South Africa disorder to shift bunker demand

Bunker demand in South Africa is likely to temporarily move away from Durban and Richards Bay because of the civil unrest in the region.

Violence erupted after the imprisonment of former president Jacob Zuma, and began in Zuma's home state of KwaZulu-Natal where Durban and Richards Bay are located.

Port operations, including bunkering, are hampered by staff staying at home for safety reasons, according to bunker market participants. The situation has led to the 180,000 b/d BP-Shell joint venture Sapref refinery in Durban declaring force majeure, which will tighten bunker supply at the city's port.

Bunker supply in South Africa is regularly constrained by unreliable refinery supply. But the closures of Engen's 105,000 b/d Durban refinery and Astron Energy's 110,000 b/d site in Cape Town in the past year means that much of the country's bunker product has to be imported. A prolonged closure at Sapref would put further pressure on bunker supply in Durban and Richards Bay. The latter is host to a major coal terminal.

Lack of supply and limited port operations would shift bunker demand to other South African ports such as Cape Town and Algoa Bay, which are unaffected by unrest.

Port Louis, in Mauritius, has been an increasingly strong competitor to South Africa's bunker ports in recent years. The unrest, especially if it spread to other ports such as Cape Town, would provide a boost to Port Louis' bunker demand.

By George Collard