ENGINE: Europe & Africa Bunker Fuel Availability Outlook
HSFO availability is said to be normal in Rotterdam and the rest of the ARA, a source says. Availability of the high-sulphur grade has improved now, but securing stems on very prompt dates (0-2 days) can still be difficult, a trader says. Lead times of 5-7 days are recommended for grade to ensure full coverage from suppliers, a source says.
VLSFO has been in ample supply in the ARA hub, two sources say. Unlike HSFO, the low-sulphur grade is much easier to secure for prompt delivery dates.
Rotterdam’s Hi5 spread was pegged around $27/mt on Wednesday, which was only a third of where it was in June last year. It has been lingering below $50/mt for the past three months.
Some argue that production cuts from Saudi Arabia have reduced access to sour crude and supported HSFO prices in the ARA. This could contribute to keep the Hi5 spread from moving above $50/mt for the rest of the year, a trader says.
Lead times of 4-6 days are recommended for VLSFO, and 1-3 days for LSMGO in Rotterdam and in the wider ARA hub.
Availability of HSFO has shown signs of improvement in several northwest European ports, a source says. At least three suppliers in the German port of Hamburg have sufficient HSFO stocks available, the source adds. VLSFO and LSMGO supply is also good, with lead times of up to five days recommended in Hamburg.
VLSFO and LSMGO availability remains normal for delivery off Skaw. Recommended lead times for both grades are around 7-10 days.
HSFO availability has been tight in Gibraltar since the start of the month. Two in three suppliers are almost out of stock, and expect replenishment cargoes to arrive by 6 October, a source says. One supplier has limited HSFO stocks available and can only deliver stems on a case-to-case basis. These are usually priced higher. The supplier expects to receive a replenishment cargo by 15 October.
Lead times of 7-12 days are recommended for HSFO in Gibraltar, up from 4-6 days last week. The port’s Hi5 spread momentarily slipped into rare negative territory on Tuesday, before flipping back to positive on Wednesday.
The narrowing of Gibraltar’s Hi5 spread has diminished fuel cost savings against VLSFO for scrubber-fitted vessels. It could potentially dent HSFO sales in the port.
In nearby Las Palmas, the Hi5 spread has shrunk to just $8/mt. Its HSFO price was trading at near parity levels to Gibraltar on Wednesday, erasing its $36/mt premium over Gibraltar’s HSFO in the past week.
Limited HSFO supply in the region has narrowed Hi5 spreads across several Mediterranean ports.
Prompt VLSFO and LSMGO availability is tight in Ceuta. One in two suppliers is fully committed for the remaining days left in this month, and the other supplier has its earliest delivery dates from 5 October. Meanwhile, availability of both grades is relatively better in Gibraltar and Algeciras. Lead times of 5-7 days are recommended there.
VLSFO and LSMGO availability is normal In the Portuguese ports of Lisbon and Sines, a source says. LSMGO availability is also good in the Spanish port of Tarragona, where one supplier can deliver the grade by trucks from 4 October.
Other bunker delivery locations in the Mediterranean such as off Malta, Piraeus and Istanbul have normal availability of VLSFO and LSMGO, sources say, while HSFO is tighter.
South African authorities have detained all bunker barges in Algoa Bay, two port agents have told ENGINE. This comes after the South African Revenue Service (SARS) detained five bunker barges over import duty disputes earlier this month. Since then, only one supplier has been able to operate its barges.
All operations have now been cancelled and all barges detained in the bay.
Offshore bunkering has completely stopped, one of the agents said. It seems that some backchannel talks are being held to resolve the crisis, but so far, no official confirmation has been made, the port agent added.
SARS has been conducting investigations into bunker compliance, and the bunker vessel detentions are part of an investigation, it said in a statement released last week. The South African authority has called the detentions “lawful” as the investigation is still ongoing.
Source: ENGINE, By Nithin Chandran, https://engine.online/news