Asia/Pacific News
Rising Bunker Prices Hurt Malaysian Line
Malaysia's Shin Yang Shipping Corp. Bhd. (Syscorp) is facing an environment in which container shipping is not profitable due to rising bunker prices that come on top of weak charter rates, the company's financial controller Richard Ling told Malaysian newspaper The Star.
Ling said bunker diesel prices have risen to more than $100 per barrel, from between $90 and $95 in the first half of last year.
"The bunker fuel cost has gone up too much and is now on the high side," he said.
Ling said fuel makes up 30 to 40 percent of shipping operational costs for Syscorp, which operates about 300 vessels including chemical tankers, container ships, tugs, and barges.
The high fuel prices mean container shipping is not turning a profit despite an increase in cargo volumes.
Ling said business is better for the company's three crude palm oil (CPO) tankers and two CPO barges, which serve routes between Malaysia and Southern China.
"The charter rates for CPO transportation are okay because of less competition in this sector," he said.
"CPO transportation is profitable."
Syscorp also is focusing on building larger vessels at its shipyard.
As of Wednesday, marine gas oil (MGO) was selling at $1,007 per metric tonne (pmt) at Port Klang, Malaysia, compared with $920.50 pmt in Singapore, according to Ship & Bunker data.
