Asia/Pacific News
Singapore Bunker Suppliers Under Pressure
Under pressure from slowing trade levels, Singapore-based bunker suppliers including Chemoil Energy Ltd. (Chemoil) and Global Energy International (Global Energy) are restructuring their businesses, Singapore's Channel NewsAsia reports.
Chemoil CEO Thomas Reilly said the company is dealing with bad debt and payment defaults as ships are going out of service and shipowners are having trouble maintaining their businesses.
"It is more of a dangerous market," he said.
"Suppliers have to be a lot more selective with who they are doing business with."
Rising bunker fuel prices has made it harder for ship owners to make their payments, and Ship & Bunker reported earlier this year that there has been an increase in ship arrests at the port.
The situation is also hurting business for bunkering firms.
In just the past four months, four bunker suppliers have dropped out of the Singapore bunker market, with Bakri Trading Co (Asia) Pte Ltd, Hir Huat Trading Pte Ltd, Ocean Energy Bunkering Pte Ltd, and Sanko Oil (Pte) Ltd not renewing their accreditation.
Chemoil recently sold its fuel storage facility on Jurong Island, saying "structural changes" in the marine fuels market would favour companies able to quickly respond to volatility in volumes and margins, and has also announced plans to diversify into markets like biodiesel.
Global Energy, which now gets 60 percent of its revenue from Singapore, says it is looking at ways to expand its supply business overseas.
