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Updated to Q4 2014
Refining margins for fuel oil remained in the red despite a steep fall in upstream ICE Brent crude oil futures.
Amendments to the International Maritime Organization’s (IMO) Marpol and European Commission’s sulphur directive mandate a maximum sulphur use of 0.1% in bunker fuel from 1 January 2015.
The new regulation will become effective in the “emission controlled area” (ECA) of the Baltic Sea, North Sea, English Channel and waters 200 nautical miles from the coast of the US and Canada.
Low-sulphur fuel oil (LSFO) with 1% sulphur content – the grade being replaced – stopped trading in the European open market in early November, almost two months ahead of the New Year.
Some of the shipping industry’s biggest companies have come together to prevent fraud in meeting the costly new sulphur regulations in order to avoid unfair competition.
Marine gasoil with 0.1% sulphur – the most viable alternative shipping fuel – is approximately $300/tonne more expensive than 1% LSFO, placing shippers in an economic quandary.
But Veritas Petroleum Services (VPS), a fuel quality inspection firm, believes marine gasoil would be the only option for most vessels in the beginning of next year, despite a rise in new hybrid fuels.
Many oil companies, including Shell, ExxonMobil and Lukoil, have jumped on the bandwagon to produce a new grade of ultra low sulphur fuel oil (ULSFO) with 0.1% sulphur and other hybrid fuels forecasted to sell up to $150/tonne cheaper than marine gasoil.
Meanwhile, high-sulphur fuel oil with a 3.5% sulphur content continues to trade in the open platform as the grade is only used as a bunker fuel outside the ECA.
Updated to Q2 2015
Refining margins for fuel oil remained in the red as upstream ICE Brent crude oil futures inched up slightly.
This has not prevented refineries from producing healthy amounts of fuel oil with sulphur content of 3.5%, and supply was abundant in the second quarter. Most of it was being shipped to Singapore for use as bunker fuel.
High-sulphur fuel oil with a 3.5% sulphur content continues to trade in the open platform as the grade is only used as bunker fuel outside the ECA.
Amendments to the International Maritime Organization’s (IMO) Marpol and European Commission’s sulphur directive mandated a maximum sulphur use of 0.1% in bunker fuel from 1 January 2015.
The new regulation has become effective in the “emission controlled area” (ECA) of the Baltic Sea, North Sea, English Channel and waters 200 nautical miles from the coast of US and Canada.
This had meant low-sulphur fuel oil (LSFO) with 1% sulphur content – the grade being replaced – stopped trading in the European open market in early November, almost two months ahead of the new year. The grade is now being traded over the counter and in small quantities in the Mediterranean.
Marine gasoil with 0.1% sulphur – the most viable alternative shipping fuel – is approximately $300/tonne more expensive than 1% LSFO.
Despite the higher cost many shipping companies have shifted to using marine gasoil as bunker fuel in the ECA region.
Many oil companies, including Shell, Exxon and Lukoil, have also jumped on the wagon to produce a new grade of ultra low sulphur fuel oil (ULSFO) with 0.1% sulphur and other hybrid fuels forecasted to sell up to $150/tonne cheaper than marine gasoil.
We offer the following regional Bunker oil analysis and news coverage to keep you informed of factors and developments affecting prices in the Bunker oil marketplace.
News & analysis
ICIS price assessments are based on information gathered from a wide cross-section of the market, comprising consumers, producers, traders and distributors from more than 250 reporters world-wide. Confirmed deals, verified by both buyer and seller, provide the foundation of our price assessments.
Our in-depth market knowledge drives our specialist focus, as we recognise the importance of individual market dynamics and not a one-size-fits-all approach.
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ICIS C1 Energy bunker market coverage provides readers with unrivalled pricing information and insights into Asia’s bonded bunker markets.
Subscribers receive a daily market snapshot, including prices and news of 11 Chinese mainland ports and 19 Asian markets, including Singapore, South Korea, Japan, Hong Kong, along with a weekly market report.
The report offers information on the latest developments and news on bunker and bunker-related markets in China and across Asia. It supplies readers with price comparisions fo 29 ports week on week, in-depth analysis on key bunker news, margin analysis of bonded bunker supply and spread analysis of bonded bunker fuel oil prices in China, Singapore, Hong Kong, South Korea and Japan.
Readers can also benefit from reading a market commentary on China’s bunker market, including mainland bonded bunker, internal-trade bunker, and Hong Kong and Taiwan bunker along with China’s bunker shipping fixtures. The report also covers the shipping market, publishing information on the China export container market, and the international bulk dry and dirty cargo shipping market.
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