- Asian refiners keen to discuss with regard to the official prices from the Middle East for October crude loadings in the trading week starting Aug.11.
- The discussion focuses on the assessment of the competitiveness of using feedstock crude against straight-run fuel oil.
- Incurring changes in the feedstock slate will impact the low sulfur fuel oil production rates, as per the sources at refineries.
A recent news published in Platts written by Rohan Menon, Su Ling Teo and Amy Tan reveals about the Asia residue fuel market and the key market indicators that take place during this week.
Marine Fuel 0.5% Sulfur
Singapore Marine Fuel 0.5% stable
Discussions for the Singapore Marine Fuel 0.5% September/October timespread opened Aug. 11 with offers at minus 50 cents/mt against no bids, largely stable from Aug. 7.
Inquiries for low sulfur bunker increased
Inquiries for low sulfur bunker fuel increased slightly in the week ending Aug. 7.
With demand supported by buyers that had not procured term volumes for the third quarter as they anticipated further market volatility and were now in the market to replenish inventories.
Singapore-delivered Marine Fuel 0.5%S
The Singapore-delivered Marine Fuel 0.5%S bunker premium to Singapore Marine Fuel 0.5% cargo rose to $19.37/mt Aug. 7 from $10.95/mt July 30.
Demand diverted
Demand for marine fuels has been diverted from Hong Kong to the rest of North Asia due to a new 14-day quarantine requirement.
South Korea
In South Korea, lower output of low sulfur marine fuel has provided a floor for prices.
The Busan/Ulsan delivered marine fuel 0.5%S differential to the FOB Singapore 10 ppm gasoil cargo averaged minus $5.30/mt over Aug. 3-7, down from minus $9.73/mt over July 27-30, S&P Global Platts data showed.
High Sulfur Fuel Oil
Downstream bunker market
In the downstream bunker market, supply remains tight.
This scenario prevails because some buyers still supplement their term volumes with spot as more vessels complete scrubber installations.
Moreover, traders expect supply to remain tight in the near term.
Singapore-delivered 380 CST bunker premium
The Singapore-delivered 380 CST bunker premium to Singapore 380 CST HSFO cargo assessments fell to $16.88/mt Aug. 7 from $20.09/mt July 30.
Hong Kong market
Supply tightness is also prevailing in the Hong Kong high sulfur bunker fuel market.
The traders foresee this to continue as majors hold back on bringing in cargo due to a new 14-day quarantine rule.
This scenario prevails, even as demand remains robust from ships that have completed scrubber installations.
Measure to curb the spread of Covid 19
A 14-day quarantine rule has been imposed by Hong Kong for cargo ships calling at its port for purposes other than loading or discharging cargoes from July 29.
This rule has been imposed as part of measures to curb a resurgent spread of coronavirus.
Did you subscribe to our daily newsletter?
It’s Free! Click here to Subscribe!
Source: Platts
