Platts’ New 0.5% Marine Fuel Price Assessment Hits $366.18/mt in Singapore

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  • S&P Global Platts has pegged 0.5% sulfur marine fuel delivered in Singapore at US$366.18/tonne.
  • The price is based on the notional bids, offers and transactions on Platts’ Market at Close online system (MOC).
  • The pricing indicates a premium of US$44.50/tonne to the mean of Platts Singapore 380 CST high sulfur fuel oil.
  • It also indicates a premium of US$41.99/tonne to 180 CST HSFO.

The global commodities and price assessment provider S&P Global Platts has pegged 0.5% sulfur marine fuel delivered in Singapore at US$366.18/tonne, 12 months ahead of the IMO global sulfur cap introduction, says a report.

How was the price decided?

The price is based on the notional bids, offers and transactions on Platts’ Market at Close online system (MOC) at 07:00 GMT on Wednesdays. The MOC system also assesses similar trades in the region. According to MOC, the notional value for FOB Singapore Marine Fuel 0.5% cargoes for 17 January-1 February loading is at a premium of US$44.50/tonne to the mean of Platts Singapore 380 CST HSFO, equivalent to about US$371/tonne.

Platts’ reported two significant trades

Oil major BP submitted a bid for 20,000 tonnes of 0.5% marine fuel on a FOB Singapore basis for 22-26 January 2019 loading at US$335/tonne before lowering this to US$332/tonne. The energy group also offered a similar volume of 0.5% marine fuel for 22-26 January ship-to-ship loading from its floating storage unit Grace Star at US$395/tonne.

Mitsui Energy Trading Singapore also offered 20,000 tonnes of 0.5% marine fuel for 27-31 January ship-to-ship loading from its floating storage unit Energy Star at a premium of US$75/tonne to the average of the mean of Platts Singapore balance January 180 CST high sulfur fuel oil assessments.

What does this mean?

The pricing indicates a premium of US$44.50/tonne to the mean of Platts Singapore 380 CST high sulfur fuel oil and a premium of US$41.99/tonne to 180 CST HSFO. These have been attempts to gauge the impact on the expected premium ahead of the IMO global sulfur cap introduction on 1 January 2020.

  • Shipping accountants and consultants Moore Stephens conducted a survey in which 23% of the respondents felt the premium would be between US$175/tonne and US$249/tonne.
  • Poten & Partners’ senior analyst Erik Broekhuizen has analyzed the impact on tanker charterers.
  • An 80-page study by AXSMarine’s tanker market analysis arm Alphatanker predicted that VLCC owners with scrubbers fitted on their vessels could see savings of more than US$40,000 per day.
  • Others have stated the premium could be as high as US$600/tonne but Platts’ was quick to point out that the current assessment is based on the current thin level of demand for 0.5% sulfur fuel.

Valuable Data for Compliance Strategies

The introduction of Platts’ low sulfur marine fuel price assessment is valuable data for owners and operators analyzing their compliance strategy for the IMO 2020 global sulfur cap. In related news, Bomin’s group credit manager Paul Millar told Ship & Bunker News that an owners’ choice of compliance strategy would not impact their credit lines. Mr. Millar felt that regardless of the price of the fuel, credit risk remained with the client and that it was the soundness of the client that was the main criteria.

 

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Source: MPropulsion

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