- Zhoushan’s LSFO premiums hit a seven-month low amid ample post-holiday supply.
- Suppliers push aggressive discounts to clear February stocks, but barge availability remains tight.
- Chinese refiners’ LSFO production dipped in February, tightening supply for March.
- Lower Zhoushan LSFO prices attract demand, challenging Singapore’s bunker market.
Zhoushan’s 0.5% sulfur bunker fuel (LSFO) premiums against Singapore dropped to a seven-month low as suppliers struggled to clear excess February stocks post-Lunar New Year holidays. While demand improved slightly, low inquiries kept pressure on prices, forcing suppliers to offer aggressive discounts, reports SP Global.
Market Trends & Supply Adjustments
LSFO premiums in Zhoushan fell to 92 cents/mt, the lowest since July 2, 2024. Traders offer steep discounts ($565-$585/mt) to push volume, with transactions closing at $565/mt for Feb. 16 delivery.
January LSFO production hit 1.315M mt, within the expected range but 2.45% lower YoY. February LSFO production forecast at 1.15M mt, lower than earlier estimates, due to shorter months and PetroChina’s reduced output. Excess LSFO cargoes are redirected to northern Chinese ports for better margins.
Competitive Shift: Zhoushan vs. Singapore
LSFO spreads between Singapore and Zhoushan widened to $8.50/mt in February, up from $2.80/mt in January.
Some shipowners moved LSFO demand from Singapore & Hong Kong to China for cost benefits. The price gap reached a five-month high of $14/mt on Jan. 24, signaling rising competition.
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Source: SP Global
