World News
CMA CGM Steps Up Fuel Hedging as Bunker Costs Surge
Container line CMA CGM has significantly stepped up its fuel price hedging for this year after seeing a gain of 37.5% in costs for bunkers and other consumables in 2021.
The firm paid $4.23 billion for bunkers and consumables in 2021, up by 37.5% from the $3.07 billion paid the previous year, it said in its latest earnings report.
"The current inflationary environment has led to a significant increase in energy prices reflected in higher bunker costs," the company said.
As well as facing rising VLSFO costs as other shipping lines do, the company is now the largest buyer of LNG as a bunker fuel and will have been exposed to last year's record surge in LNG prices. But its supply contracts may have limited its hit from rising spot prices, as CMA CGM's 37.5% rise in costs over the year was less than the 40% bunker cost increase seen by AP Moller-Maersk over the same period.
CMA CGM has now expanded its hedging as a response to last year's moves in the bunker markets. As of December 31 the firm had hedged about 8% of its expected 2022 fuel requirement using fixed price forwards with delivery, up from 0.5% of expected 2021 requirements at the end of 2020.
The firm has also hedged about 0.5% of this year's expected requirement using derivatives, up from none last year.
Key Bunker Prices More
| VLSFO | MGO | |||
|---|---|---|---|---|
| $/mt | +/- | $/mt | +/- | |
| Singapore | 647.00 | 6.00 | 762.00 | 5.50 |
| Rotterdam | 599.00 | 1.00 | 751.00 | 0.50 |
| Houston | 618.00 | 11.50 | 802.50 | 6.50 |
| Fujairah | 642.00 | 5.50 | 883.50 | 5.50 |
| Global 20 Ports Average | 661.50 | 3.50 | 859.00 | 5.00 |
| Global 4 Ports Average | 629.50 | 1.00 | 799.50 | 1.50 |
| Global Average Bunker Price | 719.00 | 3.50 | 915.00 | 7.50 |
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