Traders closely follow last-minute fixtures over Aug. 23-28 for incremental volumes landing in Singapore next month, reports Platts.
Asian VLSFO
Lesser regional production in the Asian very low sulfur fuel oil market heading into September is expected to balance sluggish demand, while traders will closely follow last-minute fixtures over Aug. 23-28 for incremental volumes landing in Singapore next month.
Morning discussions for the October ICE Brent futures contract were trading at $65.88/b at 0230 GMT Aug. 23, down from the $66.49/b level at 0830 GMT Aug. 20, Intercontinental Exchange, or ICE, data showed.
Marine Fuel 0.5%
Discussions for the Singapore Marine Fuel 0.5%S September/October spread rose from the Aug. 20 assessment of $3/mt, with bids at $3/mt against offers at $3.25/mt, according to the ICE data.
Tighter regional Marine Fuel 0.5% sulfur production in September is expected to support the South Korean delivered bunker prices, according to local refiners, with SK Energy and Hyundai Oilbank expected to shut their residue desulfurisation units for maintenance in September and October.
Competition between the refiners
Fierce competition between the refiners for South Korean delivered Marine Fuel 0.5% bunkers is expected to cap any rise in the last week of August, according to local bunker traders.
SK Energy, S-Oil and Hyundai Oilbank were heard to have been actively offering spot bunker fuel to get orders, even as August is typically a quiet month in terms of demand, bunker sources said.
South Korea’s Marine Fuel 0.5%S bunker premium over Singapore Marine Fuel 0.5%S cargo sank to $26.48/mt on Aug. 20, the lowest since Aug. 5, S&P Global Platts data showed.
In Singapore, bunker suppliers are expecting less-than-average buying interest as buyers stay on the sidelines awaiting pricing cues.
Industry sources said that the waning availability of cutter stocks for blending of low sulfur fuel oil to International Maritime Organization-compliant standards would lift premiums of Singapore ex-wharf Marine Fuel 0.5%S for supply in September.
Offers for September supply of Singapore ex-wharf Marine Fuel 0.5%S were heard to have been at a premium of around $3.75/mt over FOB Singapore Marine Fuel 0.5%S cargo assessments during the week ended Aug. 20, up from premiums of around $3.50/mt for the balance August supply.
Singapore-delivered Marine Fuel 0.5%S premium to Singapore Marine Fuel 0.5%S cargo averaged $7.86/mt during the week ended Aug. 20, down 86 cents/mt from the previous week’s average, Platts data showed.
High sulfur fuel oil
Discussions for the Singapore 380 CST high sulfur fuel oil September/October spread rose to $6.50/mt Aug. 23 from the Aug. 20 assessment of $6.25/mt, according to the ICE data. Bids for the spread stood at $6.25/mt against offers at $6.75/mt.
Waning demand for imported 180 CST high sulfur fuel oil market in South Asia — as peak summer demand starts to flag — is expected to see the cash differential for the FOB Singapore 180 CST HSFO assessment weaken in September, according to Singapore-based traders who supply cargo in the region.
Meanwhile, in the Middle East, stocks of heavy distillates at the UAE’s Port of Fujairah, which include fuel for power generation and marine bunkers, tumbled 9.96% on the week to reach a four-month low of 9.77 million barrels, the Fujairah Oil Industry Zone data showed.
The Fujairah-delivered 380 CST high sulfur fuel oil has seen high premiums due to tightened supplies, with only three suppliers providing HSFO at Fujairah. Two out of the three suppliers are said to be having limited availability, according to traders.
On Aug. 20, industry sources told Platts that Montfort entered the fray as the eleventh licensed bunker supplier at the Middle Eastern port of Fujairah to supply HSFO, VLSFO and LSMGO bunkers from September onwards, at a time when the market is starting to indicate signs of a rebound.
The premium of Fujairah-delivered 380 CST HSFO to that of 380 CST FOB Arab Gulf cargo 3.5%S averaged $27.43/mt in July, and $37.69/mt over Aug. 1-19, Platts data showed.
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Source: Platts
