AMERICAS BUNKERS: Key market indicators this week

Key marine fuel markets in the Americas enter this week riding a bullish wave but will have an eye on production dynamics and supply fundamentals.

LATIN AMERICA

Most of Latin America bunker markets, including Santos and El Callao, start the week strengthened after several days of price increases, catching up with the advance seen in energy markers.

In the marine fuel 0.5%S segment, Santos experienced last week a steep rise of 5.57%, or $18 mt, to end at $341/mt on Oct. 9. The performance mirrored the upward trend shown by the 0.5%S wholesale market on the US Gulf Coast, which climbed 5.84%.

Marine gasoil pricing in Santos, however, moved sideways and ended the week unchanged at $422/mt.

Brazil has continued to set records for ultra-low sulfur diesel production and in September state-led Petrobras registered and output of 1.89 million cubic meters, above 1.81 million cu m in August, as local demand grew, according to government data. The company plans to update several refineries to increase output both of diesel and bunker fuel, which it mainly exports to Asia.

Panama, which imports most of its 0.5%S from Houston, also saw prices rise as Hurricane Delta swept through the Gulf Coast. The fuel, also called very low sulfur fuel oil, climbed $10/mt (3.13%) through last week in Balboa to $330/mt. Marine gasoil in the same port rose $1/mt (0.26%) to $384/mt and high sulfur bunker fuel streaked $4/mt up ($1.35%) to $300/mt.

“Demand has been average to a bit plus,” a bunker source said about Panama’s market performance. “Prices have been stable on the rise side.”

Several factors are factored in the behavior, the source added, from ICE Brent’s 3.78% increase during the week to higher costs for resupply as well as Hurricane Delta, which hit the US Gulf Coast by the end of last week. Around 72% of Panama’s bunker sales correspond to VLSFO, while MGO represents 12% and HS IFO 380 amounts to 16%.

In Buenos Aires, 0.5% firmed $16/mt (4.52%) to end the week at $370/mt.

“There was a lot of movement during the week, mainly in the last few days. It started at a lower pace but it improved,” a market participant said, adding that September performance was also better than expected for this time of the year.

However, marine gasoil fell $6/mt (1.25%) to $475/mt. Value indications for MGO in the Argentinian port have varied widely since September as some players have lowered prices to unload supplies of this fuel, which traditionally faces very low demand, almost occasional demand, according to market participants.

El Callao was also on the rise. VLSFO in the Peruvian port hiked $18/mt (5.04%) to $375/mt and MGO climbed $22/mt (4.72%) to $488/mt.

“It’s coming back to normalcy little by little,” a market participant said. “At last.”

On the other side of the coin, however, Valparaiso and Cartagena have lost ground.

VLSFO in the Chilean port declined $3/mt (0.80%) to $371/mt and marine gasoil fell $5 (0.91%) to $542/mt, continuing a downward trend started in mid-September which has seen it abandon some of the highest levels in the region to come closer to its neighbor’s values.

In Cartagena, 0.5%S retreated $5/mt (1.49%) to $330/mt last week, while marine gasoil declined $14 ($3.12%) to $435/mt.

“Demand has been increasing a little bit these days, above all of great volumes,” a market participant said.

However, another participant pointed out: “In general, demand has been of around 3,000 mt, which is a little bit lower than in previous weeks.” According to the source, a lower bunker demand is expected during this time of the year in Colombia.

NORTH AMERICA

North American ports saw mixed price movements for spot bunkers throughout the week of Oct. 5-9 but ended the period on a bullish note amid talk of tight spot availability and storm-related congestion. Market players enter this week with an eye on US Gulf Production slated to come back online and demand fundamentals, which have shown mixed direction in recent weeks.

In Houston, the spot price of retail 0.5%S marine fuel rose $19/mt from Oct. 5-9 to close the week at $309/mt ex-wharf, gaining 6.6% during that time. MGO spot value in Houston climbed $16/mt during that time to close at $364/mt ex-wharf for a gain of 4.6%.

Overall, the US Gulf Coast took direction from a stronger US crude complex, which was propped up by temporary regional production shutdowns related to Hurricane Delta ahead of its Oct. 9 landfall.

In Vancouver, ex-wharf spot 0.5%S pricing climbed from $303/mt to $315/mt for a gain of 4% from Oct. 5-9 while MGO value rose 5.7% from $370/mt to $391/mt over the same period. Availability of both products was talked tight for the near term to close the week. Additional support for higher Pacific Northwest values came from stronger Asian segments to close last week.
Source: Platts