Asian Marine Fuel Market Experiences A Lull As Trade Picks Up


  • Singapore Marine Fuel 0.5%S May/June swaps spread, assessed at minus $8.25/mt.
  • Stockpiles of low sulfur material in Singapore remained at approximately 10 million mt.
  • Singapore-delivered marine fuel 0.5%S bunker fuel premium touched an all-time low at $7.39/mt.
  • CST HSFO cash differential plunged to a four-year low and fell $1.68/mt day.

According to an article published in Platts, the mainstay Singapore 0.5%S marine fuel market was expected to garner support at prevailing levels.

Optimism underpinned by a drop in arbitrage flows

If not inch higher by any fair measure, as trading activity picks up for second half May loading cargoes. The optimism was underpinned by expectations of a drop in arbitrage flows of the IMO-compliant product for May’s arrival.

Marine fuel 0.5%S

  • An easing of the bearish sentiment was reflected in the market structure at the front of the Marine Fuel 0.5%S swaps curve, which was seen trading at steady levels compared with the Asian close Thursday.
  • Singapore Marine Fuel 0.5%S May/June swaps spread, which was assessed at minus $8.25/mt at the Asian close Thursday, was pegged unchanged in midmorning trade Monday, broking sources said.
  • While stockpiles of low sulfur material in landed and floating storage in and around Singapore have remained unchanged from the previous week at approximately 10 million mt, a drawdown in stocks is likely as the arbitrage volume for May is expected to be sizably lower than for April, said traders.
  • The optimism was also underpinned by talks that the end-user bunker market is likely to see steady to slightly higher demand in April from March.
  • Even so, the current supply overhang led Singapore-delivered marine fuel 0.5%S bunker fuel premium to the benchmark Singapore Marine Fuel 0.5%S cargo to touch an all-time low at $7.39/mt Thursday.

High sulfur fuel oil

  • On the high sulfur fuel oil cargo side though, the outlook was grim on account of current supply overhang coupled with sluggish demand, said traders.
  • Singapore 380 CST HSFO cash differential to the Mean of Platts Singapore 380 CST HSFO assessments plunged to a four-year low Thursday.
  • It fell $1.68/mt day on the day at minus $5.41/mt Thursday, the lowest since October 21, 2015, when it was assessed at minus $5.53/mt, S&P Global Platts data showed.
  • The outlook for the week did not look vastly promising either, with the Singapore May/June 380 CST HSFO swap spread trading largely unchanged in morning trade Monday at around minus $5.75/mt, as thin discussions showed only an offer for the spread at minus $5.50/mt, said broking sources.

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Source: Platts


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