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Asia Fuel Oil-380-cst HSFO cash premium at over 1-yr high

Cash premiums for cargoes of Asia’s 380-cst high-sulphur fuel oil (HSFO) climbed to their highest since January 2020 on Monday at $16.25 a tonne to Singapore quotes, lifted by sustained demand and tight high-sulphur fuel supplies.

In the 0.5% very low-sulphur fuel oil (VLSFO) market, cash differentials were also slightly higher as deal values strengthened.

However, sluggish bunkering demand and more adequate low-sulphur fuel supplies are expected to keep a lid on sentiment in the VLSFO market, trade sources said.

This was illustrated by the narrowing structure of the front-month VLSFO time-spread which slipped to $5 a tonne on Monday, down 25 cents from Friday and away from a seven-month high of $5.50 a tonne on Wednesday, Refinitiv data on Eikon showed.

Two VLSFO cargo trades were reported in the window, totalling 80,000 tonnes. One 380-cst HSFO cargo trade was reported, totalling 20,000 ton

Marine fuel sales in the world’s largest bunkering hub of Singapore were at a two-month high of 4.072 million tonnes in August, official data showed on Monday.

The August volumes were down 2% from last year but slightly higher than a 13-month low of 4.064 million tonnes in July, the latest data from the Maritime and Port Authority of Singapore (MPA) showed.

The lower year-on-year bunkering volumes came amid competition from regional bunkering suppliers in China and South Korea, plateauing world trade, bottlenecks at major ports and lower bunker-only port calls amid elevated dry bulk freight rates, trade sources said.

Vessel arrivals at the Singapore hub for bunkers fell to a 14-month low of 3,191 ships, down 6% from last year and 3% lower than July, the MPA data showed.

Vessels, however, loaded an average of 1,276 tonnes each of bunkers in August, the highest since April 2020, Reuters calculations showed, supported by last month’s drop in oil prices.

Overall floating storage inventories for residual fuel in the Malacca Strait climbed to a three-week high in the week ended Sept. 8, as rising stockpiles of IMO-compliant VLSFO offset a drop in stocks of HSFO and other uncategorized grades, according to data intelligence firm Kpler.

Total floating storage inventories rose by 72,000 tonnes, or 3%, from the previous week, to 3.01 million tonnes.

This came as floating inventories of VLSFO rose 8%, or 174,000 tonnes, in the week to Sept. 8 to 2.27 million tonnes.

HSFO floating stocks were down 28%, or 78,000 tonnes, compared with the previous week at 205,000 tonnes, while stocks of residual fuels with unspecified sulphur contents fell 4%, or 24,000 tonnes, to 540,000 tonnes. China’s Sinopec Corp announced it had completed its first liquefied natural gas (LNG) bunkering operation in Weihai, a major seaport in the eastern Shandong province.

The bunkering, or marine refuelling, operation transferred 250 tonnes of LNG by truck to a China Merchant Shipping vessel.
Source: Reuters

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