2020 sulphur cap

Maersk changes fuel adjustment surcharge ahead of 2020 sulphur cap

Maersk informed that it will change the fuel adjustment surcharge ahead of the 2020 sulphur cap. The new Bunker Adjustment Factor (BAF) aims at recovering the Maersk Line costs of compliance with the global sulphur cap which enters into force on 1 January 2020.

Maersk costs to rise $2 billion from 2020 sulphur cap

Amid the industry’s hot debate on how to achieve compliance with the upcoming environmental regulations, and on how these rules are expected to affect companies financially, the world’s largest container ship company, Maersk, said that the 2020 sulphur cap will add about USD2 billion to its annual fuel bill. 

Watch: How decarbonization affects ship finance

In this video, James Mitchell, Manager at Rocky Mountain Institute discusses the climate transition risks that shipping financiers face as countries begin to implement the Paris Agreement. He also discusses how decarbonization poses a significant opportunity for financiers who understand it and mitigate for it early.

Impact on charterparties- Time to act now

Tiejha Smyth, Deputy Director at North P&I Club’s FD&D Department attempts to shed light on the possible impact of the 2020 sulphur cap on contracts and charterparties. Ms. Smyth advises operators to consider matters such as bunker quality clauses, performance guarantees and fines for non-compliance early, in order to avoid future problems.

Higher LSFO and lower HFO prices expected after 2020

Eco ships will be able to bargain a considerable premium over older vessel ahead of high bunker prices, creating a two-tier market. After 2020, Drewry expects increased LSFO/ MGO prices, along with cheaper HFO prices. This will lead to a three-tier structure. Drewry also expects a $76 per barrel price in the third and fourth quarters of 2018.

Drewry sees recovery for multipurpose shipping

2018 has started with a confident footing for multipurpose shipping, which is forecast to recover further on rising demand, contracting vessel supply and lessening threats from competing sectors, according to Drewry. The multipurpose shipping market has struggled over the last few years, but conditions are now ripe for recovery.


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