Asia Residual Fuels: Key Market Indicators for Sep 27-Oct 1


Marine fuel 0.5% supply in China and Hong Kong is looking stable for the week ahead, according to the bunker suppliers there, while barge availability has tightened in Tokyo Bay due to inclement weather, says an article published in S&P Global.

Marine Fuel 0.5%

Discussions for the Singapore Marine Fuel 0.5%S October/November spread Sept. 27 were stable from the Sept. 24 assessment of $2.60/mt, with bids for the spread at $2/mt against offers at $2.75/mt, according to Intercontinental Exchange data.

Supply in China and Hong Kong is expected to remain sufficient for marine fuel 0.5%S grade for the week started Sept. 26, market sources said.

In Japan, however, barge availability has tightened in Tokyo Bay, bunker traders said. “[We have] no quote for September delivery due to barge congestion and typhoon, the earliest delivery date is Oct. 2 or Oct. 3,” said a bunker trader.

In South Korea, bunker premium to Singapore marine fuel 0.5%S cargo surged to a 3-month high of $51.31/mt on Sept. 24, as suppliers raised offer prices to reflect higher prices for bunker delivery, which is only available from the first week of October onwards.

Inquiries for October delivered marine fuel 0.5%S requirements have already started trickling in, while demand for September requirements has “dried up”, industry sources said during the week ended Sept. 25.

Sluggish demand in September capped differentials between Singapore-delivered marine fuel 0.5%S and the ex-wharf grade, or barging spread, below the breakeven price of $5-$8/mt, so time-charter rates for bunker barges are expected to soften in the near-term, traders said.

As of Sept. 24, the barging spread of marine fuel 0.5%S bunker averaged $3.92/mt in September, down from $5.06/mt in August, Platts data showed.

Bunker suppliers said that the oversupply of low sulfur fuel oil bunkers in Fujairah coupled with lackluster demand from liners and tankers throughout September continue to depress premiums of Fujairah-delivered marine fuel 0.5%S.

Premiums of Fujairah-delivered marine fuel over Singapore Marine Fuel 0.5%S cargo assessments averaged $2.07/mt so far in September, down from August’s average of $2.50/mt.

High sulfur fuel oil

Discussions for the Singapore 380 CST high sulfur fuel oil October/November spread Sept. 27 declined to $8.25/mt from the Sept. 24 assessment of $8.70/mt, according to Intercontinental Exchange data. Bids for the spread stood at $7.75/mt against offers at $8.50/mt.

On the supply front, Iraq’s State Oil Marketing Organization is due to announce the results of its October loading cargo sell tender later in the week, according to participants in the tender.

The company had earlier issued a Q4-loading straight-run high sulfur fuel oil tender but ultimately canceled it, according to one market participant, deciding to sell its cargo on a monthly basis instead.

Amid limited offers for spot availability of Singapore-delivered 380 CST HSFO due to tight inventories, buyers are contending with steep premiums to meet their October bunker requirements, sources said.

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Source:  S&pGlobal


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