IMO2020: Belships Bets on $198/mt+ HSFO / VLSFO Spread

Monday May 13, 2019

Belships says it is betting on spread of at least $198 between HSFO and IMO2020 compliant 0.50% sulfur VLSFO.

The Norwegian bulk ship operator has hedged 24,000 tonnes of bunkers for the full calendar year 2020, equivalent to the annual fuel consumption of about four vessels.

The $198/mt spread is a fixed price differential with monthly settlements.

The entire Belships fleet comprises of 19 Supramax and Ultramax bulk carriers.

With the global 0.50% sulfur cap coming into force from January 1, 2020, the current lack of demand makes pricing the new fuels extremely difficult.

That said, Belships’ bet is inline with early trades on Platts' Singapore FOB Marine Fuel 0.5% futures contract, which in February were placed at a $200/mt premium for VLSFO.