Many ports in China have recently implemented a slew of additional restrictions in a bid to curb the spread of the coronavirus as cases in a few Asian countries spike, creating an element of uncertainty and sparking fears of bunkering delays for maritime participants, industry sources said.
The stricter restrictions could mean that some ships will likely decide to bunker elsewhere in ports such as Singapore, leading to a potential drop in bunker sales at some Chinese ports, they said. It is also likely to upset shipping schedules with owners forced to face congestion delays at some ports while also grappling with the complications of dealing with crew changes.
India-related crew change and ships with a recent history of berthing in India and some of its neighboring countries — Pakistan, Bangladesh, Myanmar, Sri Lanka, Maldives — have particularly come under the scanner.
“Bunker demand in China will go down but our main concern is shipping operations. The regulation looks quite harsh,” a shipping source said.
A second shipping source said he was factoring in a delay of up to 10 days for his company’s ships going to China due to the recent changes.
“Bunkering in Shenzhen is affected. Because ships need to do [COVID-19 related] tests and quarantine … some bunkering contracts are also canceled,” a Zhoushan-based bunker supplier said.
The situation is different depending on the port but overall remains quite problematic, another shipping source said.
“We had to change our bunkering port inside China because we were not allowed to bunker at the first port, but allowed to take it in a second port,” he said.
A Zhoushan-based bunkering source said suppliers in the region were also being cautious about fueling Indian ships due to the pandemic.
In some ports such as Caofeidian and Jingtang, in principle, no foreign ships are permitted to board, according to a recent Huatai Marine circular seen by S&P Global Platts.
In ports such as Ningbo and Zhoushan, crewmembers are required to undergo nucleic acid testing if the ship called at an Indian port within 28 days before its arrival at these ports. If there are Indian crewmembers on board, they would be required to receive nucleic testing regardless of the time of embarkation, the circular said.
In Fangcheng, Guangxi, the ship would not be allowed to call if it passed through India within 28 days, and if not necessary, people are not permitted to board. Any boarding person is also required to have been vaccinated against COVID-19, the circular added.
Even when crew change is permitted by local authorities at some ports, restrictions such as these make it quite difficult to do so in practice, market sources said.
Other shipping-related services have also been affected.
At Zhoushan, for instance, the approval of repair orders shall be suspended for ships that called at ports in India, Argentina, Pakistan, Bangladesh, Iran, the Philippines, Turkey and Brazil after March 28, the circular said.
Refiners in China were optimistic that the situation was a temporary one.
A source with Sinopec’s flagship Zhenhai Petrochemical said its fuel oil production was stable as sales to the country’s bonded ports were still “healthy.”
PetroChina’s Guangxi Petrochemical, another major refiner, has also kept its output steady as bunker demand has been stable so far.
However, some industry sources said Singapore’s bunker market will likely temporarily benefit from the recent COVID-19 related restrictions at Chinese ports.
In 2020, the Port of Singapore recorded bunker fuel sales of 49.83 million mt, a 5% year-on-year growth, data from the Maritime and Port Authority of Singapore showed. The port is gearing up for another strong year, sources said. According to the latest MPA data, Singapore’s total marine fuel sales in April were around 4.26 million mt, up 3.47% year on year.
“To avoid delays, it seems [ships are] trying to bunker at Singapore,” said a source at a Chinese shipping company.
A bunker trader echoed a similar sentiment, saying that prices in Singapore were competitive.
The spot market premium for delivered Singapore 0.5%S marine fuel bunker over FOB Singapore marine fuel 0.5%S averaged $4.36/mt May-June 7, down from the April’s average of $10.79/mt, Platts data showed.
In comparison, the spot market premium for delivered Zhoushan 0.5%S marine fuel bunker over benchmark FOB Singapore marine fuel 0.5%S averaged $6.46/mt through May and until June 7, up from April’s average of $5.59/mt, Platts data showed.
Singapore, for its part, has also introduced some tighter COVID-19 checks at its port.
Owners, agents and masters of ships are required to ensure that all operations — cargo operations, bunkering, ship’s supplies and stores and other marine services — are carried out contactless or contactless with segregation protocol, according to a MPA circular on May 28.
However, bunkering operations in Singapore are still business-as-usual as contactless bunkering measures are already in place, industry sources said.