EMEA News
Turkish Market Sees Doubling of MGO Demand After Med ECA Launch
The Turkish bunker market has reportedly seen a doubling of its MGO demand since the launch of the Mediterranean ECA this month.
MGO demand has doubled, VLSFO sales have dropped at the same time and ULSFO demand is steadily emerging, Mustafa Muhtaroğlu, owner of local supplier Energy Petrol, told Ship & Bunker.
A 0.1% sulfur ECA was established in the Mediterranean at the start of May, following a similar move in Northern Europe in 2015. The change means 0.50% sulfur VLSFO can no longer be used in the region on ships without a scrubber.
"Gasoil demand has doubled but avails are tight," Muhtaroğlu said.
"Turkey is a net importer of diesel, so the market needs time to balance.
"As for VLSFO, we still see demand from ships operating in the Black Sea and Marmara region or going to the Far East, so VLSFO will always be available but the volumes will be small."
The firm assumes demand shares will settle somewhere around 50% MGO, 30% ULSFO, 15% HSFO and 5% VLSFO.
Energy Petrol was the first Turkish supplier to make ULSFO available to its customers in preparation for the Med ECA, launching sales of the product in early April.
The firm sees increasing demand for the product, based on some owners preferring its higher viscosity at about 30-40 CST, but the need to import the product from Northwest Europe is keeping its discount to MGO prices relatively small.
"At the beginning the price difference between ULSFO and MGO is about $0-20/mt," Muhtaroğlu said.
"I predict the difference will be about $20-25/mt in time due to gasoil prices going up in the Med area, already cargo traders have increased premiums by $20/mt for gasoil."
The Med ECA will be among the topics addressed at the Turkish Bunker Association's 9th Istanbul Bunker Conference later this month.
The event will be held at Çırağan Palace on May 26-27, and will include speakers from organisations including IBIA, Moeve, Dan-Bunkering, Peninsula and XO Shipping.
For more information and to register for the event, click here.
