Bunker Prices – Questions and Answers, Worldwide bunker prices, Analysis bunker price, Trends bunker price, Historical bunker prices, IMO 2020 bunker prices

bunker prices

Bunker Prices – Questions and Answers, Worldwide bunker prices, Analysis bunker price, Trends bunker price, Historical bunker prices, IMO 2020 bunker prices

1. What is bunker?

Years back steamships used the power of steam to travel and steam was generated by feeding coal into the furnaces on board the ship. The storage container for coal was known as a Bunker. Since then the term bunker became synonymous with fuel for ships. There are various types of fuels used by ships like IFO 380cst (intermediate fuel oil), IFO 180cst, MGO (marine gas oil), LS MGO (low sulphur marine gas oil) and others. The cost of bunker fuel constituent 50% of ships operating cost. Bunker fuel is thick and heavy; must be heated before it can be used in the vessels’ engine.

2. What is bunkering?

Bunkering is the supply of fuel for use by ships in a port. The bunker supply is made by barge (small tanker ship), tank trucks (road truck wagon, rtw) and pipeline.

3. What is bunker price?

Bunker price is the price of IFO 380cst , IFO 180cst , MGO, LSMGO and other bunker fuel prices.

4. What is Bunker Adjustment Factor?

Historically there have been fluctuations in the availability of marine fuels. These variations can have a lasting impact on bunker fuel prices. Carriers could hardly quote stable freight rates to clients. Hence, the Bunker Adjustment Factor came into effect. Bunker adjustment factor (BAF) reflects the price variations in fuel rates. When quoting shipping rates, carriers will add in this surcharge to the base freight. A bunker surcharge, also known as bunker adjustment factor (BAF), is the charge shipper’s incur to compensate for fluctuating fuel prices and is typically in addition to other surcharges and fees added to the freight costs. The bunker surcharge, or bunker adjustment, is specific to ocean carrier’s fuel costs that change on a month-to-month basis. One month fuel rates are down so the surcharge may be less and vice versa, shippers are faced with higher surcharges when fuel costs are on the rise.

5. What is bunker price Index?

A bunker price index can be defined as a statistical index that from a specific starting point traces and measures the relative changes of a bunker type/category’s price over a time period, (month, quarter, year), in comparison with a fixed standard, (i.e. the same bunker type/category’s price during a certain time (or base) period). The starting point of an index can be at any time, for example as recent as the previous day or dating back several years.

6. How does bunker price hedging works?

Bunker hedging is a contraction of the traditional financial risk management and fuel price analysis. Thus, fuel price risk management is used to reduce or eliminate a company's exposure to fluctuating bunker costs. This form of risk management is continuously processing, including the traditional tasks of risk management: Risk assessment; the development of a strategy and action plan; and strategy implementation. The prolonging of fuel price analysis in bunker hedging mainly contributes with price forecasts. By using industry specific tools and strategies it is possible to fix or cap a bunker price at a certain level and period of time enabling the development of a bunker hedging strategy decreasing the pressure on your company’s bunker budget.

7. How bunker price is determined?

Bunker fuel is a derivative of crude and therefore there is some correlation between crude oil prices and bunker fuel prices. Bunker prices also depend on the availability of the product (ifo 380cst, ifo 380cst , mgo, lsmgo ) in the market. Bunker prices also depend on the schedule of barges (logistics) of the supplier, for example if the supplier has already taken bunker supply orders for particular dates than prices are expected to be higher. Bunker prices would generally be higher if bunker purchaser fixes the bunker closer to the delivery date, generally it is recommended to fix bunkers atleast seven days prior to vessel ETA. There are also other factors such as speculation in the crude market, refining priorities and capacity constraints, inherent difficulties for vessel operators in either storing or hedging fuel – create pricing distortions that may have an impact on bunker oil prices.

8. Who determines bunker price?

Bunker suppliers determine the price for their bunker fuel depending on their cost, product availability and logistics availability.

9. How bunker prices impact bunker buyers (ship owners / operators  / charterers )?

Bunker fuel constitutes 50% of ships operating cost, so bunker prices have a huge impact on ship owners, operators, and charterers. Lower bunker prices are good for shipping companies which reduces operating cost for shipping company.

10. How bunker prices impacts bunker suppliers?

Bunker suppliers also prefer lower bunker prices because it will decrease their capital requirement for purchasing and holding the fuel. They can purchase more fuel with the same funds.

11. How bunker prices impact bunker traders?

Bunker traders also prefer lower bunker prices because it will decrease their capital requirement for trading the fuel. They can trade more fuel with the same funds, also their risk will also be reduced because their exposure to customers (shipping companies) would be reduced because of lower bunker prices. For example at a price of $ 500 per metric ton of ifo 380cst for a 500 metric tons bunker order their exposure for a shipping company X would be $ 250 000 but if the bunker price is $ 300 per metric ton their exposure would be $ 150 000. So bunker traders prefer lower bunker price.

12. How bunker prices impact bunker brokers?

Bunker brokers purchase bunkers generally on behalf of their clients who are shipping companies, so high or low bunker prices do not directly impact their business.

13. Why bunker price change?

Bunker price changes because of movement in crude oil prices, availability of fuel with the supplier, Barge availability, terminal availability for loading and other factors.

14. Is high bunker price good for bunker buyers?

High bunker price is not good for bunker buyers (bunker purchaser) because this will increase their operating cost and capital requirements.

15. Is low bunker price good for buyers?

Low bunker prices are good for bunker purchasers because this will keep their operating cost lower.

16. Is high bunker price good for bunker supplier?

For bunker suppliers lower bunker prices are better because that will reduce their risk and exposure and also capital requirements.

17. Is high bunker price good for bunker trader?

For bunker traders also lower bunker prices are better because that will reduce their risk and exposure and also capital requirements.

18. Is high bunker price good for bunker brokers?

Bunker prices do not impact bunker brokers directly.

19. How to know correct bunker price at particular port?

Bunker prices can be checked with supplier / broker or trader.

Best option is to check the correct bunker prices on reliable website like www.Livebunkers.com which is very easy to use. User registration is simple and free, click here to register. Users can enter the bunker port of their choice in the google like search box on home page to find accurate bunker prices for particular bunker port. Users can also click the name of ports below search box to check bunker prices for listed ports.

Users can also check bunker prices at main ports at bunker prices  page  

Users can also check bunker prices at other main ports in View report section 

Also morning and evening bunker updates can be checked in Bunker Price update section 

20. Which are the lowest bunker price ports in the world?

Russian ports are the lowest bunker price ports in the world. Port like St Petersburg  have the lowest bunker prices.

21. Bunker prices at ports with highest bunker volume in the world?

The ports with highest bunker volume are Singapore, Fujairah, Rotterdam, Houston, Gibraltar. Bunker prices at highest bunker volume ports can be checked in View bunker price report section .

22. Where I can find all the information related to bunker price?

All the important details and actual accurate bunker prices can be found on www.livebunkers.com . Livebunkers.com was started with the aim of providing accurate and reliable bunker prices at more than 500 ports worldwide on 1st January 2017.

23. What are the benefits of higher bunker prices for shipping companies?

High bunker prices results in shipping companies taking a slow-steaming approach (sailing at slow speed) to reduce bunker consumption and hence their operating costs. This fuel-reduction measure will be good news for environmentalists as lower average speed of vessels reduces emissions. It is hoped that high oil price will provide greater impetus for greater technological improvement of ship performance and encourage the use of alternative energy for the shipping industry such as gas and biofuels.

24. What is going to be the impact of IMO 2020 on bunker prices?

The bunker prices are expected to rise post IMO 2020 because of sulphur cap of 0.5% on bunker fuel post 1st January 2020.

25. How a higher bunker price impacts the Drybulk supply growth?

The supply growth in shipping is usually measured as the change in carrying capacity, which is the net fleet growth calculated as new build deliveries minus scrapping. However, the effective supply growth will also depend on the speed of the fleet. If the vessels increase their speed, they can do more voyages within a given period and the effective supply growth will exceed the underlying net fleet growth. Vice versa, if the speed is decreased the effective supply growth will be lower than the underlying growth in carrying capacity.
There are 3 factors impacting the optimal speed of a vessel:
• The time charter level (owner’s income)
• The bunker price (the energy cost)
• The speed/consumption curve of the individual vessel
When a vessel increases the speed it will be able to do more voyages and thus increase the gross income. However, as the speed is increased the bunker consumption and thus the bunker cost increases exponentially. The exponentiality in the speed/consumption curve will vary from vessel to vessel.

Updated by Editor - www.Livebunkers.com at 30-Aug-2018 05:07:16 [UTC] , contact editor at editor@livebunkers.com

Published by Editor - www.Livebunkers.com at 14-Aug-2018 13:29:07 [UTC] , contact editor at editor@livebunkers.com

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