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Analyst: Box Shippers are the "Biggest Beneficiaries" of Low Bunker Prices
Container lines are benefiting more from the recent drop in bunker prices than many have assumed, according to an analyst for Jefferies, JOC reports.
"The biggest beneficiaries of a lower oil price are container shipping companies, which would benefit directly as bunker is not a passed through cost in container shipping," said analyst Bonnie Chan.
While many box shippers include bunker adjustment surcharges, Chan suggested the link between bunker prices and earnings for box shippers is less straightforward.
Freight rates fell in 2011 despite an approximate 30 percent rise in bunker prices and later, during the first half of 2012 freight rates rose despite a drop in the bunker price.
"Many shipping companies have also moved to all-in freight rates on their annual contracts, which means any cost savings would be kept by the companies," added Chan.
But Maersk Group and COSCO may not see a huge benefit at group level as results will be hampered in 2015 by their oil business and dry bulk operations respectively.
Maersk Line recently said it would pass on savings to customers via its bunker adjustment factor, and will not make any long term profit from falling bunker prices.
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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