- Ships with scrubbers calling at Singapore port for bunkers
- Favorable HSFO pricing in Singapore attracts shipowners
- Crew changes, other factors also boost SG’s bunker prospects
- MPA’s Prompt action in Him Leong’s collapse boosted confidence of the industry.
According to a Platts report, Singapore will likely continue to see strong HSFO sales in the coming months, as an increasing number of ships installed with scrubbers make bunker calls at the city-port, where ready HSFO availability that is also competitively priced, is providing a boost to its uptake, industry sources said.
1 Million Mt HSFO Sales
Total HSFO sales volumes in Singapore, the world’s largest bunkering port, surpassed 1 million mt in October, rising about 16% month on month, latest data from the Maritime and Port Authority of Singapore showed.
HSFO sales including MFO 500 CST in August were also strong, over 1 million mt but lower than the volumes seen in October, MPA data showed.
Some Singapore bunker suppliers have estimated that November HSFO could match October’s 1 million mt or so, citing daily inquiries from new scrubber-fitted vessels calling at the city-state.
“However, there’s quite a bit of tightness for on-spec product in the market at the moment,” an industry source said.
Scrubber Fitted Ships Driving This
The robust HSFO sales in Singapore come despite the thrust cleaner fuels have received in Singapore, in part due to the implementation of the International Maritime Organization’s global sulfur limit rule for marine fuels, starting Jan. 1, 2020.
“HSFO sales in Singapore have been strong recently and are expected to remain that way,” a bunker supplier said.
“A lot of ships that were installing scrubbers were stuck at yards because of delays caused by COVID-19. But some of those retrofits have been completed now. So, demand has appeared but with a delay,” he said.
Competitively Priced HSFO
HSFO is also more competitively priced in Singapore compared to some other ports in Asia, making it more attractive for ships using HSFO to bunker in the city-port, industry sources said.
In October, the delivered IFO 380 CST price in Singapore averaged $270.91/mt, S&P Global Platts data showed. This compares to an average of about $301/mt in Shanghai and of $293.24/mt in Busan in October, according to Platts data.
Increase in Stem Sizes
In addition, stem sizes have also increased, contributing to increased HSFO sales, an industry source said, adding that many shipowners had already fixed their HSFO contracts for 2021, reflecting continued strength in demand.
Singapore Favourable To Many
While favorable pricing is among the quintessential elements to determine ports for bunkering, that’s not the only aspect that makes Singapore attractive to shipowners and operators as a lot of them are also consolidating other activities while bunkering at Singapore, they said. Among these, crew change forms an important aspect.
“Some ports such as Hong Kong restricted crew changes and Singapore benefited from that. None of the ports in Asia is doing as many crew changes as Singapore is,” another industry source said.
The Port of Singapore has facilitated more than 50,000 crew changes since March 27, MPA Chief Executive Quay Ley Hoon said at an event Nov. 3.
This has aided international trade and, in part, boosted bunker prospects amid the restrictions posed by the global coronavirus pandemic, sources said.
Other factors
Meanwhile, other factors have also boosted bunkering of HSFO as well as other marine fuel grades in Singapore, sources said.
“Singapore has three things going for it: excellent bunkering infrastructure, tank storage and blending expertise; given that most ports have wound down some of their high sulfur bunkering activities, or are inadequately equipped, and shipowners with scrubber-fitted vessels are far more comfortable bunkering here,” another bunker supplier said.
The recent launch of two new bunkering standards — Singapore Standard 660:2020 and Technical Reference 80:2020 — has increased transparency and quality assurance in the maritime industry, which is already reaping the benefits of productivity enhancements and cost savings after the implementation of TR 48.
The purpose of TR 48 was to document principles, requirements and procedures in the application of mass flow metering to bunker in Singapore.
Confidence in MPA’s Prompt Actions
MPA’s concerted efforts to evoke licenses of errant bunker players has also provided a level playing field for bunker suppliers and enhanced the integrity of the system, another bunker supplier said.
There is also more confidence in the industry after the way the Hin Leong collapse was dealt with, he said.
Hin Leong’s subsidiary — Ocean Bunkering Services, or OBS — was Singapore’s third-biggest accredited bunker supplier by volume in 2019, and the biggest in 2018, according to MPA data.
Thanks to MPA’s timely decision to grant bunker supplier licenses to Minerva Bunkering and TFG Marine, fears over bunker fuel delivery and barge tightness created by the Hin Leong debacle have been quelled, sources said.
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Source: Platts
