INTERVIEW: Bunker Trading Firm BlackCoral Energy Plans Expansion in 2022

The firm is looking to expand beyond its Monaco base. File Image / Pixabay

Marine fuels trading firm BlackCoral Energy, founded two years ago, is seeking to expand beyond its Monaco base this year.

The firm was set up by former Dan-Bunkering executives Jesper Christensen and Christoph Riecken in early 2020, and the two were joined by bunker trader Nuno Manaia a few months later. Having built up its presence in the market since then, the firm is now ready for expansion, Christensen said in an interview with Ship & Bunker.

"In a way, we still feel like the new name in the market, but at the same time, we also feel that we've been here for a while and see ourselves as relatively established already," he said.

"We've had a good reception in the market and from suppliers, and that helps us to feel quite established at an early stage with credit lines in place and so on."

Trading takes up 'by far the majority' of the company's operations, but it occasionally acts as broker instead if the client requests that model.

The firm is now planning to hire more staff to expand its trading team.

"We've had a plan from the beginning to get ourselves established, get our feet on the ground here in the Med and then expand, and we feel we are ready for that next chapter now," Christensen said.

New Offices

That expansion will also entail opening new offices.

"The biggest step where we are looking to expand is with new offices, in all the main bunkering hubs," Christensen said.

"We are looking to expand to the US, Dubai and Singapore; not everything tomorrow, of course, but at a sensible pace."

The first new office is likely to be opened sometime this year, and more are to follow within the next three years.

"We think the first would probably be the US or Dubai, as we see some of the biggest opportunities there," Christensen said.

"At the moment, Singapore is extremely tough for bunker trading; it's extremely competitive, and the margins are low, so that is not our priority.

"We are trying to go for the markets where we feel we can make a difference, and then it of course depends on where you can build the right team."

Challenging Market

The firm is choosing to expand at a time of increased uncertainty for smaller back-to-back traders, with profits under pressure, access to credit becoming more difficult and the overall pool of conventional bunker demand shrinking because of fuel-efficiency measures and alternative fuels at a greater pace than growth in global tonne-mile demand can outweigh. Traders report that margins have generally not risen with bunker prices in the past 12 months in the way they might have been expected to in previous years.

But BlackCoral is confident that opportunities can still be found in today's market, Christensen said.

"It has been more or less as it has been for the last 10, 12 years; it's tough out there," he said.

"There's a lot of people competing for the cake, and sometimes you feel that you're running into a wall more than others.

"It goes up and down, but I definitely feel that if you have the right people, if you're efficient, if you focus on the right things, there are some opportunities out there.

"The big firms have the economies of scale for certain things, but in my experience they can become relatively inefficient in certain areas."

The firm is finding ways of making existing credit lines go further, Christensen added.

"It's definitely a challenge. I think we've been very well received by the suppliers, we have very nice credit lines around but obviously when the prices are now double what they were not long ago, then the credit lines go much faster," he said.

"And the suppliers don't say, 'Oh, the market is now double what it used to be, so we'll just double your credit line'.

"You just need to make it work, you need to find other ways and this is of course where you need to be very efficient in your business.

"One of the good things about being in Monaco is that you can have access to some liquidity."