample;
the identity of the person to whom the sample was handed, together with the name, signature and authority stamp as appropriate;
contact details of those who will hold the sample.

Source: SKULD
Publication date: 4 June, 2018

Analysis

ENGINE: Europe & Africa Bunker Fuel Availability Outlook (20 Sep 2023)

HSFO availability “super tight” in Gibraltar; South African authorities impound barges for tax violations; VLSFO and LSMGO supply normal in most Mediterranean ports.

Published

1 week ago

September 21, 2023

Admin

The following article regarding Europe and Africa bunker fuel availability has been provided by online marine fuel procurement platform ENGINE for post on Singapore bunkering publication Manifold Times:

HSFO availability “super tight” in Gibraltar
South African authorities impound barges for tax violations
VLSFO and LSMGO supply normal in most Mediterranean ports

Northwest Europe

HSFO availability has improved a bit in Rotterdam and in the wider ARA hub. Some suppliers can offer the grade for prompt delivery dates, unlike last month when supply was limited, a source says. Lead times of 5-7 days are still recommended for the grade to ensure full coverage from suppliers there, a source says.

Rotterdam’s HSFO price was trading around $595/mt on Wednesday, slightly down from levels of $620/mt seen last week. VLSFO and LSMGO availability remains normal in the ARA hub. Lead times of 4-6 days are recommended for VLSFO, and 1-3 days for LSMGO.

VLSFO and LSMGO availability remains normal for delivery off Skaw. Recommended lead times for both grades are around 7-10 days.

Mediterranean

HSFO availability is “super tight” in Gibraltar. Two bunker suppliers have almost run out of HSFO stock, while only one supplier has a decent amount of supply available. However, the supplier is taking advantage of the tight market by quoting prices unusually high for prompt supply, a source says. Tight supply of HSFO coupled with upward price pressure on VLSFO narrowed the port’s Hi5 spread to just $20/mt on Wednesday.

Gibraltar’s HSFO was indicated in a wide range of $35/mt on Wednesday, with indications for prompt dates often featuring towards the top of that price range. One supplier can supply the grade for delivery dates at the end of September, a source says. VLSFO and LSMGO availability is relatively better in Gibraltar. Lead times of 3-5 days are recommended for both grades.

Gibraltar, one of the biggest bunkering ports in the Mediterranean region, has experienced a lack of competition for HSFO sales. One bunker supplier in Portugal stopped offering HSFO after IMO’s 0.50% sulphur mandate came into force in 2020. Product availability has also been patchy in other bunker locations around the Mediterranean, such as Las Palmas, off Malta and Italian ports, partly because fewer suppliers offer the grade.

However, the narrowing of Gibraltar's Hi5 spread has diminished fuel cost savings against VLSFO for scrubber-fitted vessels. A Hi5 spread above $100/mt is typically considered lucrative for scrubber-fitted vessels burning HSFO.

HSFO is also almost out of stock in Livorno and Venice in Italy, a source says.

Other bunker delivery locations in the Mediterranean such as off Malta, Lisbon, Sines, Piraeus and Istanbul have normal availability of VLSFO and LSMGO, sources say.

Africa

Bunker operations have been restricted in Algoa Bay after the South African Revenue Service (SARS) recently detained five bunker barges over import duties disputes. SARS has demanded offshore bunkering companies pay excise duties for marine fuels imported into South Africa, sources say.

The bunker suppliers operating offshore have resisted SARS' demand by arguing that no import duties should be levied as the fuel is transferred via ship-to-ship (STS) operations without onshore involvement.

The disagreement between SARS and bunker suppliers has triggered concerns about a potential shutdown of offshore bunkering in Algoa Bay. One major bunker supplier in the bay has had its barges detained, while another company's barges are still operating but with limited product capacity, a source claims.

One vessel was receiving bunkers at anchorage, while two were held up waiting on Wednesday, according to Rennies Ships Agency. A total of 12 vessels are scheduled to arrive for bunkers in Port Elizabeth and Algoa Bay over the remaining days of the week.

Some ships seeking bunkers in the region have been diverted to other nearby ports, such as Durban, where the average waiting time for bunker-only calls is about 5-6 days, a source says. LSMGO availability is said to be tight in Durban and Richards Bay, with VLSFO supply also tightening in both ports.

VLSFO and LSMGO availability is good in Mozambique’s Nacala and Maputo ports, a source says. HSFO is almost out of stock in Nacala, where a replenishment cargo is only expected to arrive after 28 September.

By Nithin Chandran

Photo credit and source: ENGINE
Published: 21 September, 2023

Bunker Fuel

JLC China Bunker Market Monthly Report (August 2023)

Country sold roughly 1.80 million mt of bonded bunker fuel in the month, with the daily sales rebounding by 11.80% from the previous month to about 58,065 mt, JLC’s data indicates.

Published

3 weeks ago

September 13, 2023

Admin

Beijing-based commodity market information provider JLC Network Technology Co. recently shared its JLC China Bunker monthly report for August 2023 with Manifold Times through an exclusive arrangement:

Bunker Fuel Demand

China’s bonded bunker fuel sales rally in August

China’s bonded bunker fuel sales rallied in August, because of multiple factors.

The country sold roughly 1.80 million mt of bonded bunker fuel in the month, with the daily sales rebounding by 11.80% from the previous month to about 58,065 mt, JLC’s data indicates.

The sales by Chimbusco, Sinopec Zhoushan, SinoBunker and China ChangJiang Bunker (Sinopec) were 580,000 mt, 650,000 mt, 80,000 mt and 40,000 mt, respectively. Meanwhile, suppliers with regional bunkering licenses tallied about 450,000 mt of bonded bunker fuel sales.

Though the negative impact of bad weather lingered in Zhoushan and Ningbo, more shipowners came to refuel as bonded bunker fuel prices in the two regions were more competitive than those in Singapore. Meanwhile, the barging capacity at Shandong ports recovered to some degree, which also drove up the sales. On the other hand, however, the barging capacity at southern ports was insufficient amid tighter customs inspections, leading to a dip in the sales in South China.

China’s bonded bunker fuel exports drop in July

China’s bonded bunker fuel exports dropped in July, because of inclement weather and some other factors, despite a modest increase in domestic low-sulfur fuel oil (LSFO) production.

The country exported about 1.62 million mt of bonded bunker fuel in the month, down by 20.82% month on month and 4.63% year on year, JLC estimated, with reference to data from the General Administration of Customs of PRC (GACC).

Specifically, heavy bunker fuel exports amounted to about 1.53 million mt, accounting for 94.70% of the total, while light bunker fuel exports settled at 85,700 mt, making up 5.30%.

Regarding the exports by supplier, enterprises with national bunkering licenses exported roughly 1.30 million mt, accounting for 80.73% of the country’s total, with Sinopec Fuel Oil and Chimbusco taking 71.68%. Meanwhile, enterprises with regional licenses exported 311,500 mt, accounting for 19.27%, with PetroChina Fuel Oil (Zhoushan, Shanghai and Guangzhou) taking 194,800 mt which occupied 12.07% of China’s exports and 62.54% of regional suppliers’ total.

Bunkering business at some Chinese ports was disturbed by rains and typhoons, dragging down China’s bonded bunker fuel exports. Meanwhile, some shipowners’ refueling demand was also depressed by bad weather, which added to the downward pressure on the exports.

On the other hand, domestic bunker fuel supply increased moderately amid larger LSFO production, putting a cap on the decline in the exports. China produced about 1.35 million mt of LSFO in July, up by 61,000 mt or 4.73% month on month, with the daily output up by 1.35% to 43,548 mt, JLC’s data shows.

In the first seven months, China’s bonded bunker fuel exports totaled about 12.03 million mt, growing by 6.38% from the same months in 2022, slowing down from a boost of 8.32% in the first six months.

Domestic-trade heavy bunker fuel demand climbs further in Aug

Domestic-trade heavy bunker fuel demand climbed further in August, as most shipowners resumed voyages after typhoons and bullish sentiment popped up in the shipping market. Domestic-trade heavy bunker fuel demand increased to 330,000 mt in the month, up by 20,000 mt or 6.45% from the previous month, JLC’s data shows.

On the contrary, domestic-trade light bunker fuel demand shrank as continuously rising prices somewhat deterred buyers. Domestic-trade light bunker fuel demand settled at 130,000 mt in August, descending by 10,000 mt or 7.14% month on month.

Bunker Fuel Supply

China boosts bonded bunker fuel imports from Russia in July

China sharply boosted its bonded bunker fuel imports from Russia in July, because of large discounts on Russian cargoes.

Russia became the biggest bonded bunker fuel supplier to China in the month, supplying 275,000 mt to the latter, surging by 253.02% year on year and accounting for 82.34% of China’s total imports, JLC estimated, with reference to data from the General Administration of Customs of PRC (GACC). Chinese importers placed more orders for cargoes from Russia, because of significant price advantages for Russian cargoes.

Japan replaced Singapore as the second largest supplier by shipping 46,300 mt of bonded bunker fuel to China, rising by 18.72% month on month and accounting for 13.86% of China’s total.

South Korea remained in the third place with 10,700 mt, accounting for 3.20%, despite a plunge from 70,900 mt in June 2023. Meanwhile, inflows from Singapore tumbled to 2,000 mt, rapidly down from 140,100 mt in the previous month, sending the country to the fourth place. The imports accounted for 0.60% of the total.

Despite an upsurge in imports from Russia and Singapore, China’s total bonded bunker fuel imports dropped to 334,000 mt in July, a cut of 26.33% month on month and 5.28% year on year. Underlying the decline was an increase in domestic low-sulfur fuel oil (LSFO) output and relatively high freight rates for imported cargoes.

Domestic LSFO supply increased as Chinese refiners ramped up their production to quicken the utilization of export quotas, and production basically met demand for low-sulfur bunker fuel. China’s LSFO output settled at 1.35 million mt in the month, gaining 61,000 mt or 4.73% month on month, with the daily output up by 1.35% to 43,548 mt, JLC’s data shows.

Domestic-trade heavy bunker fuel supply increases in Aug

Chinese blenders supplied about 370,000 mt of domestic-trade heavy bunker fuel in August, an increase of 10,000 mt or 2.78% from a month earlier, JLC’s data shows. Blenders bought more low-sulfur residual oil as blendstock amid lower prices, and they continued to raise their bunker fuel output when downstream buyers increased purchases with a bullish attitude.

At the same time, domestic-trade marine gas oil (MGO) supply stabilized at 170,000 mt. Light bunker fuel supply was still relatively abundant amid good coking margins.

Bunker Prices, Profits

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JLC Network Technology Co., Ltd is recognized as the leading information provider in China. We specialized in providing the transparent, high-value, authoritative market intelligence and professional analysis in commodity market. Our expertise covers oil, gas, coal, chemical, plastic, rubber, fertilizer and metal industry, etc.

JLC China Bunker Fuel Market Monthly Report is published by JLC Network Technology Co., Ltd every month on China bunker market, demand, supply, margin, freight index, forecast and so on. The report provides full-scale & concise insight into China bunker oil market.

Note: China-based commodity market information provider JLC Technology has been providing Singapore bunkering publication Manifold Times China bunker volume data since 2020. Data from that period is available here.

Photo credit: JLC Network Technology
Published: 13 September, 2023

Analysis

ENGINE: China’s increased import of Russian bunker fuels in July driven by heavy discounts

Heavy discounts on Russian bunker fuels propelled Russia to become China’s biggest bonded bunker fuel supplier in July, after it delivered 275,000 mt bonded bunker fuel to China, JLC reported.

Published

1 month ago

August 28, 2023

Admin

Russia supplied 275,000 mt bonded bunker fuel to China in July, market intelligence provider JLC reported, citing data from China’s General Administration of Customs (GACC).

Heavy discounts on Russian bunker fuels propelled Russia to become China's biggest bonded bunker fuel supplier in July, JLC reported. The agency estimates that Russian bonded bunker fuel imports accounted for nearly 82% of China's total bonded bunker imports in July.

“Chinese importers placed more orders for cargoes from Russia, because of significant price advantages for Russian cargoes,” reported JLC. In July, bonded bunker fuel imports from Russia jumped by 253% from a year earlier in July, according to JLC’s estimates.

Japan became the second-biggest bonded bunker fuel supplier to China in July, and South Korea held the third position. Japan delivered 46,300 mt of bonded bunker fuel to China, accounting for 14% of the country’s total imports in July. Meanwhile, South Korea delivered 10,700 mt, accounting for 3% in July. Imports from South Korea plunged from 70,900 mt in June 2023, JLC stated in its report.

Similarly, imports from Singapore plummeted to 2,000 mt, marking a sharp decline from 140,100 mt in June. It accounted for less than 1% of China's total bonded bunker fuel imports in July, the agency added.

Despite a surge in imports from Russia, the country's total bonded bunker fuel imports fell to 334,000 mt in July, a decrease of 26% from total imports in June, and a 5% drop from a year earlier in July, the report further stated.

An increase in domestic VLSFO production coupled with high freight rates for imported cargoes prompted Chinese importers to cut down on bunker fuel imports in July, JLC said.

Chinese refineries have been ramping up production to utilise the export quotas, resulting in an increase in China’s domestic VLSFO supply. China supplied 1.35 million mt of VLSFO domestically in July, indicating a month-on-month increase of nearly 5%.

By Aparupa Mazumder

Source: ENGINE
Photo credit: David Yu from Pixabay
Published: 28 August, 2023