ENGINE: East of Suez Bunker Fuel Availability Outlook
Singapore’s bunker market remains tight amid persistent barge loading delays, while prompt availability has improved in Fujairah this week.
Bunker fuel availability remains tight in Singapore amid lingering terminal congestion and delayed barge loadings. Recommended lead times for VLSFO and LSMGO are 9-11 days and 7-9 days out, respectively. HSFO380 lead times are also steady on the week at 10-12 days.
Singapore’s fuel oil inventories have been drawn to their lowest levels since late September amid a sharp decrease in net imports, according to the latest Enterprise Singapore data.
Large fuel oil cargoes were shipped from Singapore to China in the week, and volumes also went to South Korea, Japan, Bangladesh and Malaysia, according to cargo tracking. Singapore mostly imported fuel oil from Brazil and Fujairah, while also from Malaysia, Thailand, Taiwan, South Korea and Russia.
At the same time, Fujairah’s prompt bunker availability has improved slightly on the week. The port’s earliest delivery dates for all fuel grades have been brought forward to about five days out, down from eight days last week, when a supplier run out of product.
Fujairah’s fuel oil and heavy distillate inventories grew by 30% in the week to 29 November, when they measured 11.91 million bbls, the latest data from the Fujairah Oil Industry Zone (FOIZ) and S&P Global Platts shows.
Bunker operations have been running smoothly in Zhoushan since weather suspensions at the Xiu Shandong anchorage at the start of last week. Incoming fuel oil cargoes have replenished suppliers’ stocks. Recommended lead times of 2-3 days for VLSFO and LSMGO in Zhoushan are much shorter compared to Singapore.
Zhoushan’s HSFO380 inventories could also be bolstered by a cargo that is set to arrive on 9 December, according to cargo tracking.
Meanwhile, the government of China recently granted “Shanghai and Guangzhou the right of bonded bunkering permission for ships on international voyages” in a bid to make prices more competitive and “attract international sailing ships.”
Bonded bunkering is a value added tax (VAT) rebate.
In February 2020, China wavered its 13% VAT on fuel oil for bunker sales to internationally trading Chinese and foreign ships in several coastal ports, including the burgeoning bunker hub of Zhoushan. The country sought to make prices more competitive with Singapore and other major ports to attract demand.
Source: ENGINE (https://engine.online/)