The Singapore marine fuel 0.5%S bunker market is unlikely to see any significant upside from prevailing levels in the week of April 5-9 due to lackluster sentiment in the upstream Singapore marine fuel 0.5%S cargo market, traders said.
A bearish sentiment in the upstream cargo market was attributed to ample supply amid a lack of incremental demand, reports platts.
Curve has Inched Lower
Reflecting this, the market structure at the front of the marine fuel 0.5%S swaps curve has inched lower. Singapore marine fuel 0.5% balance April/May swap, which was assessed at minus 20 cents/mt on April 1, was pegged lower at minus 50 cents/mt in mid-morning April 5 trades, brokers said.
Market sources estimate 2.8 million-3 million mt of low sulfur material to arrive each in March and April.
March Loading Product
Refiners within the region are also looking to up LSFO output on relatively better margins as compared with cleaner transportation fuels.
As such, Singapore ex-wharf marine fuel 0.5%S bunker premium for April-loading has tapered off to be concluded at a premium of $2.75-$3/mt over Singapore marine fuel 0.5%S cargo assessments as compared with the $4.50-$5/mt premium at which ex-wharf term deals were inked for March-loading product.
Easing of Tight Availabilities
In Fujairah, an easing of tight availabilities saw the spread between Singapore and Fujairah Marine Fuel 0.5%S assessments return to positive at $2.88/mt on March 30, Platts data showed. The spread has since inched higher and was assessed at $5.01/mt on April 1.
Last week ended April 1, Fujairah-based bunker suppliers, confirmed their ability to once again offer low sulfur marine fuel 0.5%S bunker for prompt delivery dates, after domestic supply was compromised earlier in March when Uniper’s 80,000 b/d refinery suffered an unexpected outage in the week of March 7, shutting both crude processing units.
Ramp up Domestic Production
The North Asian bunker markets are also expected to be pressured by ample supply. In China, as refiners ramp up domestic production, bunker supply is ample, Zhoushan and Shanghai based traders said.
In Tokyo Bay, berth congestion, which supported delivered bunker prices until the end of March, is easing as Eneos has completed berth maintenance, market sources said. The spread between Tokyo Bay-delivered marine fuel 0.5%S bunker and Singapore marine fuel 0.5%S cargo dropped to $26.61/mt on April 1, the lowest since March 18, Platts data showed.
Bunker Fell Below
Ample supply amid weak demand has also led low sulfur bunker prices at South Korean ports of Ulsan and Busan to slip below that of Japan. South Korea-delivered marine fuel 0.5%S bunker fell below Tokyo Bay-delivered marine fuel 0.5%S bunker on March 29 for the first time since Feb. 19, Platts data showed.
Singapore 380 CST high sulfur bunker fuel end-users were waiting to take a cue from the direction that the upstream cargo market was likely to take in the week to April 9, Singapore-based bunker suppliers said.
Prevailing Healthy Availabilities
Even as traders pin their hopes on incremental demand from Asia’s utility sector, with the region heading into peak summer season, the prevailing healthy availabilities has done little to lift market sentiment as yet.
The premium for Singapore 380 CST high sulfur fuel oil cargo assessments over the Mean of Platts Singapore 380 CST HSFO has averaged 92 cents/mt in the week ended April 1, down 52 cents/mt from the previous week’s average, Platts data showed.
The premium for the erstwhile mainstay 380 CST high sulfur bunker slipped $3.57/mt week on week to average $9.73/mt in the week ended April 3 as compared with the previous week’s average of $13.30/mt, Platts data showed.
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Source : S&P Global
