Asian benchmark low sulfur marine fuel cargo market was likely to be rangebound in the near term on ample availability amid expectations that valuations for downstream low sulfur marine fuel bunker would be capped on less-than-robust demand, reports Platts.
Reflecting a none-too-upbeat sentiment, the market structure at the front of the Singapore marine fuel 0.5%S swaps curve was trading unchanged at $2/mt from its Asian close on Aug. 13, broking sources said.
Marine fuel 0.5%S
- Singapore’s July bunker fuel sales fell 2.3% on the year, or 1.2% on the month, to 4.06 million mt, preliminary data released on Aug. 13 by the Maritime and Port Authority of Singapore showed.
- A lukewarm demand for low sulfur bunker is attributed to competitive prices at North Asian ports like Zhoushan in China and Ulsan/Busan in South Korea, traders said.
- Demand outlook for August is likely to be steady at best to slightly weaker on relatively lesser inquiries so far this month, traders said.
- Singapore-delivered marine fuel 0.5%S premium over Singapore marine fuel 0.5%S cargo assessments are likely to trade in a $7-$8/mt range, down from an average of $8.48/mt in the week ended Aug. 13.
- Still, sellers were said to be holding offers for the supply of Singapore ex-wharf marine fuel 0.5%S for balance August dates steady at a premium of $3.25-$3.50/mt over Singapore marine fuel 0.5%S cargo.
- July bunker sales in the Middle Eastern port of Fujairah rose 2.8% on the month to 690,339 cu m, the highest so far this year, latest data from Fujairah Oil Industry Zone showed.
- Industry sources expect demand for Zhoushan-delivered marine fuel 0.5%S to hold steady despite premium inching higher. Some buyers were, however, said to be holding off from meeting their requirements just yet on hopes that flat price may come off in the ensuing days.
- The premium for Zhoushan-delivered marine fuel 0.5%S over FOB Singapore Marine Fuel 0.5%S cargo assessments averaged $8.13/mt ion the week ended Aug. 13, up from the previous week’s average of $6.84/mt, S&P Global Platts data showed.
- In Hong Kong, traders said that availability is expected to be ample in the near term as replenishment cargo for two major suppliers were expected to arrive over the past weekend.
- In Japan’s Tokyo Bay, bunker supply was expected to return to normal after slightly inclement weather conditions and port congestion hampered operations in the week ended Aug. 13, traders said. Ample availability of both high sulfur and low sulfur bunker fuel, however, meant that valuations stayed rangebound, a trend expected in the ensuing days too, traders added.
High sulfur fuel oil
- The Asian high sulfur fuel oil market was also likely to remain rangebound, and any significant uptick in valuations from prevailing levels was unlikely, traders said.
- A lackluster sentiment was underpinned by expectations that peak summer burning demand for the product from the utility sector was likely already met.
- Reflecting this sentiment, the market structure at the front of the Singapore 380 CST HSFO swaps curve was said to be pegged at around $4.75/mt for mid-morning trades on Aug.16, down from its Asian close of $5.05/mt on Aug. 13.
- On the downstream end-user bunker fuel market though, valuations were likely to be sustained, if not inch higher from prevailing levels on relatively thin availability, traders said.
- Offers for the supply of ex-wharf Singapore 380CST bunker for balance August dates were currently being made at a premium of around $3.5/mt up from offers of around $3/mt made earlier in the week ended Aug. 13, traders said.
- Tight availability of high sulfur bunker fuel at Fujairah had also led some buyers to look at Singapore instead, traders said.
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Source: Platts
