World News
Now is a Good Opportunity to Lock Up Cheap Bunkers for 2013
Singaporean securities company UOB-Kay Hian [SGX:UOKH] said Tuesday that the recent decline in oil prices "offers a good opportunity to lock up cheap bunker fuel for 2013," and that the turnaround in 2013 for the currently depressed container market is now "highly visible."
Asia-Europe rates are up 22 percent to $1,315 per twenty-foot equivalent unit (TEU) as of October 26, 2012, according to the Shanghai Shipping Exchange, and slot utlisation has risen to almost 100%.
"This confirms that carriers' capacity discipline remains intact, which will help to improve the sustainability of the [Asia-Europe] rate increase throughout 4Q12," UOB-Kay Hian said.
Compared to September 2012, it estimated that Asia-Europe capacity will decline 18% in 4Q12-1Q13.
Maersk has said it will be reducing its Asia-Europe capacity by 25% for the forth quarter of this year, and the Cosco, "K" Line, Yang Ming, and Hanjin Shipping (CKYH), and G6 alliances said they will cut capacity by 10-20 percent.
That, UOB-Kay Hian said, could well underpin rates throughout the slack season.
Last month A.P. Moller-Maersk CEO Nils Anderson said it was rejecting a price war and hiking its rates as it "just can't afford to go into a price war."
Key Bunker Prices More
| VLSFO | MGO | |||
|---|---|---|---|---|
| $/mt | +/- | $/mt | +/- | |
| Singapore | 624.50 | 1.00 | 732.00 | 8.50 |
| Rotterdam | 571.00 | 3.00 | 758.00 | 16.50 |
| Houston | 591.50 | 4.00 | 760.00 | 5.50 |
| Fujairah | 629.00 | 0.50 | 877.50 | 3.00 |
| Global 20 Ports Average | 637.00 | 0.00 | 819.00 | 3.00 |
| Global 4 Ports Average | 604.00 | 0.00 | 782.00 | 5.50 |
| Global Average Bunker Price | 688.00 | 2.50 | 879.00 | 1.00 |
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