There are no any drastic changes in bunker prices registered on global fuel market in a week despite a string of bullish news, including strong economic data from China, a weaker U.S. dollar that made oil cheaper for buyers in foreign currencies, and reports of more economic stimulus discussions in key markets. The World Bunker Index MABUX has decreased slightly for a week. The 380 HSFO index fell from 316 to 312 USD/ MT (-4.00 USD), VLSFO lost 5.00 USD: from 366 to 361 USD / MT, MGO declined by 6 USD: from 444 to 438 USD / MT. The Global Scrubber Spread (SS) (price difference between 380 HSFOs and VLSFOs) narrowed by 2.68 USD and averaged USD 50.39 (53.07 USD a week ago).
August average SS Spread in Rotterdam was at 46.46 USD (min. 35 USD/max. 55 USD). Monthly average SS Spread at the port of Singapore was 15 USD higher – 61.83 USD (min. 56/ max. 71). SS difference in both hubs narrowed to 7 USD on Sep.02 while was up to 22 USD again on Sep.03.
A new emission control area (ECA) for the shipping industry was launched this week. From Sep.01 the sulfur limit has been cut from the global 0.50% cap to 0.10% for ships in South Korea’s new ECA (the ports of Incheon (including Kyongin), Oyeongtaek Dangjin, Yeosu, Gwang-yang (including Hadong), Busan and Ulsan. At first ships will be required to comply with the new limit within one hour of anchoring or mooring in the ECA, and from the start of 2022 they will be required to use 0.10% sulfur fuels at all times within the area. The use of scrubbers is permitted, and South Korea does not impose restrictions on the discharge of washwater from open-loop scrubbers.
As per Cockett Marine Oil, global bunker demand may have dropped by as much as 17% this year. The company’s internal estimates show a drop of 11-17% for 2020 as a whole. The drop is equivalent to a decline of 29-45 million MT from 2019 s level. At certain locations, the impact of reduced shipping activity over the economics of marine fuel arbitrage would limit the prospects of sustained demand. However, it is predicted that the decline in marine fuel demand will have established a bottom during the third quarter of this year taking into consideration the prospects for a [Covid-19] vaccine and its availability for mass distribution.