Scrubber-fitted ships nearly double as fuel spread settles at $118 per MT
As the lion’s share of the world fleet replaced high-sulphur fuel oil (HSFO) with low-sulphur fuel oil (LFSO) as a means of propulsion to be compliant with the IMO 2020 global sulphur cap which came into force on January 1, 2020, overall bunker sales rose in the world’s by far largest bunkering hub: Singapore.
Total bunker sale volumes grew by 5 percent in 2020 and have continued to climb in the first two months of 2021 (+2.7 percent y/y). An indication of the shipping industry’s ability to deliver all the way through the pandemic.
One quarter of total bunker sales in February 2021 was HSFO, a share that has only risen since January 2020, when no more than 17 percent of sales were fuel oil for ships with a scrubber installed.
From the get-go, the debate was all about the bunker price spread and therefore the choice between HSFO and investing in a scrubber or using LSFO to comply with the new sulphur regulation. As 2021 arrived and the crazy 2020 was nearing an end, the next normal seemed to be in the making.
“The lowest price spread can be found on the US west coast while the largest spread can be found in the Middle East. In between, you have USD 118 per MT as the most common spread. That’s the price spread you will find in Singapore,” said Peter Sand, BIMCO’s chief shipping analyst.
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22nd March 2021