Regulation is needed in Hong Kong’s bunkering industry to allow mass flowmeter (MFM) bunkering operations to flourish.
‘Bunkering operations in Singapore are really good not only because of the MFM, but because of regulation,’ observes a representative of Hong Kong-listed NewOcean Energy Holdings Limited, a subsidiary of NewOcean Group.
‘The problem is Hong Kong has no regulator for its bunkering industry, so even if a company adopts MFM bunkering operations there is no standard regulation on which standards to use.
‘Even if firms were to install MFM on board their barges there is nobody to regulate. So, how can standards be met?’
According to the source, the Hong Kong bunker market is currently experiencing increasing pressure from Shanghai due to narrowing prices.
‘Typically, the spread between Hong Kong and Shanghai is $10 per metric tonne (pmt) with Hong Kong being on the more expensive end; but there are some days when it narrows down to $5 pmt or even lesser.
‘With increased traffic going to the world’s biggest container port, shipowners have even more reason to steam pass Hong Kong during days when the price spread is low.’
The above is also the reason why NewOcean Group started operations of Singapore-based NewOcean Fuel (Singapore) in September, he explains.
‘We set up an office in Singapore to function as a purchasing centre for our Hong Kong market so we can bypass any intermediaries and do better by purchasing fuel oil directly from the Singapore market,’ he says.
‘All the bunker volume for our Hong Kong operations is now bought using cargo from Singapore. So by setting up a purchasing center in Singapore, our logistical operations are cheaper overall and we remain competitive.’
NewOcean Group launched operations at Singapore on 31 August, 2017. The company is the second largest marine fuels supplier in the Hong Kong bunker sector.
The group owns a 70,000 mt capacity deep sea oil storage terminal in Zhuhai, China and also owns seven bunker ships in Hong Kong and 28 bunker ships inside China. It also manages more than 200,000 mt of oil storage capacity at different places in China to facilitate the purchase, storage and distribution of bunker fuels.
Photo credit: FreeImages.com/Micheal Pang
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Primarily achieved by a 10% growth in volume and a reduction in operational costs and expenses related to counter party performance, says company statement.
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