Bunker Fuel Market - Global Industry Analysis, Size, Share, Growth, Trends, and Forecast 2014 - 2020
Albany, NY -- (SBWIRE) -- 02/27/2015 -- Bunker fuel market is the provider of fuel oil consumed by ship vessels, and is especially important for the shipping industry. The facts that ships will continue to consume fossil fuels until the day this industry ceases, and that bunkers fuel costs form nearly 70% part of a ship's running costs, including daily running and voyage costs, makes the bunker fuel market highly important for the global shipping industry. Any fluctuation in prices of fossil fuels has a direct effect on the profit margins of shipping companies.
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Thus, it is common with marine operators to purchase bunker fuel from ports where cost of fuel is lower. Some operators also prefer purchasing a major percent of total bunker fuel required for a fleet from a single bunker fuel port. The types of companies supplying bunker fuel, the type of bunker fuel (based upon fuel grades) supplied by these companies, and the variety of vessels using the bunker fuel are the chief elements of a typical bunker fuel marketplace.
An important subsidiary of the shipping industry, the global bunker fuel market is also a huge market. Analysts state that the global market of bunker fuel observed demands worth nearly 372.30 million tons in the year 2013. The market is expected to grow at a CAGR of 3.1% in the next five to six years and attain demand value worth 460.00 million tons by the end of 2020.
Bunker Fuel Market: Segmentation
The shipping industry currently uses two varieties of fuels: residual fuel and distillate fuel. Amongst these two, the segment residual fuel garnered majority share of demands in the market in 2013. However, major transit routes of the world have been declared as emission control areas (ECAs) by law to reduce sea pollution. This will largely affect the fuel consumption trend of shipping companies, and allow demand rise for middle distillate and low sulfur fuels from ships sailing in EACs.
Currently, presence of large ports in Singapore and China and rising traffic of containerized vessels and oil tankers in these regions have persuaded investors to increase investment in the Asia-Pacific bunker fuel industry. Europe is the second leading market of the overall bunker fuel market. Bunkering ports are highly developed in Europe, leading to low turnaround times for vessels that choose to fuel in the region. Important European ports such as Antwerp, Piraeus, and Rotterdam have emerged as major bunkering destinations in the region.
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Four chief categories of bunker fuel grades are available in the market: MDO/MGO, IFO 180, IFO 380, and IFO Others. IFO 380 is currently the most traded bunker fuel grade globally, is more economical than most other fuel grades, and is easily available at all major bunkering ports across the globe.
Demand for bunker fuels is currently highest from general and bulk cargo vessels. However, the relatively more amount of manpower and time required for loading and unloading cargo vessels may lead to gradual substitution of these vessels with container vessels. As a result, market shares of these end user segments could dramatically change in the near future.
Bunker Fuel Market: Competitive Landscape
Three kinds of sellers supply bunker fuel to the market currently: large independent bunker fuel suppliers, small independent bunker fuel suppliers, and major oil companies. Companies such as Lukoil-Bunker LLC and Gazpromneft Marine Bunker LLC operate in markets restricted to certain regional markets only, however, companies such as World Fuel Services Corporation and Chemoil Energy Limited offer services across all major ports of the globe. Other chief companies operating in the global bunker fuel market include Aegean Marine Petroleum Network, Bunker Holding A/S, and BP Marine Ltd.
Large independent bunker fuel suppliers having sophisticated infrastructure such as blending facilities and storage terminals in major bunkering ports of the world have an added advantage over small bunker fuel suppliers.
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