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TOP PORTS


The challenges of dominance G


Singapore remains the top dog when it comes to ship refueling, but being the biggest is not always easy


lobal shipping has relied on the convenience and efficiency of Singapore's bunkering industry for many years, taking advantage of the


port's regionally competitive bunker prices and swiftness in operations. The significance of this niche Singapore sector is underpinned by its global dominance in sales volume and the sheer number of bunker players operating in the market. With 79 government-licensed bunker suppliers


as well as several bunker trading companies, Singapore stands apart from other global bunkering markets where typically only a handful of players are operating. Singapore continues to attract shipowners as


attested by bunker sales of 40.9m metric tonnes in 2010, up 12.4% compared to 36.4m metric tonnes in 2009. Sales in the first eight months of this year have reached 28.6m metric tonnes. Apart from strong bunker sales, the port also


gets a vote of confidence from foreign oil companies establishing themselves as accredited bunker suppliers in accordance to a list of criteria set by the Maritime and Port Authority of Singapore (MPA). International names that applied for and


received their accreditation licences over the past few years include global commodities trader Noble Resources, Chinese firms Brightoil Petroleum and Southernpec, Japan's Toyota Tsusho Petroleum, Hong Kong's Vermont UM Bunkering, Saudi Arabia's Bakri Trading, and Germany's Matrix Marine Fuels. “The MPA has ensured the availability of


necessary facilities to make Singapore a cost- effective and efficient bunkering port, and we are supported by a strong fleet of bunker tankers, modern oil storage terminals and refineries,” says Lim Teck Cheng, chief executive of Hong Lam Marine, Singapore's largest bunker tanker owner and operator. Lim adds that another crucial winning formula


for Singapore is the port's regionally competitive bunker prices – a double-edged sword perhaps. An industry player highlights that the MPA,


compared to seven or eight years ago, has been promoting a free-market economy to stimulate


competitiveness, and has since stepped back from excessive regulatory intervention unless absolutely necessary. The port authority has positioned itself to


develop the macro-economy of the market in order to elevate and reinforce Singapore as a global maritime hub, he says. On top of the hugely successful Singapore


Standard on Quality Management for Bunker Supply Chain or SS 524 that is modeled by other international ports, Singapore is initiating the use of mass flow meter for technological advancement, building LNG bunkering terminals, developing a bunkering course for cargo officers, and creating an IT network within the bunker supply chain. There are also various incentives for bunker tankers and ships within port limit. As is often the case being the largest and most


active market also comes it with its own challenges and difficulties. As the market grows bigger and becomes


more active, Singapore-based bunker suppliers, many of them longstanding players, are having to face increasingly complex issues on the global front and locally. Volatile crude oil prices, rising operational costs and weakening US dollar are affecting bunker suppliers, and in addition to upcoming market-based measures for emissions control mean that market players have a raft of challenges ahead. “We are constantly finding ways to minimise


our costs in an ever-thinning margins environment,” says Loh Hong Leong, group managing director at Global Energy International, a homegrown government-licensed bunker supplier. “The market is becoming less conducive for


trading as bunker prices are very distorted, so we have to cope with reduced volumes and to focus more on long term business instead of spot,” he adds. Bunker prices are largely tied to the volatility of


crude oil prices, and the recent firming of oil prices has increased a bunker supplier's exposure to credit risks for a smaller volume of products sold. Domestically, Singapore bunker prices have also been artificially distorted on a regular basis due to the presence of around 10 bunker trading firms, which are capable of offering below-market.


Seatrade Bunkering Report 2011 9 ‘


The MPA has ensured the availability of necessary facilities to make Singapore a cost- effective and efficient bunkering port.


Lim Teck Cheng, Hong Lam Marine





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