- Singapore is hoping to push its bunker fuel sales even further in 2019 and is all set to tighten norms ahead of IMO 2020.
- Demand for 0.5% sulfur bunker fuel oil and LSFO is likely to continue in future as the IMO 2020 rule approaches.
- Port of Singapore proactively gearing up for future needs of the bunker industry and became the first country worldwide to introduce a Mass Flow Meter mandate.
Singapore is hoping to push its bunker fuel sales even further in 2019 after posting near 50 million mt in annual sales for two consecutive years. It is taking steps to tighten its quality norms and strengthen port infrastructure ahead of the International Maritime Organization’s global sulfur limit rule deadline in 2020.
Singapore keen to retain top spot
On January 21, a statement released by Maritime and Port Authority of Singapore stated that Singapore has retained its position as the world’s top bunkering port in 2018, with annual bunker sales volume close to the 50 million-ton mark for the second year consecutively.
Though its 2018 bunker fuel sales volumes declined 1.6% year on year to 49.8 million mt, industry sources expect marine fuel consumption in the world’s top bunkering port by volumes to rebound because of anticipated growth in demand for cleaner fuels.
The industry sources told S&P Global Platts this week that the jump in demand for 0.5% sulfur bunker fuel oil is likely to continue in future as the IMO 2020 rule looms. Sales of low sulfur fuel oil 180 CST in the city-port increased more than five-fold to hit 256,600 mt in 2018 according to a data released by the MPA.
Demand on an all-time high
As they move into 2019, bunker suppliers and traders expect Singapore’s total marine fuel oil demand to touch at least 4 million mt on an average per month.
A bunker supplier voice that the Singapore port is still likely to see pretty stable monthly demand, though there might be some gradual shifts in volumes from high sulfur bunker fuel to LSMGO.
Fuel quality issues doused
As 2018 saw a spate of bunker fuel quality issues worldwide that emanated from Houston and subsequently impacted ports globally, including Singapore.
Up to 50 vessels in Singapore were heard to have received off-specification bunker fuel around June-August, some sources said, temporarily dampening buying sentiment. Some customers opted to bunker at ports in South Korea and Japan in August, even though fuel prices were higher at those ports.
More recently, in January 2019, Fuel Oil Bunkering Analysis and Advisory Service, under Lloyd’s Register, issued an alert for off-spec sediment fuels residual bunker fuel samples it had tested from Singapore.
According to Platts data, 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. So far in January, this figure averaged $15/mt over MOPS.
Increase in demand for LSFO
An industry consultant iterated that Singapore has been quite agile in preparing for the IMO 2020 rule. Trade sources expect demand for LSFO to increase further this year as IMO’s 2020 deadline approaches.
The shipowners who are not keen on installing scrubbers will end up using only LSFO. Other initiatives aimed to boost LNG bunkering as well as the MPA’s plan to produce a list of suppliers that are able to supply compliant fuel by the middle of 2019 are also positive.
Moving towards technology
The Port of Singapore has been proactively gearing up for future needs of the bunker industry.
On January 1, 2017, Singapore became the first country worldwide to introduce a mass flow meter mandate for fuel oil deliveries. MFMs measure the flow rate in the pipe, gauging the quantity as well as the mass and density of the fuel, and significantly reducing the risk of vessels receiving contaminated fuel.
The MPA is now scheduled to mandate the use of MFMs for delivery of distillates at the Port of Singapore from July 1, 2019. The vessels coming to Singapore for bunker appreciate the operational trust and efficiencies MFMs bring to the bunker delivery process.
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Source: SPGlobal
