- Term premiums for December ex-wharf LSFO and HSFO contracts in Hong Kong rose due to supply tightness, while demand remained steady.
- Hong Kong-delivered LSFO and HSFO cargo premiums over FOB Singapore values increased significantly from November to December.
- December ex-wharf low-sulfur marine gasoil premiums were slightly lower than November, reflecting balanced supply-demand conditions.
The Hong Kong marine fuel market experienced notable shifts in December, driven by fluctuating supply conditions and stable demand. Term premiums for low-sulfur fuel oil (LSFO) and high-sulfur fuel oil (HSFO) rose, reflecting tightness in the supply chain and disruptions from weather events like typhoons, reports SP Global.
Rising LSFO Premiums Amid Supply Tightness
December term premiums for ex-wharf low-sulfur fuel oil (LSFO) in Hong Kong ranged from $45-$49/mt, higher than November’s $35-$39/mt due to tighter supplies. Delays caused by typhoons and monsoon-related disruptions pushed November cargoes into early December, exacerbating the temporary supply constraints.
However, replenishments arriving by mid-December eased availability issues, ensuring prompt deliveries from December 13 onward. Steady LSFO demand supported the higher premiums, reflecting robust market dynamics.
HSFO Market Sees Higher Premiums Despite Ample Supply
Term ex-wharf high-sulfur fuel oil (HSFO) premiums for December-loading cargoes settled at around $45/mt, marking an increase compared to $32-$40/mt in November and October.
Despite ample supply to meet demand, HSFO saw limited end-user uptake, likely contributing to a moderate price increase. Hong Kong-delivered HSFO premiums over FOB Singapore values averaged $50.92/mt in December, up from $40.56/mt in November.
Stable Gasoil Market with Balanced Dynamics
The low-sulfur marine gas oil (MGO) market remained stable in December, with term premiums slightly declining to $21/mt from $22.35/mt in November.
Steady demand and sufficient supply underpinned balanced market conditions. Minor price fluctuations were attributed to tight barging schedules from a few suppliers rather than systemic issues.
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Source: SP Global
