NSI Sees Increased Contract Sales Behind Falling Bunker Margins Around the World

by Ship & Bunker News Team
Friday July 17, 2020

An increase in marine fuel sales carried out by term contract may be behind falling spot bunker margins around the world, according to brokerage NSI.

In a recent note to clients, the company pointed to a recent decline in spot bunker margins at all of the main hubs, and suggested suppliers pushing for increased contract sales to guarantee regular business might be the cause, bringing increased competition for demand in the spot market.

"It seems there is always at least one supplier in port that is willing to discount the market to below any potential contract offers," Paul Hardy, head of business development at NSI, said in the note.

This competition between suppliers is bringing low prices to customers if they are flexible about which port to bunker at, according to NSI.

"The message for buyers is clear -- make the most of your tonnage, and keep an eye on additional bunkers-only locations," Hardy said.

"The market is in heavy flux, and those locations which traditionally have been uncompetitive are flipping dependent on the cargo positions of the suppliers.

"We are finding we are giving owners significant savings by offering multiple options outside of their usual lifting patterns."