World News
Fuel Incompatibility to Put Paid to "Detour Trades"
Getting a tanker to deviate from an agreed route to profit from higher cargo prices will become more difficult under the International Maritime Organisation's new sulfur rule on bunker fuel as ships will not be able to rely on uniform fuel grades.
The rule means that, certainly in the short to medium term, a lack of clarity on the make up of low sulfur fuels will make it difficult to mix low sulfur fuel grades.
"If you're mixing 0.5s and less-than 0.5s, and there's carbon residue in the fuel, the risk will be worth considering," fuel quality expert Rudolph Kassinger was quoted as saying by business news provider Bloomberg.
Without the assurance of being able to bunker the right type of fuel for your ship when it deviates from its initial route increases operational risk.
According to the report, deviational trades are lucrative as they can deliver large profits to traders.
From the start of 2020, all ships must burn 0.5% sulfur fuel or have scrubbers installed so they can achieve an equivalent method of compliance.
Key Bunker Prices More
| VLSFO | MGO | |||
|---|---|---|---|---|
| $/mt | +/- | $/mt | +/- | |
| Singapore | 647.00 | 8.50 | 779.00 | 29.50 |
| Rotterdam | 608.00 | 11.00 | 764.50 | 24.50 |
| Houston | 636.50 | 8.00 | 807.50 | 5.00 |
| Fujairah | 649.50 | 4.00 | 888.50 | 11.50 |
| Global 20 Ports Average | 665.50 | 6.50 | 870.50 | 14.50 |
| Global 4 Ports Average | 635.50 | 3.50 | 810.00 | 17.50 |
| Global Average Bunker Price | 725.00 | 2.50 | 925.50 | 8.00 |
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