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Tuesday, August 4, 2020
Home The Weekly MABUX Bunker Index Concerns over fuel quality after long VLSFO storage

Concerns over fuel quality after long VLSFO storage

Floating storage of very low sulphur fuel oil (VLSFO) can cause some of these blended fuels to sludge, blocking pipes and filters on board vessels as asphaltenes increase during the period when the fuel remains unused.

According to MABUX concerns for the quality of VLSFO bunker fuel have arisen because of the continued “Weakness in prices and slow demand”.

Some reports suggest that after around 90 days of storage, “Asphaltenes start to precipitate and sludge problems could develop. The sludge formed may then block the ship's filters and pipework. The market is still waiting to see how the quality of the VLSFO that has been stored onboard floating storage for a prolonged period, six-12 months will be impacted in the end,” said MABUX statement.

According to the bunker fuel monitoring service bunker fuel prices have remained under pressure as sluggish demand has hit the industry.

MABUX’s World Bunker Index showed insignificant irregular changes during the last seven days. With the 380 HSFO index rising slightly, from US$303 to US$304/MT, VLSFO falling US$5, from US$367 to US$362/MT and MGO also down from US$446 to US$444/MT.

“The price difference between 380 HSFOs and VLSFOs (the so-called Global Scrubber Spread (GSS)) increased slightly: US$60.67 from US$57.06 a week earlier. In Rotterdam and Singapore the SS also showed moderate growth over the week: US$13 and US$5 dollars, respectively. SS spread in Singapore was US$6-12 dollars higher than in Rotterdam,” said MABUX.

The GSS - the main incentive behind ship operators’ adoption of the scrubber technology - narrowed significantly over the past few months. “As a result, the payback period for the investment has increased drastically”.

In addition, several port authorities over the past year have banned the discharge of wash-water from open-loop scrubbers within their waters.

“The bans are not a significant financial problem for the owners of scrubber-equipped tonnage as they still cover a small section of the world, but some operational complexity is added by the need to carry sufficient 0.50% sulphur fuel for areas where the use of scrubbers is not permitted,” said MABUX.

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