Marine fuel quality issues could likely escalate once the world starts to recover from the coronavirus pandemic while continued margin pressures may hurt bunker suppliers more, necessitating the industry to stay vigilant and adapt themselves post the International Maritime Organization’s global sulfur mandate, industry sources said.
Despite volatility in some commodity markets, marine fuel prices are already rising, tracking in part gains in crude oil prices.
In Singapore, delivered marine fuel 0.5% sulfur prices averaged $658.76/mt in January 2020, when the IMO sulfur limit rule for marine fuels was implemented. Prices of the grade ebbed to an average of $235.71/mt in April 2020 and averaged $441.35/mt in January, S&P Global Platts data showed.
The IMO’s global sulfur limit for marine fuels was supposed to usher in a sea change for the bunker industry in terms of the magnitude of switch toward cleaner fuels.
One of the key concerns was continued bunker fuel quality issues, with the market anticipating stability and compatibility as pressing worries as many blending recipes emerged due to IMO 2020.
“There have been fewer quality issues than many analysts predicted, but this may have been partly masked by the pandemic and the depressed oil price,” bunker company KPI OceanConnect said in a statement Feb. 16.
These challenges may rear their head once the world starts to recover from COVID-19, distillate demand increases in other industries, and if unscrupulous suppliers start using cheaper components for blending, it said.
“Yes, it [IMO 2020] went well … honestly very few issues and most owners are dealing with many less claims than they did prior to 2020 … from a quality control point of view, because of great preparation and excellent research work done by labs etc.,” Adrian Tolson, director at global research and consulting company BLUE Insight, told Platts recently…