IMO2020: Expect Bunker Prices to Rise 30-40%, says KPI Bridge Oil

Friday May 31, 2019

KPI Bridge Oil is anticipating a price increase of 30-40%, depending on region and local availability, as a result of the upcoming IMO2020 global sulfur cap on marine fuel.

With Ship & Bunker data indicating IFO380 in the major bunker hubs is currently around $400/mt, and the global HSFO average as a whole is around $450/mt, the trader's prediction translates to a relatively conservative $160-180/mt premium for bunker buyers next year.

Drewry Maritime Research, in contrast, this week said it expects the average price premium of complaint LSFO over HSFO to be around $240/mt in 2020.

Still, KPI says the price hike will cause a shortage of available credit in the market, a situation it has responded to by recently boosting its revolving credit facility capacity by more than 60%.

While it did not discuss what this translated to in dollar terms, the wider Bunker Holding Group - of which KPI is a member - recently lifted its credit capacity to $2.5 bn.