Bunker markets in the Americas have adapted well to IMO 2020 regulations, though they are still dealing with the impact of a low-demand environment brought about by the coronavirus pandemic, according to participants Oct. 21 at the Maritime Week Americas 2020 conference organized by Petrospot.

North America

Few complaints on quality have been seen for 0.5%S in North America, except occasionally for sediment, according to Brian Coyne, managing director at KPI OceanConnect. According to Coyne, sellers and suppliers have been “focused on quality” and use COQs, or certificates of quality, during their transactions.

In the US, availability of 0.5%S has been constant, with people holding the fuel in tanks and with plenty of barges at their disposal, he said.

At the other end of the spectrum, high sulfur fuel oil is less available, as was expected, Coyne said. However, the decline has happened more quickly than anticipated. There are some who thought scrubbers would return a greater investment, but the drop in bunker prices caused by the pandemic impeded it, he said.

“As the economics get worse and worse on it, you will see suppliers abandoning it,” Coyne said, adding that there is currently almost no spot market for high sulfur fuel oil, as it is mostly sold under contract mainly to container vessels.

High sulfur bunker fuel now represents around 10% of the market in North America, with marine gasoil 15% and 0.5%S around 75%, according to Coyne.

The pandemic has been especially hard on the US Gulf Coast, where demand fell 30% in the second quarter of 2020 compared with the same period in 2019, data presented by Sarah Shipman Myers, managing director at Bunker One, showed. The decline for the Los Angeles/Long Beach area was 15% while in Panama it fell 9.3%.

Latin America

Panama continues to be the “bunkering station” in the Americas, said Mark Williams, managing director at Shipping Strategy, with strong bunker sales even amid the pandemic. If the Western Hemisphere decouples from Asia in trade and technology due to geopolitical issues, Panama will still be positioned to be a key transshipment for North-South or East-West trade, he said.

From January to September, bunker sales in Panama totaled 3.555 million mt, 10.32% below the same period of 2019. However, sales have increased month on month since July, with 0.5%S representing 75% of the sales, marine gasoil 10% and 15% for high sulfur bunker fuel.

Alexis Rodriguez, environmental protection specialist at the Panama Canal Authority, pointed to an increase in volume of fuel sold even when the number of ships receiving the fuel declined in some months this year.

According to Rodriguez, Panama still offers high sulfur fuel oil in a considerable volume as there are around 20 to 25 ships with scrubbers transiting regularly through the Panama Canal.

Regarding Colombia, the effects of the pandemic caused a 16% fall in international calls to the country’s ports over January-August, compared with the same period in 2019, Eugenia Benavides, marine fuels director at Organizacion Terpel, said.

At the port of Cartagena, which handles 24% of all cargo in Colombia, an average of 228 ships on international routes have arrived at the port in 2020, compared with 266 last year, Benavides said.

The 0.5%S fuel in Colombia is not produced by the state-run oil company Ecopetrol. Instead, it is sold by suppliers who blend raw materials. Ecopetrol, though, does supply marine gasoil. The average monthly sales in Colombia of bunker fuels is around 12,000 mt, according to Benavides.

In Argentina, Facundo Vasquez, marine sales manager at oil company Raizen, sounded an optimistic note. Vasquez shared data showing a solid market for Argentina’s 0.5%S bunkers at the port of Buenos Aires and the area known as Zona Comun, even when demand has been hurt by the pandemic.

Argentina was already well positioned for the IMO 2020 rules thanks to its low sulfur crudes, and when 0.5%S began to be offered to the market in September 2019, sales totaled 60,000 mt. The number rose to 82,000 mt in December 2019 and fell to 67,000 mt in January. In June, sales were not far from the beginning of the year, totaling 65,000 mt.

Raizen, which has its own refinery, sells around 30,000 mt of bunker fuel per month, covering around 50% of the market. The company has a bunker barge with 4,700 mt capacity for 0.5%S and 700 mt of marine gasoil, Vasquez said. “We are working with our refinery in order to double this volume, working in tanks, our dock,” he added.