The
Bunker fuel market comprises fuels used aboard vessels for the propulsion of
engines or the generation of heat or electricity. Heavy fuel oil, marine gas
oil, and marine diesel oil are the major bunker fuel types that offer benefits
such as cost-effectiveness and higher energy density. However, they emit a
considerable amount of sulphur oxide and particulate matter when combusted in
the vessel's engine.
The Global Bunker Fuel Market is estimated to be
valued at US$ 33.23 Mn in 2024 and is expected to exhibit a CAGR of 6.6% over
the forecast period 2024 to 2031.
Key Takeaways
Key players operating in the Bunker Fuel Market are ASSURANT INC., American
International Group, Inc., AXA, AmTrust Financial, Asurion, CARCHEX, CarShield
LLC, Endurance Warranty Services LLC, Edel Assurance, SquareTrade, Inc., and
Others. These key players are focusing on expanding their product portfolio and
global footprint to bolster their market presence.
The growing marine trade globally is driving the demand for bunker fuels.
Approximately 90% of world trade is transported by sea, necessitating vast
bunker fuel requirements for transport vessels. The significant surge in
international seaborne trade volumes for oil and dry bulk commodities is
directly influencing the bunker fuel consumption.
Several emerging economies in Asia Pacific and Middle East regions are
witnessing port infrastructure development and expansion. This is facilitating
increased marine transport activities and
Bunker
Fuel Market Demand in these regions. For instance, China has
ambitious plans to develop several ports along its Maritime Silk Route under
the Belt and Road initiative.
Market Key Trends
One of the major trends in the bunker fuel market is the growing adoption of
alternative fuels to comply with the stringent environmental regulations
regarding maritime emissions. The International Maritime Organization (IMO) has
implemented regulations to curb Sulphur oxide (SOx) emissions from marine
fuels. This is prompting ship owners and operators to explore various
low-sulphur compliant fuel options such as liquefied natural gas (LNG),
biofuels, and hydrogen cells. The IMO's roadmap for reducing greenhouse gas
emissions from ships by 50% by 2050 compared to 2008 levels will further accelerate
the transition toward cleaner maritime fuels in the long run.
Porter’s Analysis
Threat of new entrants: Entry to the bunker fuel market requires
substantial investment in infrastructure like tank farms and bunkering vessels.
Bargaining
power of buyers: Large shipping companies and traders have high bargaining
power due to their ability to source fuels from various suppliers globally.
Bargaining
power of suppliers: Major oil companies and traders dominate the bunker fuel
supply market with established infrastructure and supply contracts with
refineries.
Threat
of new substitutes: Alternate fuels like LNG are emerging but no direct
substitutes for marine fuel oils exist currently.
Competitive
rivalry: Competition in the bunker fuel supply market is intense as suppliers
undercut each other's pricing to attract more vessel bunkering.
Geographical regions: Southeast Asia including Singapore and China accounted
for over 20% of total global bunker fuel demand in 2023, driven by large
shipping volumes transiting the key ports. Another fast growing market is North
Asia led by Korea and Japan due to increasing imports of coal and iron ore to
fuel their industries.
Geographical regions: Europe remains the largest bunker fuel market in terms of
value, dominated by major ports in northwest Europe including Rotterdam and
Antwerp. The region's share of global demand has declined slightly in recent
years due to shifts towards Asia Pacific bunkering hubs though demand from
intra-European cargo trades remains robust.
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