Goel expects to see a rally in bunker demand before long. Image Credit: GP Global
Global bunker demand may start to rally again in the third quarter of this year after the COVID-19 slump, according to marine fuel supplier GP Global.
The company has seen dips in demand in the UAE and Singapore this year, but the market may start to turn soon, according to Prerit Goel, its joint managing director.
"We are yet to see major signs of improvement," Goel said in an interview with Ship & Bunker this week.
"However, we expect demand to shift in the third quarter of the year.
"At GP Global, we have increased our barges and back to back traders, so we have witnessed levels of growth."
Mixed Reception in Asia
Growth elsewhere in Asia has made up for weakess in Singapore, Goel said.
"Although we have experienced a slight downturn in the port of Singapore, we have nonetheless benefitted from an increase in volume in China and Korea which has filled that void," he said.
We anticipate normal volumes to resume over the course of the year.
"Having recently hired a strong new team in Singapore, we anticipate normal volumes to resume over the course of the year."
GP Global has been on something of a hiring spree in recent months, adding a series of traders in its UAE and Singapore offices, recruiting Max Carnegie-Jones to lead its bunkering business in the UK and Gene Owens as its new president of trading in the US, and launching a physical supply operation in Jebel Ali.
Sources have also told Ship & Bunker that OceanConnect's former teams in Athens and Hamburg have joined GP Global, although the company has yet to comment on this.
Singapore Licence Application
One setback came in Singapore earlier this year, when the Maritime and Port Authority did not approve GP Global's application for a physical supply licence, while granting one to TFG Marine and Global Bunkering.
The company intends to continue its efforts to become a physical supplier there, Goel said.
We will continue to work towards a physical presence [in Singapore].
"We will continue to work towards a physical presence as a part of our business strategy," he said.
"We will definitely try again, as Singapore is a very important market for GP Global."
The COVID-19 pandemic has made the bunker industry more cautious in assessing counterparty risk, Goel said, and rising prices may strain credit lines for some.
"Certainly, in the East we are seeing suppliers being much more careful and regularly reviewing credit lines for traders, owners and charterers," he said.
"Should prices go up to the levels we saw at the beginning of the year, we will definitely see a credit squeeze, which will most likely lead to further consolidation in the shipping sector."
Crises and Opportunities
But the current instability may also bring the possiblity of GP Global growing further, Goel argued.
"We continue expanding our operations in new geographies while monitoring risk at every stage, and have maintained a strong focus on our long term strategy of strengthening the group's position as a leading bunker trader," he said.
"The crisis continues to present opportunities, and GP Global continues to address and evaluate these opportunities to determine which bring with them synergistic value.
"A company-wide cost efficiency drive has also been launched to help identify areas of potential savings."