IBIA issues bunker activity report for Africa (February 2024)

The International Bunker Industry Association on Thursday (22 February) issued a bunker activity report for Africa:

The recent escalation of attacks on commercial shipping in the Red Sea has had a varied impact on bunker volumes sales across different stakeholders. This report synthesises feedback from various entities, focusing on changes in bunker sales, the ability to quantify these changes, supply challenges, and future demand expectations.

1. Impact on bunker volume sales:

• There has been an observable increase in bunker volumes sales in some regions, with immediate effects noted by certain stakeholders. However, this increase has not been uniformly experienced across all entities.
• Some stakeholders have noted a significant potential for increased demand, while others have observed shifts in demand patterns, particularly towards Mediterranean ports, although some of those ports, such as Port Said, have seen a reduction. The best month for supply in one case was noted despite the crisis.

2. Quantification of changes:

• Estimates of increased sales range from 15-20% for some, with specific increases of 5-10 kilotons per month noted, predominantly in Very Low Sulphur Fuel Oil (VLSFO) and Light Sulphur Marine Gas Oil (LSMGO). High Sulphur Fuel Oil (HSFO) demand has also seen an uptick, influenced by price dynamics with major bunkering hubs.
• Not all stakeholders are willing to share precise figures.

3. Supply challenges and responses:

• While some adjustments were required, most entities have been able to meet the increased demand without significant issues. However, challenges such as extended lead times and price increases of 50-100 USD/MT have been reported.
• Actions to address supply issues include ramping up activities due to prior reductions in demand, discussions on partnerships with local suppliers, and concerns over deteriorating fuel quality.

4. Future demand expectations:

• The demand for bunkers is expected to increase further, with some entities experiencing solid trends and engaging in medium-term contracts. The crisis’s continuation is likely to sustain this demand increase, with infrastructure improvements such as floating storages and barges potentially solidifying the demand in South & West Africa.

5. Planning for future demand:

• Information from suppliers, official statistics, and insights into low-carbon fuel demand are critical for meeting current and future increases in demand. Challenges include predicting demand for alternative fuels like LNG and biofuels, influenced by price and regulatory support.

6. Engagement with ship operators:

• Continuous dialogue with clients and bunker players is underway to plan for future demand increases. While some discussions involve short-term contracts, a forward-looking approach is evident, with considerations for long-term cooperation and securing supplies for 6 to 12 months.

Note: Further specific regional/country analysis, along with demand forecast, planning and conclusion is available from the IBIA website here.

Photo credit: IBIA
Published: 28 February 2024