We are an independent shipbroker with an approach focused on expertise rather than scale.
It was well expected that from January 2020 we will face some unique challenges as we adopt the 0.5% sulfur cap.
The chaos created by the transition into the complaint fuel and the logistical issues we are currently facing will most likely be short lived. In Singapore, for retail bunkers at YE 2019, the VLSFO price was near USD 730 per T, a premium of USD 90 to wholesale prices. The same is true for MGO, with a premium of USD 100 to the bulk wholesale price. Rotterdam, on the other hand, had VLSFO priced at USD 590 per T at the end of 2019, a premium of USD 40 above wholesale. For HSFO, retail bunker prices premiums in both locations were relatively flat.
Rotterdam is the most well supplied bunkering hub, with its prices rising alongside crude oil. The spread, however, between VLSFO and MGO has of course narrowed in 2020 following the global trend. In the Med the spread between VLSFO and MGO has narrowed to USD 10 at some ports so far this year.
Singapore has been more reactive than Rotterdam in terms of bunker prices with VLFSO and MGO increasing more steeply, and the spread between the two being largely eliminated or reverted in the last couple of weeks.
However going forward the bunker hubs will establish regular premiums, VLSFO will get cheaper as more of it is available and more companies and more barges are delivering it. Therefore, the spread between MGO and VLSFO is not expected to stay narrow. In Singapore, VLSFO will probably not be as cheap as it is in Rotterdam, and its VLSFO is expected to have a wider spread to MGO. But how long will the disruption last and how long do the bunkering hubs need until they establish new supply chains?
At YE 2019 wholesale HSFO was USD 250 per T in Rotterdam and USD 300 per mt in Singapore, this will most likely reduce once refinery inventories build. Retail HSFO however is a different story. Many of the owners with scrubber fitted ships have term contracts to buy HSFO, which is assumed to be linked to bulk wholesale price. With very few spot transactions, in only a few supply ports, HSFO
prices will be unpredictable given there are just a few spot sellers that will dictate the levels. So owners with no long term HSFO supply contract will face challenges. HSFO spot premium to wholesale can be very wide, so its not too late to get a contract.
MGO was supposed to act as a cup to the new fuels. What is driving the high VLSFO price is that there are not enough barges to service the demand of VLSFO. Physical providers can charge good levels for the product that is in such huge demand.
Once the supply chain is established, MGO should return to a better premium to VLSFO due to higher refinery and manufacturing costs.
Previous expectations were that MGO would substitute demand shortages for VLSFO, however, MGO is not very suitable for long haul voyages and more likely to cause engine issues. Thus practical and operational limitations have proved this theory to be limited in practice.
Chinese refiners are capable of producing 18.5 Mn T per year of VLSFO but so far, due to government tax, they haven’t been able to compete in the international market. However, it has been reported a tax rebate on fuel oil has been approved, which will increase supply and support lower prices especially in Asian hubs.
The dry bulk market has suffered as a result of higher bunker costs, which have been unable to be passed on to charterers and boost freight levels. TCEs, for vessels burning complaint fuel, on major routes across various sectors are 67% lower, on average, so far in 2020 compared to the 2019 average earnings. For example, a Capesize heading from Hedland to Qingdao, the average TCE was USD 11,225 per day in 2019 while it averaged just USD 2,829 per day in the first week of 2020. Owners in the capsize market are discouraged to ballast in the Atlantic basin due to high bunker prices which decreases available capacity in the Pacific market.
Affinity Research LLP
Dry Cargo
Dry Cargo
Our dry bulk chartering teams in Sydney, Melbourne, Perth, Santiago, Lima, Montevideo, Singapore and London are cargo-focussed and they fix voyage, COA and time charter business on behalf of their clients with a wide range of ship owners.
Contact: David Oakley
[email protected]
+61 2 9937 8806
Finance
Finance
Affinity Financial Products Ltd is authorised by the FCA to provide advice and execution of regulated activities. We focus our efforts on asset-related transactions often structured as corporate share sales or mergers and acquisitions.
We work in partnership with investment banks providing specific, shipping-related advice.
Contact: Andrew Finn
[email protected]
+44(0)20 3142 0114
LNG
LNG
Our young and dynamic LNG team possess wide-ranging experience of spot and term charters working with all major LNG shipowners and charterers. The LNG team has close interaction with the Newbuilding and Sale & Purchase divisions with an unrivalled track record of contracting LNG newbuildings and in the sale and purchase of LNG assets.
We maintain up-to-date knowledge and an understanding of new technologies within the LNG sector to ensure that our clients can make the most suitable and cost-effective decisions on shipping solutions.
Contact: Joni Mackay
[email protected]
+44(0)20 3142 0133
Newbuilding
Newbuilding
Our Newbuilding team has concluded over 500 newbuildings of all types, including LNGCs, FSRUs, drillships, crude tankers, product tankers and dry cargo vessels. We have contracted in all major newbuilding centres globally, with particular focus on the Korean Shipyards.
Contact: Nick Wood
[email protected]
+44(0)20 3142 0111
Offshore
Offshore
Affinity Offshore is based out of our Oslo and Houston offices. The Team focuses on world-wide sale & purchase of offshore support vessels, as well as chartering – particularly in the Americas and Mediterranean/MENA regions.
Contact: Tor-Øyvind Bjørkli
[email protected]
+47 2109 8211
Research
Research
Our research department combines real time market information with econometric modelling and the latest technology.
Contact: Sevita Kondyliou
[email protected]
+44(0)20 3142 0182
S & P
S & P
Our Sale & Purchase team has extensive experience of working with private clients, national shipping companies, major corporates, oil companies, grain houses and institutional investors. We provide a cradle to grave services across all shipping sectors. We operate from London, Singapore and Seoul to give 24-hour coverage of the markets, working for both newbuilding and second-hand buyers.
Contact: Toby English
[email protected]
+44(0)20 3142 0123
Tankers
Tankers
Our established tanker chartering teams serve the industry from London, Houston and Santiago delivering a highly proficient spot chartering service with a prime position in the fuel oil market. The team has close relationships with oil majors, national oil companies, oil traders and major ship owners and operators.
Our ethos for operations and post-fixture is simple: these roles are as important to us as the chartering/commercial function, and we continue to apply those same principles of professional ship broking throughout the life of each fixture.
Contact: Tim Gurdon
[email protected]
+44(0)20 3142 0142
Valuations
Valuations
We provide transparent, objective ship valuation service to major owners, banks and other financial institutions at short notice and a daily basis. We provide a retainer service for regular fleet valuations.
Contact: Ben Pusey
[email protected]
+44(0)20 3142 0125
Dry Cargo
Our dry bulk chartering teams in Sydney, Melbourne, Perth, Santiago, Lima, Montevideo, Singapore and London are cargo-focussed and they fix voyage, COA and time charter business on behalf of their clients with a wide range of ship owners.
Contact: David Oakley
[email protected]
+61 2 9937 8806
Finance
Affinity Financial Products Ltd is authorised by the FCA to provide advice and execution of regulated activities. We focus our efforts on asset-related transactions often structured as corporate share sales or mergers and acquisitions.
We work in partnership with investment banks providing specific, shipping-related advice.
Contact: Andrew Finn
[email protected]
+44(0)20 3142 0114
LNG
Our young and dynamic LNG team possess wide-ranging experience of spot and term charters working with all major LNG shipowners and charterers. The LNG team has close interaction with the Newbuilding and Sale & Purchase divisions with an unrivalled track record of contracting LNG newbuildings and in the sale and purchase of LNG assets.
We maintain up-to-date knowledge and an understanding of new technologies within the LNG sector to ensure that our clients can make the most suitable and cost-effective decisions on shipping solutions.
Contact: Joni Mackay
[email protected]
+44(0)20 3142 0133
Newbuilding
Our Newbuilding team has concluded over 500 newbuildings of all types, including LNGCs, FSRUs, drillships, crude tankers, product tankers and dry cargo vessels. We have contracted in all major newbuilding centres globally, with particular focus on the Korean Shipyards.
Contact: Nick Wood
[email protected]
+44(0)20 3142 0111
Offshore
Affinity Offshore is based out of our Oslo and Houston offices. The Team focuses on world-wide sale & purchase of offshore support vessels, as well as chartering – particularly in the Americas and Mediterranean/MENA regions.
Contact: Tor-Øyvind Bjørkli
[email protected]
+47 2109 8211
Research
Our research department combines real time market information with econometric modelling and the latest technology.
Contact: Sevita Kondyliou
[email protected]
+44(0)20 3142 0182
S & P
Our Sale & Purchase team has extensive experience of working with private clients, national shipping companies, major corporates, oil companies, grain houses and institutional investors. We provide a cradle to grave services across all shipping sectors. We operate from London, Singapore and Seoul to give 24-hour coverage of the markets, working for both newbuilding and second-hand buyers.
Contact: Toby English
[email protected]
+44(0)20 3142 0123
Tankers
Our established tanker chartering teams serve the industry from London, Houston and Santiago delivering a highly proficient spot chartering service with a prime position in the fuel oil market. The team has close relationships with oil majors, national oil companies, oil traders and major ship owners and operators.
Our ethos for operations and post-fixture is simple: these roles are as important to us as the chartering/commercial function, and we continue to apply those same principles of professional ship broking throughout the life of each fixture.
Contact: Tim Gurdon
[email protected]
+44(0)20 3142 0142
Valuations
We provide transparent, objective ship valuation service to major owners, banks and other financial institutions at short notice and a daily basis. We provide a retainer service for regular fleet valuations.
Contact: Ben Pusey
[email protected]
+44(0)20 3142 0125
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