- Argentina and Brazil-produced 0.5pc sulphur fuel oils are the least expensive in Latin America.
- They are offering 0.5pc sulphur fuel oil in local ports at the beginning of October and discontinued offering HSFO for bunkering.
- A two-tiered price market is expected to form in Panama for spot 0.5pc sulphur fuel oil.
According to an article published in Argus Media, Argentina and Brazil-produced 0.5pc sulphur fuel oils are the least expensive in Latin America and are less volatile price-wise than those produced in Panama, which rely on fuel imports.
0.5pc sulphur fuel oil
Suppliers in Argentina and Brazil started offering 0.5pc sulphur fuel oil in local ports at the beginning of October and discontinued offering high-sulphur fuel oil (HSFO) for bunkering. Suppliers appear to have seamlessly transitioned to selling the 0.5pc sulphur fuel oil from selling HSFO.
Demand has been rising in Buenos Aires in Argentina and Brazil’s two busiest bunkering ports, Santos and Rio de Janeiro. On 2 October Argus introduced 0.5pc sulphur fuel oil bunker assessments in Argentina and began publishing Petrobras 0.5pc sulphur posted prices in Brazil.
Two-tiered price market
A two-tiered price market is expected to form in Panama for spot 0.5pc sulphur fuel oil. Inquiries for two weeks ahead delivery are indicated as high as prices of marine gasoil (MGO), as prices for the International Maritime Organization (IMO) 2020 compliant product increase closer to the start date for new low-sulphur runs on 1 January. By comparison inquiries for prompt deliveries of 0.5pc sulphur fuel oil are priced lower.
Suppliers in Panama have been importing blending components as well as ready 0.5pc sulphur fuel. Oil analytics company Vortexa showed three shipments of cycle oil discharging in Panama in recent months: two shipments for about 18,500t each from the US state of Washington at the end of August, and one shipment for 71,250t from California in mid-September. The cycle oil can be used for blending to lower the sulphur content of the residual fuel. Vortexa data also showed three shipments of low-sulphur fuel oil (LSFO) to Panama from west Africa: a 31,200t cargo from the Ivory Coast in August, a 32,200t cargo from Republic of Congo for the beginning of November and a 63,700t cargo from Angola for mid-November.
Producers of LSFO
West African countries, such as Algeria, Angola, Republic of Congo, Ivory Coast, Cameroon, and Gabon produce low-sulphur fuel. The marine fuel regulation could open west Africa to Panama trans-Atlantic arbitrage for LSFO in 2020. Argus introduced a Panama 0.5pc sulphur fuel oil bunker price assessment in June, published daily in the Argus Marine Fuels report.
In October 0.5pc sulphur fuel oil was assessed at the lowest price in Santos and Rio de Janeiro in Latin America, followed by Buenos Aires, Panama, and Cartagena, on Colombia’s Atlantic coast. Bunker suppliers Petromil and Monjasa began offering 0.5pc sulphur fuel oil in Cartagena in October, but demand has been muted because prices there have been less competitive. Argus introduced a Cartagena 0.5pc sulphur fuel oil bunker price assessment on 2 October, which is published daily in Argus Marine Fuels report.
Latin American Pacific coast lag behind
There are less than two months to the commencement of the global marine fuel regulation, but the national oil companies of Chile, Peru and Ecuador, on the Latin American Pacific coast have not started to supply 0.5pc sulphur fuel oil to local bunker suppliers. IMO 2020-compliant fuel is not expected to be offered in Chile, Peru, and Ecuador until December. Some suppliers are considering importing 0.5pc sulphur product to meet local demand.
Since the Latin American Pacific coast, residual fuel oil has around 1.2-1.8pc sulphur content and the sulphur has to be blended down, availabilities are expected to be spotty and prices less competitive compared with Singapore, the biggest Pacific Ocean bunkering market.
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Source: ArgusMedia
