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Large bunker suppliers to dominate big fuel hubs

Marine fuel brokerage NSI anticipates larger suppliers to overshadow smaller ones

Bigger bunker suppliers will be heavily leveraging economies of scale to dominate the marine fuel hubs in the near future, leaving smaller suppliers obscured. Paul Hardy, head of business development at NSI, noted: “The shift of the largest commodity trading firms into bunkering was initially grudging, but has become more deliberate and pronounced since the IMO 2020 transition brought increased physical supply profits.”

Winners are big players
He added, “There are now highly experienced people in charge of their bunkering divisions; possessing the advantage of in-house tonnage and a global view on the cargo market that localised suppliers cannot match. I observe an increasing amount of tonnage taken by major commodity trading and logistic powerhouses in the coming years. Additionally, high-volume ports will be increasingly dominated by the cargo players, and the smaller ports continue with the companies possessing local knowledge. The struggling ones would likely be those smaller suppliers in the larger markets.”

Mercuria grew its presence in the bunker market with the addition of the newly-acquired Aegean Marine Petroleum assets into Minerva Bunkering in 2019, while Trafigura launched new bunker supplier TFG Marine, with shipping companies Frontline and Golden Ocean. Vitol obtained a presence in the Singapore market by acquiring Sinanju Tanker Holdings in March 2020.

What does that leave trading firms?
Hardy expects bunker trading firms to face the challenge of keeping up with the commodity giants. “The interesting factor will come as both margins and volumes decline in the traditional bunker trading houses. Will they be tempted to snap up some of these smaller suppliers to leverage their position to keep up with the global cargo trading houses?” he questioned.

He concluded, “In a normal market I would say this is a very good idea. As a former trader, the ‘in’ was always a specific port with a commercial advantage. You grow outwards from that with the customer. The question is: with the new fuels coming on stream, will the current niche port with a commercial advantage still have the same economic edge with a different fuel in the next 5 to 10 years?”

 

Source:
Ship and Bunker

Marine online bunkering

 

 

 

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