Houston — Bunker supplier Monjasa is preparing for a rapid transition to introduce IMO 2020-compliant marine fuel 0.5%S in Panama, while staying flexible to prevent early advances before IFO 380 demand falls off there, according to the company's top official in the Americas.
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"We haven't seen a real pickup yet for 0.5%S in Panama," Rasmus Jacobsen, Monjasa's Americas managing director, told S&P Global Platts in a recent interview. "We believe [demand is] going to be building up during next month, and then probably take speed over the next months after that -- November and December -- but currently we're not seeing a big demand."
While sources have noted available supply in Panama, marine fuel 0.5%S market activity has so far been slow to develop as participants try to avoid premature adoption of the sulfur regulations.
"We're trying to be as flexible as possible to enable this transition at the right point in time, because there is an issue - if everyone starts having 0.5%S product available before it's actually going to be lifted, then that would necessarily mean that there is not going to be enough high sulfur in the market, Jacobsen said. "There is not enough market and tank storage to have all that available for all three grades," he added, emphasizing Denmark-based Monjasa's desire to adapt swiftly while providing steady supply flow in Panama.
"I think that the shipowners in general have it somewhat clear when they want to change, but I don't necessarily think that logistics [are] agreeing with the shipowners," Jacobsen said. "I think that there are some that want to secure availability of 0.5%S, and they're doing that by letting go of 3.5, and they might be OK having that 0.5%S in stock for a month. However, the shipping industry needs that 3.5 for that month," he added.
As market participants await the January 1, 2020, hard deadline for compliance with new International Maritime Organization regulations imposing a 0.5% sulfur limit on marine fuel globally, developments are constantly changing the bunker market landscape. Active players must continuously evaluate outlooks prior to the deadline.
Monjasa offers physical bunker fuel supply in Balboa and Cristobal along the Panama Canal, with operations managed out of its local office in Panama City. Monjasa also maintains marine fuel trading activity in North American ports out of Stamford, Connecticut.
"Globally, we're more focused on getting ready for the transition and making sure that everything is in place in our existing operations," Jacobsen said regarding the potential for Monjasa to introduce physical supply operations in North America, maintaining that Monjasa will only continue such operations in Panama.
Platts assessed marine fuel 0.5%S at $595/mt on an ex-wharf basis in Balboa Thursday.
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