Rising low-sulphur fuel costs start to impact Asia shipping

Consultancy Alphaliner has reported instances of idle containerships waiting for compliant fuel. It noted several cases of laden ships at anchor in Asia, apparently waiting for LSFO bunkers.

The carrier most impacted appeared to be Singapore-based Pacific International Lines (PIL), with six or more vessels anchored off of its home port since late December. All the vessels were panamaxes normally deployed on the Asia-to-West Africa trade lanes.

Singapore is the main bunkering hub in Asia and it has seen the price for 0.50%-compliant LSFO rise to more than $700 per ton. That compares with about $550 at the beginning of December 2019.

Although the customers of regional carriers which had imposed fuel surcharges were unhappy, it would appear that these surcharges have been insufficient to cover the additional operating costs. That has led to fears that some operators could rationalize networks, or cut some services, over the next few weeks.