World News
Plunging Oil Behind Uptick in Ship Speeds
Low bunker prices due to the collapsing cost of oil has led to a small increase in ship speeds, which has for years been kept in check though slow-steaming, reports Barron's Asia.
Average bulk carrier speeds over the past three years have reportedly declined to 7.1 knots from 8.6 knots, but the sharp drop in bunker prices was said to have been behind a small reversal recently up to 7.4 knots.
It was previously predicted that the falling price of oil would unlikely cause companies to rethink slow-steaming practices.
Lars Mikael Jensen, CEO for Maersk Line's Asia Pacific region, had said that cheap oil would have to persist for some time before companies would consider speeding up their ships.
It is thought that a fear of flooding the market with latent capacity is part of the reason why shippers are holding back, as making ships run faster and more available at ports would only add to supply.
Prices for IFO380 in a number of key global ports, including Singapore, Fujairah, Gibraltar, and Houston, have fallen over $100 per metric tonne (pmt) over the last month alone.
It was previously suggested that slow-steaming could be keeping approximately 7 percent of the global fleet employed.
Key Bunker Prices More
| VLSFO | MGO | |||
|---|---|---|---|---|
| $/mt | +/- | $/mt | +/- | |
| Singapore | 502.00 | 4.50 | 602.50 | 2.50 |
| Rotterdam | 468.50 | 3.00 | 609.00 | 7.00 |
| Houston | 470.50 | 4.50 | 608.00 | 8.00 |
| Fujairah | 494.50 | 8.50 | 706.00 | 6.00 |
| Global 20 Ports Average | 528.00 | 4.00 | 703.00 | 3.00 |
| Global 4 Ports Average | 484.00 | 5.00 | 631.50 | 2.00 |
| Global Average Bunker Price | 567.50 | 2.50 | 750.00 | 5.50 |
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