Singapore Bunker Sales Dip Below 50mn t in 2018

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  • Bunker sales fell $379/mt in December when compared with $462/mt in November.
  • The reason for fall has been attributed to fuel oil contamination issue and the continuing US-China trade war.
  • Weak demand in November from refiners to use fuel oil has left the market with a grade mismatch and has created a shortage of 380cst high-sulphur fuel oil (HSFO) bunker fuel supplies.
  • Sales of 0.1pc low-sulphur marine gas oil (LSMGO) in December reached an all-time record of 191,000t, up by over 50,000t from November.

According to Maritime and Port Authority of Singapore, Singapore saw marine fuel sales of 4.31mn t, closing last year’s total to 49.8mn t compared with 50.64mn t in 2017 as fewer vessels called at the port to refuel.

Fall in bunker sales

For the first time in four years, the bunker sales fell when compared to the previous year following a fuel oil contamination issue and the continuing US-China trade war.

Data released by Maritime and Port Authority of Singapore showed Singapore’s bunker fuel sales in December 2018 rose 0.3% year on year to 4.31 million mt. December sales were also higher from November 2018 by 10.3%, while December vessel arrivals in Singapore for bunkering edged up 6.5% from November at 3,465. Vessel arrivals in December were also up year on year by 2.8%.

A market source quoted that lower prices helped to boost buying interest month on month and Bunker premiums came off quite a bit in December with more owners coming back.

Singapore delivered 380 CST bunker fuel premium averaged $14/mt over the Mean of Platts Singapore 380 CST high sulfur fuel oil assessments in December, compared with $22/mt over MOPS 380 CST HSFO in November. On a flat price basis, delivered 380 CST bunker fuel prices averaged $379/mt in December, compared with $462/mt in November.

Reason for fall

According to provisional data from Singapore’s Maritime and Port Authority showed, consumption for the 2018 first half posted a 428,000t increase compared with the same period in 2017, although this was more than offset by a 1.266mn t fall during the second half of the year. Some suppliers in Singapore during the third quarter offered off-specification bunkers as a result of contaminated fuel oil cargoes originating from the US Gulf coast.

Weak demand and a shortage of bunker fuel

Weak demand in November from refiners to use fuel oil as a feedstock, combined with shutdowns of secondary units, sent more low-density and low-viscosity fuel oil, along with straight-run fuel oil, to the regional trading hub of Singapore. This left the market with a grade mismatch and created a shortage of 380cst high-sulphur fuel oil (HSFO) bunker fuel supplies. Delivered cash premiums for 380cst bunker to Singapore 380cst cargo assessments shot up to record levels of $25-35/t from more normal levels of $12-16/t, prompting shipowners to bunker in other ports such as Hong Kong and Fujairah where prices were often more competitive.

Sale of LSMGO on the rise

Sales of 0.1pc low-sulphur marine gas oil (LSMGO) in December reached an all-time record of 191,000t, up by over 50,000t from November. LSMGO sales are expected to see further growth over the coming months with China’s 1 January 2019 introduction of a 0.5pc marine fuel sulphur cap now covering the country’s entire coastline. It recorded an average of 8.22 LSMGO deals each day in January, nearly double as many compared with December. Singapore’s delivered 380cst HSFO prices averaged $379/t in December compared with $463/t in November.

According to the MPA data, Low sulphur marine gas oil posted a record high monthly volume of 190,800 mt for 2018, surging 35.8% month on month and 61.6% year on year. Total bunker sales in December comprised 3.07 million mt of 380 CST high sulfur fuel oil, 27,600 mt of 180 CST HSFO, 845,400 mt of 500 CST HSFO, 190,800 mt of low sulfur marine gas oil, 87,300 mt of marine gas oil, 27,100 mt of 180 CST low sulfur fuel oil, 6,500 mt of 380 CST LSFO. There were no sales of 500 CST LSFO and marine diesel in December, while sales of bunker fuel classified as others totaled 50,600 mt.

Conclusion

An estimated 3,465 vessels called at Singapore to refuel in December, up by 210 from the previous month. Total vessel visits for bunkering purposes reached 39,471 in 2018, down by 1,265 from 2017. On an annual basis, total bunker sales volumes in Singapore dipped 1.6% year on year to 49.8 million mt in 2018, ending a streak of rising sales for three straight years until 2017.

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Source: SPGlobal & Argus Media

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