Asia/Pacific News
Singapore Trader: Low Prices Will Boost Bunker Trading
Low bunker prices offer benefits to the bunker trading industry, IHS Maritime 360 reports.
According to a trader at Singapore's Equatorial Marine Fuel Management Services Pte. Ltd., falling bunker costs will mean improved cash flow for shipping companies.
In turn shipping companies will look to capitalise on current bunker prices.
"We (bunker traders) are dependent on the financial health of the overall shipping market," said the trader.
Traders can expect an increase in forward deals as companies seek to lock in low prices for the future.
Traded bunker volumes are likely to rise in Singapore during the second and third quarters as forward contracts mature, the trader said.
But competition for volumes will become fierce in a lower price environment, he added.
"If any supplier that a buyer chooses in Singapore gives the same services, there will be no service quality differentiation and this would cause fierce competition for volume."
Bunker trading margins have also been improving since the collapse of OW Bunker in November, said the trader.
