The implementation of the IMO 2020 low-sulfur regulation is now less than 9 months away, however there are still a lot of concerns voiced out from industry’s stakeholders, showing that market uncertainty still remains at extremely high levels. Transparency and clarity on key issues such as the pricing and quality of the new complaint fuel has not become any better, various speakers explained during the 7th Bunkernet Bunker Conference, which was organised in Limassol, Cyprus by Bunkernet in partnership with the International Bunker Industry Association (IBIA).
As far as the pricing is concerned, Platts’ Eleni Pittalis explained that notwithstanding the first contracts of 0.5% low sulfur fuel which are already trading in the market, their liquidity still stands at very low levels and thus safe assumptions can not be made. Therefore, despite the fact that an initial price differential has been established, this is likely to materially change within the coming months, when the market liquidity for the new compliant fuel will become higher.
Furthermore, according to Pittalis, since blended fuels will play a vital role in the post-2020 era, it is likely the bunker prices to be affected from variables in refining industry or other parameters irrelevant with the marine fuel industry.
In terms of quality, a thorough analysis was made by Naeem Javaid, the Global Operations Manager FOBAS at Lloyd’s Register. Javaid explained that while the trials on-board the ships and the analysis of various blends are ongoing, the results are not publicly shared and this is a serious drawback that limits transparency among stakeholders.
This is the second time, within a couple of months, that an industry-leading fuel testing laboratory and international classification society warns about the lack of transparency on the test results and fuel quality data. Earlier this year, Bureau Veritas had called for higher cooperation among the stakeholders of the marine fuel supply chain, suggesting the share of technical information and access to higher visibility on quality metrics.
According to Javaid, trials on-board the ships, while not without problems, are generally satisfactory. However even this positive feedback might when new blends coming from new suppliers will hit the market, a situation which also remains cloudy at the moment.
From his side, Nicolas Argyrou, the General Manager of Bunkernet concluded that organising such events might be a good chance for stakeholders to come together and enhance transparency by discussing the new challenges that the industry faces from time to time.