IMO 2020 raises issues on availability of HSFO and quality of LSFO, Lloyd’s Register says

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During a recent MARE Shipping Forum which took place in Singapore, Douglas Raitt, regional manager of Lloyd’s Register Asia, has spoken about some of the uncertainties and challenges that the bunkering industry might face post 2020. Such opinion becomes really interesting if we consider that Lloyd’s Register is one of the largest classification societies in the world, while its fuel oil bunker analysis service is widely used across the industry.

Ships with scrubbers might face challenges securing HSFO

Despite the fact that high sulfur fuel oil will continue to be available, not all the bunker suppliers will widely supply HSFO post 2020, when the majority of ship operators are going to turn their interest in low sulfur fuels. According to Raitt, only a small percentage of the global fleet is expected to be equipped with scrubbers and consume HSFO, while more than 95% of ships will opt for low sulfur fuels next year. So demand for HSFO bunkers will be limited and subsequently, only few bunker suppliers might take the cost to stock high sulfur oils in their storage tanks, Raitt added.

As a result, vessels equipped with scrubbers might face supply hassles, Lloyd’s Register’s manager noted. Therefore, according to Raitt, shipowners who will operate their vessels with scrubbers should secure their expected requirements via forward long-term contracts as they may not be able to source spot cargoes. In case of limited supply, buyers with term contract are going to have a priority, he added.

Not only that, but in case the supply for high-sulfur fuel is so low, its price is going to be increased and the difference with the prices of low-sulfur fuels might be much smaller than the anticipated one.

The quality parameters of low-sulfur fuels vary

During his speech, Douglas Raitt also referred to challenges arising from the use of low-sulfur fuels. Lloyd’s Register has already analysed various low-sulfur fuel samples and the test results showed that they experienced wide differences in various characteristics such as in viscosity, cold flow and pour point.

Therefore, despite the fact that the 2020 regulation focuses on the sulfur content, Raitt shared the opinion that “Shipowners need to be cautious about other non-sulfur related parameters of their bunker requirements as tests reveal these differ in a wide range for the various 0.5% sulfur fuels”.

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