India’s bitumen sector shrugs off curbs on ageing ships
India’s bitumen market expects to see minimal impact from new shipping regulations, which will halt the issuing of trading licences for oil tankers and other vessel types that have surpassed their maximum age limit of 25 years.
The new rules, which came into effect on 24 February, apply to Indian registered and foreign-flagged vessels that require a licence from the Directorate General of Shipping.
Bitumen importers told Argus that the rule applies for any vessel owned and operated under Indian or foreign flag by an Indian trading firm or chartered by an Indian trading firm to import bitumen into the country. India is a net importer of the road paving material and ships in supplies mostly from the Middle East.
Although some market participants said it is likely to limit the number of vessels and increase the bulk bitumen freight costs from the Middle East to India, the impact is expected to be minimal as there are only few ageing bitumen tankers in the region.
An immediate impact of this new regulation is also unlikely as the vessels affected by the specified age limit will be allowed to operate up to three years from the date of the order. This will depend on whether the vessel can meet the CAP 1 rating criteria for hulls and minimum CAP 2 rating for machinery and cargo systems. The number of vessels falling into the maximum age limit was unable to be determined.
Bulk bitumen freight rates from the Middle East to west coast India has been firm at around $90-100/t in the past few months because of loading delays at Middle East ports, which has incurred higher demurrage costs for participants. The port delays are resulting in a limited number of vessels being available for chartering.