THE suspension of cruise ship
deployments means a sudden fall in demand for heavy fuel oil, depressing
its price, and giving a boost to scrubbers, reports New York's
FreightWaves.
Cruise ships, unlike cargo ships, are
voracious consumers of fuel, not only to get from A to B, but to power
their massive hotel superstructures.
For example, a 10,000-TEUer sailing at 16 knots consumes 100 tons of
fuel a day. Assuming 250 days at sea per year, its annual consumption
would be 25,000 tons. The cruise industry's consumption is the
equivalent of three hundred 10,000-TEU ships.
Similarly, a 180,000-ton capesize bulker that burns 47 tons of fuel a
day and is at sea for 300 days a year would consume 14,100 tons
annually. The cruise industry consumes the equivalent of 530 capesizes.
The sudden end of cruise itineraries due to coronavirus has reduced
global demand for both 3.5 per cent sulphur heavy fuel oil (HFO) and 0.1
per cent sulphur marine gasoil (MGO).
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This, in turn, could affect the bottom lines of commercial ships, particularly those with exhaust-gas scrubbers.
Carnival Corporation owns 105 vessels under Carnival Cruise Lines, Princess Cruises, Holland
America Lines, P&O Cruises, Cunard Line, Costa Cruises, AIDA
Cruises and Seabourn Cruises.
Its ships consume 3.312 million tons of marine fuel a year at a total
cost of US$1.562 billion, and the company expected to consume 3.405
million tons of fuel a year.
The IMO 2020 rule requires all ships without exhaust-gas scrubbers to
consume either MGO or 0.5 per cent fuel known as very low sulphur fuel
oil (VLSFO); those with scrubbers can still burn HFO.
Putting their individual estimates together, the US-listed cruise owners
had been on track to consume a combined 5.8 million tons of fuel this
year. On a pro rata basis, this implies that the entire global fleet
would have consumed around 7.5 million tons.
The halt to cruise deployments will translate into an abrupt reduction
in demand for heavy fuel oil, but not for very low sulphur fuel oil
(VLSFO) because cruising favours marine gas oil (MGO) over VLSFO, giving
a tailwind for the VLSFO-HFO spread, a plus for cargo ships with
scrubbers. |
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