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Owners brace for a year of high bunker bills

Image Credits: Splash247

Repost: Shipowners have been warned they will need to relook at fleet deployments plans for the year ahead with the industry braced to shell out far greater sums in bunker costs.

Bunker prices, already the highest they’ve been since 2012, are widely tipped by many senior executives polled by sister title Splash Extra to remain at severely elevated levels all year, leading to a greater swathe of the world merchant fleet deciding to slow steam where possible and forcing the hand of many vintage units towards demolition.

The price for Singapore very low sulphur fuel oil (VLSFO) bunker fuel has jumped 6% so far this year from $640 per ton to $680 yesterday.

“Elevated bunker prices are here to stay, and the VLSFO-HSFO fuel spread is likely to remain wide. It’s good for scrubbers,” said Randy Giveans, senior vice president of equity research at investment bank, Jefferies.

“We expect this will keep average speeds relatively low and will also incentivise scrapping of the older, less fuel-efficient fleet,” Giveans said, adding: “In this high-priced bunker fuel environment, you want eco-ships, ideally with scrubbers, and we expect those vessels to massively outperform anything over 10 to 15 years of age.”

Elsewhere, in the monthly subscription title there’s regular markets commentary, the best of the shipping analyst coverage, a curtain raiser for the Year of the Tiger while this month’s in-depth feature looks at whether banks will charge more for lending to dirtier ships.


Marine Online Media Team
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