French shipping firm CMA CGM will waive its surcharge for low-sulphur fuels from 1 July in response to low prices.
CMA CGM and other containership firms introduced low-sulphur fuel surcharges from 1 December in expectations that their overall fuel costs would increase sharply with the implementation of the IMO's 0.5pc sulphur cap. Under the new regulation, CMA CGM and other shipowners are banned from burning cheaper 3.5pc sulphur fuel oil unless they have an exhaust scrubber fitted.
CMA CGM's most recent low-sulphur surcharge rate was $275/t and has been in effect since 1 February. The firm calculated the rate by using the difference between 3.5pc sulphur fuel oil prices in October and 0.5pc sulphur fuel oil prices in December last year.
Fuels with less than 0.5pc sulphur were at significant premiums to 3.5pc sulphur fuels at the start of the year. The key price spread between 0.5pc and 3.5pc fuel oil surged to over $300/t in January in the global bunkering hubs of Singapore and Rotterdam, and to nearly $500/t in Fujairah. But the spread narrowed sharply to less than $100/t in all three ports from March.
Prices for 0.5pc fuel oil in the three ports have recovered recently, rising from $152-201/t in late April to $265-292/t yesterday. A further price rise could trigger another low-sulphur fuel surcharge, CMA CGM said.
