Bomin's Paul Millar Sees Potential 20% Drop in Bunker Traders Operating by End-2020

by Ship & Bunker News Team
Tuesday January 7, 2020

A wave of consolidation in the marine fuels industry triggered by the International Maritime Organization's lower sulfur limit may cause a drop of as much as 20% in the number of bunker trading companies operating by the end of 2020, according to Paul Millar, head of global credit at Bomin Bunker Holding GmbH & Co.

"The oil majors will take a bigger market share and, in the new low-sulphur fuel environment, buyers will seek to buy more directly from physical suppliers," Millar said in shipping industry body Bimco's Reflections 2020 magazine.

"Bunker traders' working capital will come under strain because of the higher fuel prices, slowerpaying (or failing) customers, and cash flows will be disrupted, because very low-sulphur fuel oil claims will lead customers to withhold payment.

"As a consequence, some bunker traders will fail, while others will downsize, rename or get acquired, or otherwise exit the market.

"By the end of 2020, we might see 20% fewer bunker trading companies than we have today."

For a section at the end of the magazine, Bimco approached several bunker industry experts and asked them for a "wild prediction" about what might happen in 2020.