CONTINUED DEMAND FOR CREDIT WILL LEAD TO MORE CONSOLIDATION AMONG BUNKER COMPANIES – SAYS DYNAMIC OIL TRADING
Suppliers without liquidity will lose out to financially robust organisations offering better terms
Singapore, 27 May 2014 – Dynamic Oil Trading, the global trading company for marine fuels and lubricants, today highlighted liquidity and credit as the single biggest challenge in the shipping industry when it comes to fuel supply. The company believes that the impending 0.1% ECA (Emission Control Area) regulations and the increase in distillate use, which will require a demand for more credit from ship owners and operators, will lead to further consolidation amongst bunkering companies.
“In today’s bunker market, cash is king and those in the market who lack the financial strength and access to capital will find it very hard to compete and grow, ” says Lars Møller, CEO, Dynamic Oil Trading.
“This trend will become more acute following the introduction of the 2015 ECA regulations due to increased distillate use. Put simply, customers operating in ECAs and burning distillates to comply, will require significantly more credit than those operating outside ECA waters. While we are fortunate at Dynamic Oil Trading to have the financial resources, many bunkering companies are already finding it hard to finance the shipping industry in its current form; having to further increase credit will act as a catalyst for more consolidation.”
Dynamic Oil Trading also believes that as the demand for credit increases, so too will the stringency over counterparty risk.
“As the amount of credit increases, so does the risk. The financial viability of who we provide credit to is critical, and the due-diligence that is conducted will be of paramount importance. Of course at the centre of this is ensuring transparency and trust in the relationship between the supplier and the customer, as well as access to financial information. As 2015 becomes ever closer, we are working with our customers to ensure that they fully understand the impact and to plan supply accordingly and to understand the impact on their business and operations.”
About Dynamic Oil Trading
Dynamic Oil Trading was launched in 2012. The company is headquartered in Singapore and operates globally, with plans for further expansion in Asia, Europe and the Americas. Dynamic Oil Trading goes back to the roots of bunkering, working with, and trusted by, all parties in the shipping supply chain. The company has experienced traders that thrive on operating within in a fast-paced, high-energy environment to provide customers with fuel and lubricant products quickly and efficiently, no matter what the challenge.