World News
CMA CGM: Q1 Bunker Costs Rise 11% on IMO 2020
CMA CGM today said its Q1 bunker bill rose 11% following the January 1, 2020 introduction of the IMO 2020 rule.
The box shipping giant's total spend on bunkers and other consumables for the three-month period was a reported $975.3 million, compared to $875.3 million for the period in 2019.
The company opted to use more expensive 0.5%S fuel oil for compliance, the cost of which it said was passed onto customers.
"Additional costs resulting from this new regulation have been taken into account through the application or adjustment of fuel surcharges on a trade-by-trade basis," it said.
"Indeed, from January onwards, CMA CGM has implemented a full pass-through pricing policy in order to achieve full compensation of the additional costs from its client."
The increase in fuel cost is less than many had anticipated it would be, with industry talking heads last year generally agreeing that IMO 2020 was expected to push up bunker costs 20%.
However, due to a combination of disagreements among key oil producers over pricing, and global measures taken to address the COVID-19 pandemic, bunker prices in key ports went from highs of almost $700/mt in early January to end the quarter at around $270/mt - the lowest price they have been for several years.
The French container line has recently been waiving its low sulfur surcharge as a result.
Key Bunker Prices More
| VLSFO | MGO | |||
|---|---|---|---|---|
| $/mt | +/- | $/mt | +/- | |
| Singapore | 565.50 | 4.50 | 678.50 | 4.50 |
| Rotterdam | 512.00 | 3.50 | 676.00 | 9.00 |
| Houston | 552.00 | 3.00 | 682.00 | 4.00 |
| Fujairah | 555.50 | 7.50 | 753.00 | 1.50 |
| Global 20 Ports Average | 583.50 | 4.00 | 762.50 | 2.50 |
| Global 4 Ports Average | 546.50 | 4.50 | 697.50 | 2.50 |
| Global Average Bunker Price | 632.50 | 2.00 | 811.00 | 1.50 |
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