World News
Bunker Price Slide Offering Little Relief as Narrowing Margins Mean Carrier Lines Face Tough Fourth Quarter
Despite bunker prices sliding to multi-year lows, operating margins for deepsea carriers are narrowing and carrier lines are preparing themselves for a tough fourth quarter, TheLoadStar reports.
According to Alphaliner data, margins fell to 2.4 percent in the second quarter from 5.3 percent in the first quarter, while the benefit that cheaper bunkers has provided has now mostly been discounted to shippers.
Meanwhile, separate reports say that the amount of idle containership capacity has reached a year-long high at 500,000 TEU.
The number of idle ships has reportedly increased across all segments apart from the 2,000 – 3,000 TEU range.
"The lacklustre demand is expected to worsen further in October: linked to the end of the peak season, more planned sailing cancellations and upcoming service suspensions are expected to further push up idle vessel figures," the Alphaliner report said.
Alphaliner also added that the continued decline of freight rates following ineffectual general rate increases in July and August "bodes poorly for carriers' earnings prospects in the third quarter."
On a ranking of carrier lines margin profitability, intra-Asia carrier Wan Hai reportedly topped the list with 11 percent.
Wan Hai is reportedly followed by Maersk Line with 10 percent and CMA CGM with 9 percent.
At the bottom of the list is Japan's Mitsui O.S.K. Lines (MOL), who reportedly attributed its -2.1 percent margin to a weak market.
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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