An increase in ships retrofitted with scrubbers and strong demand for container shipping is boosting HSFO demand.
The number of ships with scrubbers increased by 80% from January through to October, says Stephen Gordon, managing director of Clarksons Research. Most of the scrubbers have been installed on container and dry bulk vessels, according to data from DNV GL.
As Bloomberg reports, data platform Ocean Insights shows that container shipping remains robust for this time of the year after the COVID-19 outbreak disrupted supply chains. This has led to the discount of HSFO to crude narrowing by almost 90% this year.
Moreover, the rise in trade is tightening supplies of HSFO as refiners ramp up output amid a recovery in some Asian economies. In fact, of the key marine fuel products sold in Singapore, HSFO was the only fuel to post a month-on-month increase in October.
As of now, Clarksons estimates that scrubbers have been fitted to more than 3,600 ships, which is equivalent to about 3% of the global fleet.
Bloomberg also adds that HSFO margins are expected to remain supported over the next three months with consumer demand seen increased until at least the Lunar New Year holiday in February. Overall, HSFO could account for 20% of global marine fuel demand by the end of 2021.
