As the global bunker market is complying with the new environmental regulations and key players are looking for alternative types of bunker fuel in line with the Sulphur cap that will come into force in January 1, 2020, the use of HSFO inventories is reducing at several ports.
Thus, Sergey Ivanov, Director at MABUX, reported to BIMCO that
We are seeing high-sulphur fuel oil stocks going down now, and the space of manoeuvring for the ships that are equipped with scrubbers is becoming narrower as a result.
Mr Ivanov added that the same process can be now seen at additional crucial ports in Asia, such as Shanghai, Hong Kong and South Korea. Similarly, HSFO sales in Rotterdam were decreased in October.
MABUX believes that about 700 refineries globally are still producing HSFO. Yet, in late 2019 and early 2020, MABUX forecasts that at least 200 refineries may announce their stop in HSFO production, at least until the market seems stable and adapted to the new environment.
Mr Ivanov added that the continuance in HSFO production, from 2020 and beyond, could also be affected by uncertainties in legislation concerning open loop scrubbers, given that they have already been banned from many ports.