Ship fuel sales in September at the Port of Fujairah fell 9.5% on the month as buyers put off purchases because of high crude oil prices, says an article published in S&p Global.
Consensus declined
The total sales volume at the world’s third-biggest bunkering hub was 640,321 cu m, the lowest since March and down from this year’s high of 707,563 cu m in August, according to Fujairah Oil Industry Zone data published on its website Oct. 21. The consensus was for a 5% to 11% decline on the month, according to an informal survey of traders by S&P Global Platts.
Bunker demand taped
Buyers held off purchases as long as possible in September because the rally in crude oil drove up costs, traders said. Platts data showed that the benchmark FOB Singapore Marine Fuel 0.5%S cargo assessments averaged $541.54/mt in September, up to $31.14/mt from the August average. The average so far in October was $586.79/mt through Oct. 20.
“Based on vessel schedules, bunker demand from both the container vessels and tanker segments was somewhat tepid,” a Fujairah-based bunker supplier said. All categories showed declines for the month, with the low sulfur fuel oil total down 10.1% and the high sulfur fuel oil off by 8.2% in September.
Delivery capacity remained ample
Demand for HSFO bunkers was actually steady in September, but strong buying from the utility sector around the Middle East region because of hot weather that boosted air conditioning demand limited availability of the grade, which capped HSFO bunker sales at Fujairah, sources said. Market sources also said the delivery capacity of HSFO bunkers “remained very ample” with five dedicated suppliers in Fujairah. International Supply recently converted its bunker barges to supply HSFO, sources said. International Supply did not respond to a request for comment.
A three-day disruption to bunker sales in early October due to Cyclone Shaheen has resolved itself, and traders said bunker demand so far this month has firmed up.
Higher than before
“The market is more receptive of the fact that bunker fuel would be traded around these higher levels than before, while crude markers are more likely to firm up. So, it would be cheaper to purchase earlier than later,” a bunker supplier said.
Premiums of Fujairah-delivered marine fuel 0.5%S bunker against FOB Singapore Marine Fuel 0.5%S cargo assessments averaged $2.10/mt in September, down 40 cents/mt from August’s average, Platts data showed. So far in October, the premium has jumped to an average of $6.71/mt through Oct. 20, the data showed.
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Source: S&pGlobal
