Global bunker fuel demand is likely to fall by 5%-10% year on year in 2020 as the coronavirus pandemic slows trade and impedes shipping and ship crew movements in many countries, a bunker industry expert said.
"Major bunkering hubs worldwide likely saw their bunker fuel sales rise in the first few months of 2020 due to strong LSFO [low sulfur fuel oil] demand. But the COVID-19 crisis has caught the world off-guard," Simon Neo, executive director at Singapore-based consulting firm SDE International, told on May 26.
Singapore's April bunker fuel sales volume rose year on year as shipowners availed larger stems of LSFO amid the collapse in crude oil prices, Neo said. On the year, April sales volume rose 10.82% or 401,600 mt, data from the Maritime and Port Authority of Singapore showed.
However, this momentum may not be sustainable as the country's latest GDP outlook points towards a sharp contraction, Neo said.
Singapore's GDP is expected to shrink between 4% and 7% this year, lower compared with the previous projection of between 1% and 4% contraction, Singapore's Ministry of Trade and Industry, or MTI, said on May 26.
Still, bunker fuel demand in Singapore will likely remain steady this year as shipowners continue to repose faith in the world's largest bunkering port, Neo said.
Singapore also saw two players -- Minerva Bunkering and TFG Marine -- enter its bunker market recently as licensed bunker suppliers. This comes as Ocean Bunkering Services, a subsidiary of Hin Leong Trading and among the top physical bunker suppliers, was heard to have temporarily ceased bunkering operations from April 18 onwards.
Neo said that OBS' suspension of operations was unlikely to have a significant impact on Singapore's bunker dynamics as the present market structure can cater to existing demand.