World News
Bunker Prices at a "Tipping Point" for Slow Steaming
Bunker prices are reaching a "tipping point" for shipping industry decision makers considering whether or not to continue with slow steaming, supply chain industry magazine Area Development reports.
According to the report, bunker prices are reaching a point where it may be cheaper for carriers to operate fewer ships at faster speeds than to maintain larger fleets and save on fuel costs through slow steaming.
This week, the International Energy Agency (IEA) predicted that crude oil prices will recover modestly and are not likely to recover to $100 per barrel in the medium term, but bunker prices are not certain to remain low in the long term.
Any surge in fuel costs would have a significant, negative impact on shipping companies choosing to speed up.
Furthermore, operators have adapted fleets and ordered new ships based around the practice of slow steaming.
In December, Maersk Line's CEO for Asia Pacific said "we designed the network on [the basis of] slow steaming."
Slower sailings also allow the shipping industry to use its excess capacity, says the report, whereas fast steaming may mean vessels are laid up or freight rates are forced down.
In addition, carriers would need to renegotiate slots at terminals across their networks at a time when congestion is causing problems at key ports.
Last month, OOCL director of trades Stephen Ng said that "lower fuel prices should make the decision by carriers to speed up to catch up delays a bit easier."
Key Bunker Prices More
| VLSFO | MGO | |||
|---|---|---|---|---|
| $/mt | +/- | $/mt | +/- | |
| Singapore | 548.00 | 0.50 | 677.50 | 2.00 |
| Rotterdam | 513.00 | 0.50 | 649.00 | 3.00 |
| Houston | 544.50 | 2.50 | 675.00 | 4.00 |
| Fujairah | 541.50 | 2.50 | 744.00 | 3.50 |
| Global 20 Ports Average | 572.00 | 2.50 | 758.00 | 2.50 |
| Global 4 Ports Average | 536.50 | 1.50 | 686.50 | 3.00 |
| Global Average Bunker Price | 624.00 | 2.50 | 801.00 | 3.50 |
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