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Bunker fuel loaded per ship in Panama rises during transit restriction period, government data shows

Highlights

Number of ships serviced with bunkers falls 23.84% since November

Sales expected to climb after transit restrictions eased in May-June

  • Author
  • Gerardo Gutierrez    Silvia Struthers
  • Editor
  • Bill Montgomery
  • Commodity
  • Agriculture Chemicals Refined Products Shipping

The number of ships calling for bunkers in the Panama Canal in the five months since traffic restrictions were imposed has fallen 23.84% year on year, but the loaded volume per vessel has increased, data from the Panama Maritime Authority shows, as a recovery in shipping traffic and bunker sales through the global waterway is expected by June.

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Bunker market suppliers have said sales volumes for April, which have not yet been released by the Maritime Authority, and for May seem to have increased.

"I would say that April was better than March," a trading source said. "More tons were delivered."

Ships loading marine fuels in Panama in March 2024 totaled 479, the lowest number since 564 vessels bunkered in the hub in January 2021, and 34.1% percent under a post-IMO 2020 peak of 727 ships in December 2022, according to the data.

Transit through the Panama Canal has been restricted since November after a severe drought brought by El Nino led the Panama Canal Authority to cut daily crossings in an effort to preserve water levels in the reservoirs feeding the canal.

Ships bunkering in the November 2023-March 2024 period totaled 2,514, a decline of 787 vessels, or 23.84%, compared with November 2022-March 2023.

Sales of bunker fuels in Panama in the same period fell by 308,383 mt, or 13.99%, to 1,895,680 mt.

More volume per load

The smaller decline in sales compared with the number of ships transiting the Panama Canal might be explained in part by a higher volume of fuel loaded per ship in the five-month period.

In March, the average volume of bunker loaded per vessel reached its highest level since January 2020, 815.61/mt, an increase of 4.28 percent compared with a previous high of 785 in February 2021.

"I would assume it is directly related to the situation of the canal," a bunker supplier said. "Waiting ships take more quantity, avoiding having to stop again, optimizing their trip after final transit."

Additional total volume loaded per ship from November 2023 to March 2024 averaged 86.8 mt higher year on year, or 10.52% more.

Expectations for more transits

With the May-December rainy season arriving in Panama, the Panama Canal Authority said it would increase to 24 from 17 the number of daily transits through the Panama Locks by May 16, after scheduled maintenance work at the Gatun Locks earlier in the month.

By June 1, it expects to increase daily transits to 32, getting closer to a historical average of 36.

It will also increase on June 15 the maximum permitted draft or vessels transiting the Neopanamax, to 45 feet from the current 44.

The expected increase in transits has already started to bolster bunker demand in Panama, according to the trading source.

March sales figures show slight signs of recovery, and market participants expect a slight increase in April's volume, when the data is released in the next few days.

Bunker sales reached in March their highest sales volume in the current year, totaling 390,678 mt, 10.5% higher than in February, although 16.4% lower than 467,425 mt in March 2023.

These figures were supported by higher sales of the high sulfur 3.5% grade, which reached 114,229 mt in March, their highest volume in six months. Panama continues to be a key market for the 3.5%S bunker fuel, currently only allowed to be used by ships fitted with scrubbers. Its sales in March represented 29.24% of the total sales volume.