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13 Mar 2014
Bunker buyers are preparing for July 1 this year, when the sulphur limit in Europe's emission control areas (ECAs) falls from 1.50% to 1.00% in line with MARPOL Annex VI regulations.
Demand for the lower sulphur bunker fuel is expected to increase significantly in the last few weeks before the new limit enters into force.
As reported on Bunkerworld in early April, enquiries for 1.00% sulphur intermediate fuel oil (IFO) grades have begun to trickle into key European bunker markets.
"I am aiming for 1% purchases from the first of June," Gordon van der Brugge, Manager Bunkers & Lubricants at Flinter, a Dutch ship management and ship owning company, told Bunkerworld in mid-April.
Since then, a few other European ship operators have told Bunkerworld they plan to switch in early June as well.
Buyers are not sure if it will be difficult to source 1.00% IFOs.
Supply in the Amsterdam-Rotterdam-Antwerp (ARA) region has so far been very limited, a view confirmed by a leading independent supplier in the region. He said it was "difficult to get" hold of 1.00% bunker fuel at the moment.
A European bunker buyer told Bunkerworld this week that was still the case, with only one oil major appearing to offer the product in the ARA, and only for large stems.
According to Robin Meech of Marine and Energy Consulting Ltd, global demand for 1.00% low sulphur fuel oil (LSFO) will initially be around 11 million metric tonnes (mt) in 2010, doubling to around 20 million mt in 2011 due to the ECAs.
Initially demand will come from vessels sailing in the Baltic and North Sea ECAs in Northern Europe, but will increase enormously when the North American ECA takes effect from August 2012.
According to Meech, global demand for 1.00% LSFO will more than quadruple to around 48 million tonnes by 2014.
After 2014, the global maritime community will be facing even more stringent regulations as the ECA sulphur limit falls to 0.10% at the start of 2015.
The latest Bunkerworld Poll asks:
Will there be adequate supply of 1.00% sulphur fuel oil for the ECAs?
1- will is very small in quantity
2- causes a lot of engine problems
3- due to its high pour point there will be higher operating costs
PRODUCT AVAILABLE IN ROTTERDAM/ CI DIP AND PAY IN SELLER EX-SHORE TANK.
Russia D2 50,000-150,000 Metric Tons FOB Rotterdam Port.
JP54 5000,000 Barrels per Month FOB Rotterdam.
JA1 Jet Fuel 10,000,000 Barrels FOB Rotterdam.
D6 Virgin Fuel Oil 800,000,000 Gallon FOB Rotterdam.
(Mr.) Vladislav Yakov