Discussions on how to deal with sulphur test results that are marginally above the 0.5% level have been a feature of the third full week of the sulphur cap operation.
“The problem lies in the difference between commercial contract interpretation around test precision principles and the MARPOL Annex VI sulphur verification procedures approved by the IMO for authorities to use when obtaining samples from ships to check for compliance,” said one expert.
One reason for fuel as supplied to be slightly above the 0.50% sulphur limit, could be that shore storage tanks or bunker barges have not been adequately cleaned when the usage has been switched from HSFO to VLSFO.
Meanwhile, the first supplies of VLSFO have been started at Sri Lanka ports: Colombo, Galle, Trincomalee. In addition, supplies of VLSFO in a number of ports globally are not stable, including ports in West Africa and Dubai.
China has announced a long-awaited, full value-added-tax rebate, effective 1 February on fuel oil. The VAT rebate rate is 13% and it may impact on VLSFO prices at Chinese ports as, currently, almost all fuel oil supplied to ships docking at Chinese ports is typically imported, mostly from Singapore and South Korea.
This trade flow could see some alterations once domestic refiners are able to supply to the bonded facilities.
It has also been noted that the bunker price spread for 380 HSFO-VLSFO at Rotterdam and Singapore has narrowed slightly this week: Rotterdam: from US$229 to US$195 and Singapore has seen a narrowing of the spread from US$287 to US$258 by the end of the week.
