According to an article published in Platts, with supply cuts across the Asian low sulfur market and stable bunker demand in Singapore, margins have improved slightly from July, although market participants indicated August 24 that recovery is far from assured.
High arbitrage volumes
Traders pointed to higher incoming arbitrage volumes into Singapore in September compared with August as capping a potential upside to the market.
Marine fuel 0.5% sulfur
- Morning discussions on the Singapore Marine Fuel 0.5%S September-October time spread opened Aug. 24 at minus $2.75/mt, stable from the August 21 assessment, brokers’ indications showed.
- Demand for low sulfur bunker fuel increased on the week in the week ended August 22. Market participants, however, deemed it too early to anticipate a recovery in demand in August, with the number of inquiries fluctuating day on day.
- Meanwhile, barge availability is expected to tighten toward the end of August as buyers had previously locked in volumes for those dates at the start of the month.
- Consequently, some suppliers said the earliest their barges would be available is for early-September deliveries.
Singapore-delivered Marine Fuel 0.5%S
- The Singapore-delivered Marine Fuel 0.5%S bunker premium to Singapore Marine Fuel 0.5%S cargo increased to $15.66/mt on Aug. 21 from $13.21/mt on Aug. 14.
- Meanwhile in north Asia, tightness in the low sulfur marine fuel market in South Korea has driven up August premiums and is expected to remain high for the rest of August as cargoes for August deliveries dry up, according to bunker suppliers there.
- The Busan/Ulsan delivered marine fuel 0.5%S differential against Singapore 10 ppm gasoil cargo assessments was up 71 cents/mt week on week at $12.17/mt on Aug. 21, S&P Global Platts data showed.
High Sulfur Fuel Oil
- According to market brokers, midmorning discussions for the Singapore 380 CST high sulfur fuel oil September-October time spread were narrower at $2/mt, compared with the August 21 assessment of $2.75/mt.
- With supply tight, the Singapore HSFO market is still getting support for the 180 CST and 380 CST grades, market traders said, with HSFO inflow into Singapore expected to remain low in spite of a gradually widening spread between the Singapore and FOB Rotterdam Barge markets.
- As the Asian HSFO market has recovered, the spread between Singapore 380 CST and FOB Rotterdam 3.5%S Barge widened to $15.10/mt at the Asian close on August 19, the widest since June 15, when it was $15.25/mt, Platts data showed.
- The HSFO market is still seeing demand from South Asia for power generation, market sources said. Bangladesh is currently seeking a fresh September-delivery cargo while Pakistan State Oil issued tenders to buy 70,000 mt of HSFO for September and October, each.
- Demand for high sulfur bunker fuel was largely stable in the week ended August 22. Market participants said they expect demand for the grade to retain a strong foothold in Singapore’s overall bunker fuel mix as ships complete scrubber installations.
- The Singapore-delivered 380 CST bunker premium to Singapore 380 CST HSFO cargo assessments decreased to $14.97/mt on August 21 from $17.60/mt on Aug. 14.
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Source: Platts
