Five trade sources said the spread of coronavirus in China had exacerbated a slowdown in demand for marine fuels, also known as bunkers, that is typical of the period around the Lunar New Year holiday, extended this year to fight the disease.
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“We expect the demand for HSFO for scrubber installed ships to account for about 2.5 million megatonnes per month (16% of global bunker demand) as of Jan. 1 2020 and increasing to almost 4 million megatonnes month once the current orders are completed.”
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Chevron and PBF, the refiners expected to be most affected by the rule change, urged regulators to consider a less stringent 0.02 limit by 2023. Valero Energy Corp’s Benicia refinery already has a wet gas scrubber.
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Installations have been delayed chiefly by material shortages and limited shipyard capacity further complicated by the shortage of personnel at Chinese yards from the recent coronavirus outbreak, said Kock.
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“The postponement of body scrubber sheet installations triggered by soaring freight rates in October will only delay the absorption of HSFO volumes next year, exacerbating the decline in HSFO demand especially in H1 2020,” Refinitiv said in a report.
SINGAPORE, Feb 12 (Reuters) – Asia’s market for very low-sulphur fuel oil (VLSFO) has retreated from its record highs near the start of the year, as demand crumbles under seasonal factors and an epidemic in China, while supply expectations improve, analysts and traders said.
This high sulphur fuel oil (HSFO) will not be banned outright but allowed if vessels attach at port a cleaning device called a scrubber — something fewer shipowners and brokers did given the highest profits for freight seen in years.
Front-month backwardation in the VLSFO market fell from a record $22 a tonne on Jan. 20 to $2 a tonne this week while its refining margin fell to 2-1/2 month low of $16.35 a barrel above Brent crude, down from a record $29.35 at the start of 2020, Refinitiv Eikon data showed.
LONDON, Oct 29 (Reuters) – U.S.
sanctions on a top Chinese shipping fleet is set to produce a totally unintended result — less burning of the dirtiest marine fuels at sea at the start of next year, Refinitiv data showed on Tuesday.
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Before the deadline, ship operators rushed to buy large quantities of compliant fuels to ensure adequate supplies, piling pressure on bunker suppliers and pushing premiums for delivered fuels to record highs.
Since the start of the year, the International Maritime Organization (IMO) has banned ships from using fuels with a sulphur content exceeding 0.5%, from 3.5% earlier, unless they are equipped with sulphur-stripping devices known as scrubbers.
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