Shipowners expect consolidation to create stronger counterparties as bunkering volumes are growing, but shifting market dynamics are forcing suppliers to adjust business models or even exit
SINGAPORE’s bunker sector, the world’s largest, is haemorrhaging supply companies as a combination of tightened regulatory oversight and fierce competition drives margins lower despite rising overall volumes.
Three of Singapore’s top 10 bunker suppliers by volume — Universal Energy, Panoil Petroleum and Transocean Oil — have been forcefully ousted after their licences were either revoked or not renewed by the Maritime and Port Authority of Singapore. They were found to have severely aerated bunkers, to have made unauthorised alterations on bunker tankers’ pipelines and to have falsified records respectively. A similar fate was meted out to smaller players Seaquest Tanker, Vermont UM and AC Oil.
Others have left voluntarily amid increasingly difficult market conditions that have forced established players to re-examine their business models.
CMA CGM's new LNG-fuelled ships could prove to be a turning point for green energy use in shipping
NEWS that CMA CGM has bitten the bullet and gone full steam ahead with plans to equip its 22,000 teu newbuildings with engines burning liquefied natural gas took many by surprise. But has the decision finally solved the long-standing ‘chicken and egg’ standoff that has stunted the development of this alternative fuel?
Without the necessary infrastructure in place, the argument from carriers has been that any such switch to LNG would not be feasible. On the flipside for those looking to invest in LNG bunkering facilities, the absence of LNG-powered ships in the deepsea trades made any move to establish LNG bunker facilities equally futile.
However, DNV GL’s Martin Wold, a senior consultant within its environment advisory, says that endorsement from a household boxship operator could prove the catalyst for change.
Asset-heavy industry, which requires massive long-term investment, is perhaps safer in state-owned hands
THE recent default of Dandong Port Group on its Yuan1bn ($151m) bond has stoked concern over the solvency of the broader Chinese port industry. But fear not — it was just an individual case.
Having handled nearly 2m teu in 2016, the port — situated in Liaoning province in northeast China, right next to the North Korean border — ranked 81 in Lloyd’s List’s latest top 100 box ports. But containers only accounted for about 25% of Dandong’s total throughput, of which more than 60% was dry bulk cargoes.
Of course, DPG’s failure to meet its debt payment has reflected a string of problems that can also be found at other Chinese port companies, namely the excessive regional competition and hefty financial burden incurred from aggressive expansion efforts in building new facilities.
|Wilbur Ross fully divested from Diamond S and is almost out of Navigator|
|Shell has inked a bunker barge charter deal with Q-LNG Transport|
|It will take six months for Maersk to recover after its cyber attack|
|CSSC has offered lease financing to Dynagas for two FSRUs|
|Maersk has won regulatory approval from China for Hamburg Süd takeover|
|DSME managed to stay profitable in the third quarter|
|Bunker supplier Aegean Marine is warning of $3.4m-$4.4m losses for the third quarter|
|Korea and Japan set for biannual meetings to bolster their shipbuilding industries|
Start your day with the most important news and analysis from our award winning journalists. The Lloyd's List Daily Briefing is your daily digest of essential shipping news brought to you today by Lloyd's List editor, Richard Meade.
Our real-time news and deep-dive analysis of the global shipping markets will help you:
Sign up to receive the Lloyd's List Daily Briefing.
Helen Specialises in
+ 16 years experience
Janet Specialises in
+ 32 years experience