World Bunkering > News > Summer 2010 > Downturn hits down under

Lena Johnston of Australia Bunkers comments: “In short, yes there has been a downturn, when you consider every supplier and probably every trader experienced a bumper year in 2008, we certainly did. Even the first quarter of 2009 was looking to top 2008, then it turned the other way. I guess if you had to put it in percentages you could say it’s been around a 30% decrease.”

Ms Johnston notes too that there has been consolidation of the lines trading to Australia and this has also contributed to the downturn in the volumes. This has not been helped by the country’s generally weak competitive position in the bunker market. Traditionally, Australia has always been a top-up port; recently owners have become more reluctant to take on bunkers unless essential.

Sydney-based Australia Bunkers was set up as recently as 2007 but has quietly increased its business, with monthly volumes now running at around 16,000 tonnes a month. Ms Johnston says that as with the rest of the global bunker industry, credit and counterparty risks have become major concerns.

Market round-up

Among recent developments in the country’s bunker scene, Caltex Australia has boosted its Brisbane presence by long-term chartering the 1999 Australian-built, double-hull Bunker V. The tanker replaced a dumb barge and tug operation.

Barges are on the move elsewhere. Newcastle should have a barge operating by the last quarter of 2010, with the ability to supply 380 cSt and 180 cSt. This could provide a challenge for Gladstone which is currently, market sources report, still the cheapest bunker-only call in Australia. Meanwhile, Dampier’s barge is reported to be fully operational. In Sydney Harbour a new barge is expected to be in service at Port Jackson towards the end of this year.

Cleaning up

While the bunker supply business in Australia may be fairly subdued at present, bunkers have made the headlines recently, for the wrong reasons. There have been two well publicised accidents which led to the leaking of fuel oil. Initial fears of a serious bunker spill were not realised following the 3 April grounding of the Chinese-flag bulk carrier Shen Neng 1 on the Great Barrier Reef, with only about 4 tonnes leaking out.

Nevertheless, this latest incident comes after significant pollution of the Queensland coast last year, caused by some 230 tonnes of oil which leaked from the Pacific Adventurer. The containership lost some of its deck-stowed containers overboard during Cyclone Hamish, gashing the hull and breaching a fuel tank. Bunkering in Australia has long operated under intense environmental scrutiny and that is unlikely to diminish.

There is, however, still considerable optimism in the market. Steffen Poulus, the branch manager of OW Bunker Australia, another recent entrant to the Australian bunker scene, says: “Despite the economic downturn, shipping is critical to the Australian economy, a region that is so rich in natural resources and relies heavily on export. Coupled with the developments in the offshore market, and the LNG sector, Australia is a market of opportunity that we are determined to capitalise on.”

He adds: “While the fishing cruise and bulker sectors are the mainstay of the Australian shipping industry, there is significant opportunity in the thriving offshore market, particularly the development in the extensive oil and gas regions of the North West Shelf. There is also real opportunity on the back of the A$50 billion Gorgon petroleum project in Western Australia, which involves the development of the Greater Gorgon gas fields, providing fuel products and services to the support and supply vessels, as well as the LNG vessels once the project is concluded.”