2 December 2020
ClearLynx looked at how supply side fragmentation may be helping owners, and to start, focused on some ports in Far East i.e China, Hong Kong, & Singapore. When looking at ClearLynx’s data from Jan1 – Nov30, Hong Kong and other key Chinese ports have 2 key suppliers with 75-90+% dominance as below chart shows. Singapore is different as 70% of market is captured by 7 suppliers.
Given the dominant presence of Chimbusco in Hong Kong and both Sinopec & Chimbusco in China, ClearLynx wanted to see the affect this had on VLSFO prices.
As can be seen below in China, the non- Chimbusco / Sinopec suppliers have been grouped together as “others.” By doing this one is better able to see whether there are potential price savings by using the smaller suppliers. Overall, the “others” have priced competitively, especially in September and November where they beat the prices of Sinopec & Chimbusco by over $10.
In looking at Hong Kong below, the dominant supplier, Chimbusco, has been the more expensive option in three out of four months when compared to the “others.”
Based on ClearLynx’s data, only 3 suppliers in Singapore have accounted for at least 10% of the MT in 2020: TFG Marine, Chevron, & Equatorial. For the sake of this study those 3 have been broken out with the rest being categorized as “others.” Pricing has been competitive between all players as both the “others” and the larger suppliers have each had at least one month as the cheapest option in the port.
Supplier fragmentation can create opportunities for competitive pricing, credit, and logistical options. With ClearLynx, owners have easy access to our extensive supplier database, giving you the option to extend coverage to numerous small, medium, and large suppliers. ClearLynx has as clients, experienced broker companies and some large owner purchasing teams who have good contacts with these suppliers to help facilitate complete supplier coverage.
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Through our bunker procurement, pricing and analytics platform, we have unique visibility of actual and indicative pricing, product requirements, availability and completed transactions across the market. By aggregating this anonymized data, coupled with over a decade of historical data, we can provide insight into market activity, current trends and commentary on potential future outcomes.
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