World Bunkering > News > Summer 2010 > Greece

The primarily Piraeus-centred Greek bunker market contracted by 12% compared to 2008 with a total of 3.5 million tonnes supplied. Nevertheless, Piraeus maintained its position as the major Eastern Mediterranean bunker hub.

There were, however, some major changes among the main players in the Greek market with Hellenic Petroleum’s EKO losing significant market share. In 2008 EKO had 32.1% of the market but saw this drop to 23.5% in 2009. Aegean Marine Petroleum Network Inc (AMPNI) on the other hand bucked the general trend and increased its volumes in both absolute terms, from approximately 704,000 tonnes to 811,000 tonnes, and market share terms, from 18.1% to 23.5%, putting it on a par with EKO. AMPNI has 10 barges based in Piraeus and has an ongoing newbuilding programme.

The next largest supplier last year was JetOil whose market share dropped slightly, from 19.5% to 17.7%. Other players include SEKAvin, SEKA and ETEKA with 10.1%, 8.9% and 6.1% respectively. There are about two dozen active suppliers in the Greek market. Among the currently minor players, Chevron’s FAMM is growing quickly with 2.3% of the market in 2009 compared to 1.4% in 2008.

A tough year

JetOil’s general manager, Alexander Prokopakis, admits 2009 was a tough year but he told World Bunkering that he hoped the cruise business would give the bunker market a lift from May onwards. He said the return of bunker prices to more normal levels from $600 to around $450 to $500 had helped as obtaining credit has become a big issue. He hoped the shipping market in general would pick up after September but currently Greece was losing out to other bunkering centres on price. He adds that demand for low-sulphur fuels is picking up, though still small.

While Greece’s financial problems have hit the headlines they have had, says Mr Prokopakis, little impact on the country’s bunker market. On the other hand, the global recession has had a marked effect on the competitive situation within the Greek market, with margins under great pressure. Suppliers have had to fight for market share from a shrinking pie. There has been a tendency to accept very low prices rather than lay-up bunker tankers.

Coping with the downturn

Sotiris Delidimitriou, operations manager for international bunker broker and trader Praxis Energy Agents says his company has been active in the Greek market for over 15 years. Echoing the views of other players in the Greek market, he is proud his firm has been able not only to survive in such a fiercely competitive environment but has managed to prosper and expand to New York, Singapore and Hamburg. Looking at the local scene he says: “The Greek market has certainly seen better days but we feel confident that it is simply a matter of time for things to improve.” He says that Praxis works closely with the largest Greek shipowning and managing groups as well as with charterers. Relationships built on trust would appear to be the key to success in the Greek market.

“Bunker demand during 2009 was mostly a bit lower than in 2008, and recent studies show that we shouldn’t expect a significant recovery during 2010, especially during summer months when demand is traditionally lower,” he says. Looking at the fundamentals of the bunker market he says: “Forecasting future oil movement is very difficult but bunker demand should be less than the rising supply, as oil production presently hit record levels in Russia. OPEC had also increased production to the highest level in around one year, by November 2009. The global economic crisis is likely to dampen demand for bunkers but we should expect to see further signs of growth from the Far East.

Mr Delidimitriou adds: “Undoubtedly, the main effect of the economic downturn has been reduced demand but we also have to consider other consequences of the downturn. For example, small or medium-sized trading houses that built their profitability, and often survival, on relationships with just one or two clients, got into problems if those owners themselves had to sell vessels, or had reduced requirements. Worse, some had to close down, with a knock-on effect for bunker traders, brokers and suppliers.”

“The trading companies that have survived,” he says, “have been forced to squeeze their profit margins in an effort to attract as many enquiries as possible. Additionally, we have seen some physical suppliers decreasing their credit facilities from 30 days down to 21 days or in a few cases even down to 15 days from date of delivery.”

Some physical suppliers working directly with owners have, it appears, taken a very hard line on credit. As some shipowners already have cashflow problems, the restriction of credit for bunkers can make it even more difficult for them to pay for fuel.

LS demand shapes market

On changing patterns of demand for various grades, Mr Delidimitriou says: “Surely the greatest shift in the type of bunkers bought has been noticed with low-sulphur products in general and low-sulphur gas oil grades that all vessels have to consume when visiting ports within the EU in particular. It is worth mentioning that an increase has also been noticed in demand for heavy fuel oil as more and more vessels, especially newbuildings, can use the more economical and heavier fuel grades.”

He concludes: “The introduction of 1.0% sulphur in July 2010 will add more difficulties, as buyers need to pay more attention when they purchase bunkers and it will have a big impact on their operational expenses.”

Greek influence on the wane?

Greece is not just important to the global industry as a major national market and a key hub for the Western Mediterranean. A large part of the world fleet is controlled from Athens/Piraeus. Latest figures provided by Lloyd’s Register, Fairplay, for the London-based Greek Shipping Co-operation Committee (GSCC) do show Greek interests own fewer ships and less tonnage than they did a year ago. On 2 February this year, Greeks controlled 3,996 vessels of various categories, of 258 million total deadweight and 153 million total gross tonnage, including 826 newbuilding vessels of 40 million gt. Compared with a year previously this represents a decrease of 165 vessels, 543,885 dwt and 359,857 gt.

Nevertheless, as the GSCC comments: “This is a considerable decrease, but given the turbulent economic year, not as significant as was initially feared.” Greek interests now control around 8% of the world’s total number of vessels in service and on order, 14.9% of the world fleet deadweight, or 13% of the world fleet expressed in gross tonnage, only very slightly down in each case from 2009.

The concentration of shipowners in the Athens/Piraeus area attracts traders and brokers who do not specialise in the Mediterranean market. Recently, Hong Kong and Singapore-based bunker supplier and trader Coastal Oil Holdings established an operations centre in Athens, as a sales office for its Asian customers and also as a general trading office.