Discussions in the Singapore marine fuel 0.5% ex-wharf market for the last week of 2021 are expected to remain muted amid the holiday season, with a similar trend expected in North Asia, says an article published in Platts.
The supply of high sulfur fuel oil in Asia received a small boost with Kuwait’s KPC selling another spot cargo loading in the first week of January, adding to already ample supply, albeit mostly off-specification, in the Singapore and Fujairah markets, traders in both locations said.
Morning discussions for the February ICE Brent futures contract were trading at $78.78/b at 0300 GMT Dec. 28, up from $76.02/b at 0430 GMT on Dec. 24, Intercontinental Exchange data showed.
Marine Fuel 0.5%
Discussions for the Singapore Marine Fuel 0.5%S January/February spread Dec. 28 rose $19/mt, according to brokers’ indications, with the spread bid at $17.25/mt against an offer at $22/mt, according to Intercontinental Exchange data.
In North Asia, the bunker market is expected to remain quiet amid the festive season, with Japanese refiners having finished taking orders for deliveries until Jan. 4 ahead of the year end/new year holiday, local suppliers said.
The earliest delivery date Japanese refiners can accommodate for deliveries is Jan. 5, but market sources said barges will be tight until Jan. 10, especially in west Japan.
South Korean bunker supply is likely to remain ample. “There is excess supply. I don’t see many queries in the market,” said a bunker trader.
Though Hong Kong is largely well supplied with low sulfur fuel oil stockpiles amid recent arrivals of replenishment cargoes, ex-wharf premiums for January term supply is expected to stay firm, according to market sources. Cargoes are ample, said a Hong Kong-based supplier.
In mainland China, although low sulfur bunker supply at Zhoushan is expected to stay sufficient at least through the first week of January, recent shipments to Singapore have slightly tightened inventories to shore up delivered marine fuel 0.5%S bunker premiums, traders said.
High sulfur fuel oil
Discussions for the December 380CST high sulfur fuel oil January/February spread were stable Dec. 28 at minus $0.25/mt, compared with the Dec. 24 assessment at the same level, according to Intercontinental Exchange data.
Kuwait Petroleum Corp. sold yet another cargo of HSFO loading over the first week of January to Vitol, according to market sources, after selling a similar 80,000 mt cargo loading over Dec. 24-25 to Chevron, which is expected to make its way to the Singapore market.
“Right now, HSFO supply is looking quite comfortable in Asia, with demand fairly stable,” said a Singapore-based fuel oil trader.
Supply tightness of 380 CST HSFO bunker in Zhoushan is expected to ease amid rising fuel oil stocks, market sources said. Supply tightness had earlier raised the delivered Zhoushan 380 CST bunker premium to Singapore 380 CST high sulfur fuel oil cargo, market sources said, making it economically feasible to bring HSFO cargoes from Singapore to Zhoushan, a fuel oil trader said, thus narrowing the arbitrage.
Although spot demand for delivered HSFO at Zhoushan was said to be inconsistent, competition in the delivered HSFO space is expected to intensify as CEFC International diversifies into HSFO and joins the fray.
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Source: Platts
