Wednesday, October 17, 2012
Bunker fuel demand to remain low through 2014, say industry execs
Due to a flagging shipping industry, high oil costs, and a battered global economy, demand for marine fuel is unlikely to recover until 2014 or after, according to industry officials.
The shipping industry is afraid a Chinese fiscal slowdown in will extend a four-year slump and keep demand for bunker fuel low. Marine fuel sales in top bunker port Singapore dropped 6 percent in September from August to 3.33 million metric tons.
A reduction of speeds, idling ships and buying energy efficient vessels, efforts undertaken by the shipping industry to cut costs, are keeping bunker demand low.
"We are looking at 18 to 24 months before larger demand starts coming back," Henrik Zederkof, chief executive of global bunker fuel supplier Dan Bunkering, said at an industry conference. One container shipping executive at the conference predicted a recovery in bunker fuel demand wouldn't happen until 2015 because of the slowdown in China and Europe's debt crisis.
Over six consecutive quarters, economic growth in China has fallen compared with a year earlier. Data to be released on Thursday are forecast to show the slide continuing July to September.
For more of the Reuters story: reuters.com
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