S&B MARKET SURVEY: Global Bunker Hub Demand Gained 4.9% on Year in Q2

    •  4.9% average advance in Q2 2023 vs Q2 2022
    •  Q2 volumes see 2.3% fall from Q1
    •  Rising demand in Singapore and ARA
    •  Read the full report here: shipandbunker.com/bi/bunker-volumes

Demand at key marine fuel hubs advanced on a yearly basis but slipped on the quarter in the second quarter of 2023, according to the latest market survey of bunker sales volumes in 17 leading global locations.

As in previous quarters, Ship & Bunker and consultancy 2050 Marine Energy surveyed bunker market participants around the world alongside official data where available and found an average climb of 4.9% in volumes in the second quarter from the same period of 2022. The year-on-year advance compares with a 3.1% year-on-year advance in the first quarter. Q2 volumes sequentially were 2.3% lower than in Q1.

The survey covers about 60% of the global demand total shown by official IMO data.

"On the surface, Q2 2023 seems to show fairly positive growth (almost 5% over Q2 2022 in the main ports) -- but this is largely dominated by the notable performance of Singapore and ARA," Adrian Tolson, owner of 2050 Marine Energy, told Ship & Bunker on Wednesday.

"Singapore has likely benefitted from becoming the chief outlet for cheap HSFO and Rotterdam has equally become the cheapest place to buy VLSFO – continuing trends and fall out from the post-Ukrainian invasion sanctions regime."

Demand Consolidates at Hubs While Wider Market Declines

The strength in Singapore and the ARA hub -- seeing year-on-year growth of 9% and 23%, respectively -- may also be down to a consolidation of demand at the largest bunkering locations while the wider market declines.

This form of consolidation tends to emerge at times of pressure in the bunker market.

Weakness in global container markets remains one of the biggest factors affecting the market. Boxships are the largest consumers of bunker fuel among the various shipping segments, and this market has seen a severe drop over the past year.

Global marine fuel supplier and trading firm Monjasa said it continued to see growth in Q2, while remaining mindful of a wider slowdown.

"Monjasa continued to record positive volume developments across all regions throughout Q2 compared to 2022 levels for the same period," a Monjasa representative told Ship & Bunker.

"However, towards the end of the quarter, we began seeing a slowdown in overall market activity levels, led by the weaker demand from the container line segment and matching the global trade downturn.

"Overall, our Americas and Middle East & Africa regions experienced steadily climbing volume curves above expectations."

Stormclouds on the Horizon

Further trouble can be expected for the bunker markets of South Africa and the Middle East over the remainder of the year, Tolson added.

Bunker supply at Algoa Bay, now South Africa's largest bunkering location, has all but shut down over the past month in the wake of a regulatory dispute with the country's tax authority.

"Storm clouds on the horizon would be expected for South Africa’s bunker business that will dramatically fall in the second half of this year," Tolson said.

"And with continuing OPEC+ cutbacks alongside severely heightened regional geopolitics, its' hard to see Fujairah in the ascendancy."

Methodology

As with the previous surveys the areas covered by the survey are Singapore, the Amsterdam-Rotterdam-Antwerp (ARA) hub, Fujairah, the US Gulf, South Korea, Russia, the Gibraltar Strait, Hong Kong, Panama, Zhoushan, Japan, New York, West Africa, South Africa, the Canary Islands, Los Angeles/Long Beach and Turkey. Data is sourced from a combination of market participants and official records.

The full breakdown of the survey results including sales volumes in each bunkering region for Q2 2023 and 2022 is available by clicking here.