- Weak Demand, Ample Supply Drive Down Bunker Spread.
- Zhoushan’s Competitive Pricing Pressures Singapore LSFO Market.
- Singapore’s LSFO Bunker Premium Falls to Multi-Year Lows.
The Singapore-Fujairah LSFO bunker spread lost ground to its weakest level in more than seven months, hitting parity on Feb. 21. This was due to a softer-than-anticipated recovery in demand after the Lunar New Year holidays, surplus supply, and increased competition for suppliers, traders said, reports S&P Global.
Market Assessment and Price Movements
Platts, a unit of S&P Global Commodity Insights, measured the Singapore-delivered marine fuel 0.5%S bunker price against the delivered grade in Fujairah, with a $2/mt tightening from the prior session. The spread was weaker last on July 17, 2024, at minus $4/mt. Competitive pricing in Zhoushan, North Asia’s bunker hub, has driven LSFO bunker prices lower than those in Singapore, traders noted.
Platts also measured:
- Singapore-exported marine fuel 0.5%S bunker premium to the FOB Singapore marine fuel 0.5%S cargo decreased to $8.30/mt on Feb. 21, down 49 cents/mt day on day.
- The cash differential of FOB Singapore marine fuel 0.5%S cargo to the Mean of Platts Singapore marine fuel 0.5%S strip decreased 58 cents/mt to $3.75/mt on Feb. 21.
Challenges for Suppliers Amid Low Bunker Premiums
“Bunker premiums are not in a healthy range, and suppliers are suffering because most of the LSFO barging costs range from $6/mt to $7/mt,” a Singapore-based trader said on Feb. 24.
The price spread between Singapore delivered marine fuel 0.5%S and the corresponding spot ex-wharf assessment narrowed to $4/mt over Feb. 3-21 from $7.25/mt in January.
“Depending on the supplier, some are now charging barging [fees] to cover the flat price,” a second Singapore-based trader said, adding that some suppliers were focusing on smaller requirements rather than pursuing larger, competitively-priced inquiries.
Fujairah Market Dynamics and Supply Factors
Fujairah’s LSFO demand remained moderate to below average, preventing delivered valuations from rising significantly. LSFO premiums have stayed at single-digit levels since early 2025. Abundant LSFO supply in January and February has pressured Fujairah’s bunker premiums, with fresh replenishment flows arriving from neighbouring Kuwait in early February.
“LSFO barge [schedules are] mostly seeing three to five days out,” a Fujairah-based trader said, noting ample overall barge availability for prompt refuelling dates.
New LSFO Cargo Arriving from Nigeria
A VLCC-sized cargo with straight-run LSFO and feedstock components of Nigeria’s Dangote refinery is due to arrive in Fujairah in the week commencing Feb. 24. This is the first such replenishment since July 2024, industry sources said.
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Source: S&P Global
