Merger interest on the rise. Image Credit: Pixabay
The dire economic outlook for oil and shipping looks to have boosted interest in mergers and acquisitions opportunities within the bunker industry.
Two separate bunker players have told Ship & Bunker they are actively looking to make acquisitions, and at least one unrelated company is understood to be close to a deal to sell up.
"These are difficult times so for those that can, it's a good time to buy," a business development manager with an Americas-based bunker company told Ship & Bunker.
While not all shipping sectors have been affected by measures taken in response to the COVID-19 pandemic, Ship & Bunker last month assessed that short-term marine fuel demand has dropped around 8% while veteran marine fuels consultant Robin Meech sees global bunker demand for 2020 as a whole down 7% vs 2019.
With EIA this week lowering its 2020 oil price forecast over 20% from the outlook last month, and Thursday's historic production cut failing to lift prices, bunker prices also look set to be depressed at multi-year lows for some time.
"We are at the beginning of what looks like it will be a very difficult time for the industry, so it really is no surprise that some people are now looking to exit the market gracefully while they still can," the source said.
