Did volumes increase on last year’s bunker market? Bunker Holding, the world’s largest bunker supplier, says no. But numbers provided by Blue Insight and Ship & Bunker say yes.
It isn’t easy to get an accurate picture of global volume developments in bunker fuels.
Bunker Holding, the world’s largest bunker supplier, holds that the bunker market shrank in 2021 compared to the previous year. But competitors, as well as consultancy Blue Insight, conversely state volumes grew between 2 and 3.5%.
”Bunker Holding is extremely pleased to maintain its position as the world’s largest, while holding on to volume in a market that has shrunk,” Bunker Holding Chief Executive Keld R. Demant wrote in an email to WPO in April in connection with a new status on the world’s ten largest bunker suppliers.
Bunker Holding stagnates while competitors grow
The top-ten list was compiled by analyst firm Seacred and Ship & Bunker.
According to the accompanying statement, Bunker Holding sold around 30 million tonnes of heavy fuel last year, mainly to the shipping industry, but this is the same volume as in 2020, it reads.
Eight out of ten grew last year
But eight out of the top ten competitors such as World Fuel Services, Peninsula, Minerva Bunkering and Monjasa all realized increasing volumes last year, Seacred’s statement shows.
In a new interview in May, Demant elaborated on his assessment that the bunker market actually declined last year.
The bunker market and volume can be measured in several ways
KELD R. DEMANT, CEO, BUNKER HOLDING
”The bunker market and volume can be measured in several ways. It has previously been estimated at around 300 million tonnes, but I have also seen figures of 218 million tonnes,” he tells WPO.
”It is our view that the market has not grown due to Covid-19 and that many ships have been idle. It can be a long discussion and I am not going to be the judge of that. We are looking more at what value we can ultimately provide to the customer and to other stakeholders,” says Bunker Holdings’ top executive.
Competitors tell WPO that volumes in the global bunker market probably grew 2-3% in 2021.
Volumes lower than in 2019
This is backed up by figures from consultancy Blue Insight and Ship & Bunker, which estimate that sales bunker volumes in 2021 increased by 3.5% compared to 2020.
The figures come from a study of volume trends in 17 leading bunker ports worldwide.
But although volumes grew last year, according to Blue Insight and Ship & Bunker, volumes at the 17 bunker ports were still 8.6% lower than in 2019 – the year before the Covid-19 outbreak occurred.
”This means that the impact of the Covid-19 pandemic on global bunker demand is far from over,” writes Ship & Bunker, which also points out that sales of conventional bunker fuels are declining.
This is partly because ships have improved their energy efficiency and because there is a gradual shift to alternative fuels.
Ship & Bunker adds that due to these reasons and the challenges to bunker supply posed by Russia’s invasion of Ukraine, a jump back to higher volumes as seen in 2019 is unlikely.
Bunker customers’ profitability examined
Although bunker volumes at Bunker Holding were either flat or fell in 2021, the bunker group had its second-best performance last year.
In 2021, Bunker Holding looked more critically at the profitability of the group’s many customers, which on average contributed to higher profit margins.
”We have strategically looked at whether there are customers that are not profitable for us and whether there are customers that are no longer suitable for us credit-wise. We have eliminated them,” Demant says.
”When you see other companies that have volume growth, the question is whether they have made money on that growth in every case. My analysis says, at least of the companies we’ve looked at, that they haven’t.”
The world’s top ten bunker companies
Numbers in parentheses are the company’s 2020 volumes.
Source: Seacred og Ship & Bunker’s report: Top 10 Bunker Companies for 2022
