ENGINE: East of Suez Bunker Fuel Availability Outlook
Longer lead times for VLSFO are recommended in Singapore this week, and a severe tropical storm could disrupt Zhoushan’s bunker supply.
Singapore’s residual fuel oil stocks have edged up last week despite a drop in net imports, Enterprise Singapore data showed.
But since peaking at over 25 million bbls in May, Singapore’s fuel oil inventories have been drawn down. The port’s stocks have averaged 22.95 million bbls so far in July – their lowest monthly average since March.
Bunker fuel oils remain tight for prompt delivery dates in Singapore, with lead times for VLSFO stems up from seven days last week to nine days now. Similarly, LSMGO supply has tightened slightly, requiring 5-6 days ahead this week. HSFO380 stems still need 10 days of lead time.
Last week’s Singapore’s VLSFO premium over Zhoushan has now flipped to a $1-2/mt discount. The two ports have been pricing the grade at competitive levels to one another in recent days.
Zhoushan continues to be well supplied with all three fuel grades. Supply has improved in northern Chinese ports after supply shortages in recent weeks.
Zhoushan could be struck by tropical cyclone In-Fa later this week, which has now been upgraded to a “severe tropical storm”. Bunker supply and operations are expected to be disrupted, unless In-Fa changes track. The cyclone is expected to hit Taiwan’s east coast on Thursday and Friday.
At the same time, bunker loading schedules in Hong Kong were disrupted by a different tropical cyclone that made landfall in the city state on Tuesday.
Hong Kong’s state weather forecaster Hong Kong Observatory issued a Signal 1 warning on Sunday night as tropical storm Cempaka moved in on the city. The storm warning was then upgraded to a Signal 3 warning on Tuesday, and bunker fuel loadings from Hong Kong’s oil terminals were suspended as the storm pummelled the port with wind gusts of up to 70 km/h and rainfall of more than 70 mm.
Loadings resumed later on Tuesday and all warnings were cancelled as the storm pushed away from Hong Kong.
Bunker demand has increased in Hong Kong after bunker-only calls became possible again in the port last month, when local authorities lifted quarantine restrictions for ship crew that have been in place for the past 11 months.
Lead times are steady at 3-4 days in southern South Korean ports for VLSFO stems on the week, down by one day since last month.
Fujairah’s lead times are also steady this week, with low sulphur fuel stems requiring 3-4 days ahead. Longer lead times may be required for HSFO380 stems in the port to ensure enough availability of the product.
Source: ENGINE (https://engine.online/)