THE price of CST380 heavy fuel oil, a carrier's biggest operating cost, has fallen to US$205 per tonne and prices could fall below $200 per tonne as oil prices and show no sign of recovering, traders say.
"There is just too much oil in the market and OPEC shows no sign of cutting output. It is inevitable that prices will continue falling. If sanctions on Iran are lifted, more oil will be available," said one trader, reported IHS Maritime 360.
The drop in commodity prices has wreaked havoc on economies, and by extension container volumes, the world over, from Malaysia, to Russia, to China, said the report.
While carriers will benefit from the lower price of oil to offset devastating declines in freight rates on the Asia-Europe and transpacific trades. But if oil and commodity prices don't recover, then economies that aren't diversified will be unable to sustain themselves.
Carriers need help to offset declines in freight rates that have been breaking all records as they fell yet again last week by 26.7 per cent to $469 per TEU from Shanghai to northern Europe.
That represents a year-on-year drop of 57.6 per cent, when the rate was $1,106. The break-even rate on that trade is said to be $800 - $1,000, the lower number made possible because of the low price of oil.
Another trader said the downward trend in Singapore's bunker prices casts doubt on whether LNG bunkering can take off there. "There are no ECAs in Asia and with the shipping market still depressed, shipowners have no incentive to invest in retrofitting vessels, more so now when fuel oil is so cheap," he said. "Prices of HFO [heavy fuel oil] and marine diesel oil have come down by more than 50 per cent from last year."
BUNKERING
28 August 2015 - 22:23
Bunker price drops to lowest point since 2005, changes the game for many
THE price of CST380 heavy fuel oil, a carrier's biggest operating cost, has fallen to US$205 per tonne and prices could fall below $200 per tonne as oil prices and show no sign of recovering, traders say.
BUNKERING
28 August 2015 - 22:23
Bunker price drops to lowest point since 2005, changes the game for many
This news 9659 hits received.
These news may also interest you