Americas News
Fuel Efficiency is Driving Down Bunker Demand
Fuel efficiency measures have helped drive down bunker demand in the U.S. and Panama to near all-time lows, Platts reports.
Quoting market sources, Platts says Atlantic Coast and Gulf Coast bunker demand is at the lowest level in several years and some ports have been selling fuel on the retail market at a loss in recent weeks.
Benchmark grade RMG 380 bunker fuel fell to as much as a 50 cent per barrel discount on the Gulf Coast retail market relative to bulk RMG 380 in late March, although that had flipped back to a bulk discount relative to retail by April 4.
Bunker traders said shippers' efforts to reduce their fuel consumption, particularly the use of slow steaming which was said to save large ships 10 to 15 metric tonnes per day of fuel, helps account for the low demand.
"It's been like this ever since freight rates went in the dumper," an Atlantic Coast bunker trader said.
"If shippers are making good freight, they don't care about bunker costs."
A survey of ship owners last year found that slow shipping is almost universally understood as a new standard practice.
Suppliers said another factor pushing down bunker prices is increased competition at some ports, particularly Houston and New Orleans.
"You've got a lot of European guys coming into the market now who used to work through a broker, but are now coming in directly themselves," one trader said.
Refinery turnaround season, which pushes down the amount of refined products needing to be shipped, has also reduced fuel demand, while new limits on the sulfur content of fuel have encouraged fuel efficiency measures.
