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Inatech develops app to tackle post-2020 shipping fuel complexity

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Hydrocarbon Engineering,

Inatech, a unit of Glencore that specialises in energy trading risk management systems, has built the ‘Smart Trader’ app to enable companies to map their entire fleet of ships and visualise best routes given sea and port conditions to achieve lowest prices for the desired quality of fuel.

The toolkit leverages bunker alerts and pricing data from S&P Global Platts. Torm, the tanker company that’s one of the world’s biggest carriers of refined oil products, worked with Inatech on the app’s design and is among the first clients.

Major international shipping companies are investing in technology ahead of the implementation of the International Maritime Organization’s (IMO) rules to limit sulfur emissions to 0.5%, from the current ceiling of 3.5%, which come into effect from January 2020. S&P Global Platts Analytics estimates that complying with the IMO’s cap will add US$60 billion to fuel costs in 2020.

“Improved technology is vital because the new IMO rules will not only increase costs but could also trigger unprecedented volatility in prices as a widening array of choice between the various fuel oil types skews supply and demand dynamics in what is still a relatively opaque market,” said Inatech CEO Jean-Hervé Jenn. “That motivates our push to broaden the available options for bunker buyers, who will suddenly be immersed in an infinitely more complex market in less than a year’s time.”

With an expected jump in bunker fuel price volatility, Smart Trader enables companies to track their vessels on an integrated system that manages fuel levels on board and updates with live prices and news for supply en route. The interactive platform not only displays which ships in the fleet are running low on fuel but whether their fuel type is compatible with availability and optimal pricing in the direction of travel and, if it is not, what would be the most optimal rerouting. Potential suppliers are checked for quality and credit references to control counterparty risk. The technology moves the bunker buyer from operational to analytical, continually dissecting and analysing quotes as they are updated from the full suite of international suppliers.

The app is powered by comprehensive S&P Global Platts data spanning refined wholesale and retail marine fuels including all standard ULSFO, LSFO, IFO, MGO and MDO grades at more than 350 ports worldwide, along with regional indices, 28 day spreads, and moving averages. Smart Trader also includes Platts’ new IMO 2020 compliant 0.5% sulfur cargo price assessments for the ports of Rotterdam, US Atlantic Coast, US Gulf Coast, Fujairah and Singapore, along with intraday news and feature articles to round out a full picture of the global bunker markets.

Specifically, Smart Trader addresses five key risks in the three-month run up to 1 January 2020: market risk (price volatility), availability of required fuel type at destination port, ensuring quality control on the array of new fuels, ensuring fuel compatibility with ships’ tanks, how to check counterparty risk (credit).

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