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Argus breaks record for reported bunker deals in Singapore market

13 Mar 2019

Global energy and commodity price reporting agency Argus Media on Wednesday (13 March) provided an industry update regarding a milestone reached for reported bunker deals in Singapore:

Tuesday 12th March saw 45 deals reported into the Argus Delivered Bunkers (ADB) assessment process for Singapore (36 for HSFO, 8 for MGO 0.1%, 1 for LSFO 0.1%). This surpassed the previous record of 39 deals set on 9th November.

HSFO 380cst was assessed at $434.49/mt, MGO 0.1% at $612.57/mt and IMO2020 compliant LSFO 0.5% at $572.50. The later was assessed by considering the LSFO 0.1% deal price and a market survey which indicates offers at a $40 discount to MGO. Argus is the only price reporting agency publishing prices for LSFO 0.5% delivered bunker fuel that can be used for signing contracts that extend into 2020.

Buyers of delivered LSFO 0.5% must currently pay a $96 premium over the 0.5% marine fuel cargo price, which Argus assessed at $476/mt that day. Such a bunker premium may sound high, but that is the current offer price on a spot basis due to a lack of barges carrying the grade. This spread is likely to reduce in 2020 as demand and supply increase.

With premiums/discounts to traditional benchmarks likely to vary considerably as the market adjusts to IMO2020 compliant fuels, Argus offers a refreshing and accurate alternative. Signing term contracts referencing ADB ensures that buyers and sellers know with certainty that the contract will settle on the fair price for that fuel on a delivered to ship basis.

Argus assesses delivered bunker fuel prices in Singapore based on a Volume Weighted Average (VWA) of physical spot deals reported by 7pm, excluding price outliers and deals that fall outside the range of 4-12 days and 500-3,000t for Fuel Oil and 50-500t for MGO. No other price reporting agency assesses the market in this way or with such high quality underlying deal data.

Published: 13 March, 2019

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