• 2022 June 3 16:13

    Marine fuel prices top $1,000 per ton; ships with scrubbers save $300 per ton - American Shipper

    The price of very low sulfur fuel oil (VLSFO) — the 0.5% sulfur content fuel that powers most commercial ships — just exceeded the price spike that occurred soon after the start of Russia’s operation in Ukraine, according to American Shipper.

    According to data from Ship & Bunker, the average VLSFO price at the world’s top 20 bunker (marine fuel) ports was $1,042 per ton on Wednesday, double its price a year ago. (The previous record was $1,040.50 per ton on March 9.)

    In January 2020, the IMO 2020 rule required ships to switch to VLSFO (or even more expensive marine gas oil) unless they had exhaust gas scrubbers or burned liquefied natural gas. Ships with scrubbers could continue to use cheaper high sulfur fuel oil (HSFO) with 3.5% sulfur content.

    According to Ship & Bunker data, the average top-20-ports spread between VLSFO and HSFO jumped to a record $314.50 per ton on Jan. 7, 2020, amid the IMO rule transition. The spread then collapsed during the first year of COVID, sinking to a mere $45 per ton on Nov. 2, 2020.

    HSFO known as IFO380 averaged $741.50 per ton on Wednesday at the top 20 ports. That put the VLSFO-HSFO spread at $300.50 per ton.

    The situation is even more extreme at certain hubs. The VLSFO-HSFO spread at the key Asian bunkering hub of Singapore was $454.50 per ton.
    At these spreads, scrubber investments are highly profitable.

    In container shipping, fuel costs are passed along to cargo shippers with a lag effect via bunker adjustment factors (BAFs). These BAFs will be tacked on top of already record-high contract rates. The Q3 2022 BAFs of CMA CGM, Cosco, Evergreen and OOCL announced on Thursday jumped an average of 38% from this quarter and up 78% year on year.

    Many of larger container ships handling longer-haul runs have scrubbers. According to Clarksons Platou Securities, 75% of on-the-water container ships with capacity of 17,000 twenty-foot equivalent units or more have scrubbers, as do 50% of 12,000- to 16,999-TEU ships (with significant further retrofits planned).

    Lars Jensen, CEO of Vespucci Maritime, pointed out how ocean carriers with scrubber-equipped ships could profit from the spread.

    Jensen recently wrote, “Most bunker fuel surcharges are linked to VLSFO price. This, de facto, means if a carrier has scrubbers on the vessels and BAFs linked to VLSFO, it is effectively getting paid by shippers for the high cost of VLSFO while at the same time buying the IFO380 [for] less and pocketing the difference.”

    The current dynamic creates a huge advantage for owners that either have ships with scrubbers allowing them to burn HSFO, or have fuel-efficient “eco” designs allowing them to burn less VLSFO or HSFO.

    In shipping sectors that are making money, like dry bulk and product tankers, owning scrubber-equipped and/or eco ships adds to profits. In a sector that’s losing money, like very large crude carriers (VLCCs), owning scrubber-equipped and/or eco ships reduces cash bleed.

    Clarksons estimated on Thursday that an older non-eco, non-scrubber VLCC would hypothetically lose $7,400 per day in the spot market. In comparison, an eco, scrubber-equipped VLCC would earn $19,200 per day. Even in the best case, most VLCCs are still losing money; Clarksons put the all-in breakeven rate for a 5-year old VLCC at $34,000 per day.

    In an example of a profitable sector, Clarksons put Thursday’s spot rate for non-eco, non-scrubber medium-range (MR) product tankers — the ships that carry gasoline, diesel and jet fuel — at $39,700 per day. Eco, scrubber-equipped MRs were at $50,100 per day.

    Clarksons lists the breakeven for a 5-year old MR at $18,000 per day. These ships are raking in cash, especially those saving on fuel.


2024 July 13

15:47 €11 million for 1-MW Dynamic Electrolyser Unit
14:11 PSA Group and Singapore mitigate impact of global supply chain disruptions
12:23 NREL: Offshore wind turbines offer path for clean hydrogen production
10:06 MMMCZCS releases a technical, environmental, and techno-economic analysis of the impacts of vessels preparation and conversion

2024 July 12

18:00 Qingdao Port International to buy oil terminal assets for $1.30 billion
17:36 Saipem signs framework agreement with bp for offshore activities in Azerbaijan
17:06 AG&P LNG and BK LNG Solution signs an agreement to bring BKLS's first LNG spot cargo into China
16:31 Allseas removes final Brent platform with historic lift
15:58 ZPMC Qidong Marine Engineering launches the world’s largest FPSO bow section for Petrobras
15:25 MSC acquires Gram Car Carriers
14:58 ABP boosts marine capability through pilot launch upgrades
14:34 Fincantieri receives ISO 31030 attestation from RINA
13:52 Second new dual-fuel fast Ro-Pax ferry to enter service for Balearia after successful sea trials
13:24 ADNOC deploys AIQ’s world-first RoboWell AI solution in offshore operations
12:59 ABS issues AIP for new gangway design from Pengrui and COSCO
11:38 Port of Long Beach data project receives $7.875 mln to speed goods delivery
11:15 ZeroNorth to provide its eBDN solution on 12 barges operated by Vitol Bunkers in Singapore
10:46 Seatrium secures customer contract agreement from Teekay Shipping for the repairs and upgrades of a fleet of vessels
10:14 Liquid Wind and Uniper enter into strategic partnership to accelerate the development of eFuels

2024 July 11

18:06 Yanmar and Amogy to explore ammonia-to-hydrogen integration for decarbonized marine power
17:36 COSCO Shipping receives first 7500 CEU LNG dual-fuel PCTC
17:06 Monjasa adds two tankers and targeting West Africa’s offshore industry
16:34 Biden administration announces funding for 15 small shipyards in 12 states
16:10 Iran's Ports and Maritime Organization attracts nearly $1.7bln of investment in ports, maritime sector
15:52 The added value of Chinese port cities up to US$869.05 bln in 2023
15:25 HD Hyundai becomes first Korean shipbuilder to sign MSRA with US Navy
13:41 NovaAlgoma orders the world’s largest cement carrier
13:21 Steerprop selected to provide comprehensive propulsion systems for world's largest cable-laying vessel
12:41 Integrated Wartsila propulsion package supports decarbonisation and efficiency goals for James Fisher tankers
12:36 MABUX: Bunker Outlook, Week 28, 2024
12:10 Valencia Port Authority signs an agreement with C.N.E. Hydrogen and Fuel Cells to promote hydrogen research
11:41 Long Beach, Los Angeles ports partner for zero-emissions future
11:16 Iraq to establish maritime single window for major ports
10:46 James Fisher completes its largest decommissioning project to date

2024 July 10

18:00 MET Group secures long-term US LNG source from Shell
17:36 bp, Mitsui, Shell and TotalEnergies join to ADNOC’s Ruwais LNG project
17:06 HD Hyundai Samho extends a pier at its shipyard in Yeongam, South Jeolla
16:45 Panama Canal plans new $1.6bn reservoir to address water shortages
16:25 Ocean Power Technologies signs agreement with AltaSea to advance wave power projects
15:52 WinGD completes type approval testing for new short-stroke engine size
15:32 PIL has the most reliable schedule among the top 12 container lines in Q2 2024
14:56 Fincantieri celebrates the keel laying of the first ultra-luxury vessel for Four Seasons Yachts at the shipyard in Ancona
14:20 Ningbo-Zhoushan port sees 8.4% container volume growth in H1
13:43 MOL announces delivery of bulk carrier Green Winds, 2nd vessel equipped with wind challenger hard sail propulsion system
13:23 BHP, Pan Pacific Copper and Norsepower deploy wind-assisted propulsion technology on vessel that set sail this month
12:43 MEYER WERFT to build Disney Wish-сlass сruise ship for Oriental Land Company to operate in Japan
12:25 South African Maritime Safety Authority try to rescue a cargo ship that ran aground on Cape west coast
11:50 SAAM Terminals partners with Next Port AI to boost digital solutions in ports
11:10 HD Korea Shipbuilding launches translation service for foreign workers
10:41 Kelvin Hughes awarded second phase VTS Radar System contract by Port of Marseille Fos
10:07 Hengli Group to invest an additional 9.2 billion RMB to build the Hengli Heavy Industry Industrial Park
09:46 X-Press Feeders starts Europe’s first feeder network powered by green methanol

2024 July 9

18:04 A historical replica of the Russian frigate Shtandart was denied access to Finistère ports
17:26 Freight rates for VLCC from the US to the key Asian market down more than 20 per cent since late May
17:06 Boskalis to acquire all remaining shares in Smit Lamnalco
16:42 Gautam Adani plans to build ships at Mundra Port
16:19 Singapore port congestion threatens to gum up global trade
15:56 Eastern Shipbuilding awarded contract to construct four escort tugs for Saltchuk
15:39 Ports in Texas assess the damage from Hurricane Beryl
14:12 Berge Bulk announced the successful installation of four emissions-reducing Rotor Sails on the Valemax ore carrier
13:54 Wartsila simulators to support Singapore's Wavelink Maritime Institute with preparing crew for shipping's sustainable fuels
13:24 MPA and NYK form partnership to advance maritime sustainability, digitalisation and manpower development
12:43 H-LINE Shipping takes delivery of LNG-fueled 7,000 CEU car carrier
12:12 Value Maritime to decarbonise two ForestWave general cargo sister ships
11:42 DNV rules create new in-operation class framework, enable hydrogen vessels and on-board carbon capture
10:45 Danaos orders five container vessels with an aggregate price of $509 million
10:14 GTT Strategic Ventures invests in Seaber.io, specialising in the digitalisation of bulk shipping

2024 July 8

18:02 Port of Hamburg named "Best Global Seaport"
17:30 Amsterdam will reduce number of sea cruises by half in 2026 and aims for the terminal to leave the city in 2035
17:10 Pantheon Tankers ship damaged after hitting reef off the Cayman Islands