Global energy and commodity price reporting agency Argus Media on Wednesday (11 November) published an article summarising the reasons behind the fall in bunker fuel sales in October at Zhoushan port, including higher prices and a fall in domestic production:
Bonded bunker sales in east China’s Zhoushan fall by 6.5pc to 420,100t in October from 449,300t in September, according to the port’s bunker suppliers, as higher prices in October undermined demand.
The October average of very-low sulphur fuel oil (VLSFO) in the Argus Zhoushan Bunker Index (ZBI), which is a delivered-to-ship bunker index, rose by $13/t from September to $333/t.
ZBI’s high-sulphur fuel oil (HSFO) assessment also rose to $302/t from $283.50/t over the same period, reacting to Asia and China’s overall tight supplies. Marine gasoil was up slightly to $382/t from $379.50/t.
ZBI’s VLSFO and HSFO assessments’ premium to the Singapore Argus Bunker Index widened, which could have driven away some of the spot deals to Singapore from Zhoushan. The premium for VLSFO rose to $4.30/t in October from $0.65/t in September, with HSFO rising to $29.60/t from $24/t over the same period.
Some bunker suppliers’ unwillingness to sell in the spot market in October also undermined Zhoushan’s bunker sales because the price was near breakeven or a small loss, according to a domestic bunker supplier. Some bunker suppliers prefer doing spot trades in nearby Shanghai when the Zhoushan price is unsatisfactory, Argus’ daily market coverage shows.
China’s overall fuel oil supplies probably fell in October, in line with domestic production, which pushed up its bunker prices. September fuel oil output fell by nearly 170,000t to 2.53mn t from 2.7mn t in August, according to China’s national bureau of statistics. October data have yet to be released but are estimated to have fallen further.
Bunker suppliers had to increase fuel oil imports in October to make up for the reduced production. Bunker suppliers estimated China increased fuel oil imports by at least 400,000t in October to 1.6mn t with 300,000t heading to Zhoushan.
The October bunker supply shortage was reflected in the ex-wharf market in Zhoushan. November-loading cargoes in Zhoushan were offered at a zero differential to the average of November 10ppm (0.001pc) gasoil physical price in Singapore. The differential was about minus $10/t for October loading.
China fuel oil output (‘000t)
Zhoushan-Singapore bunker differential ($/t)
Photo credit and source: Argus Media
Published: 12 November, 2020
Program introduces periodic assessments, mass flow metering data analysis, and regular training for relevant key personnel to better handle the MFMS to ensure a high level of continuous operational competency.
U.S. Claims Register Summary recorded a total USD 833 million claim from a total 180 creditors against O.W. Bunker USA, according to the creditor list seen by Singapore bunkering publication Manifold Times.
Glencore purchased fuel through Straits Pinnacle which contracted supply from Unicious Energy. Contaminated HSFO was loaded at Khor Fakkan port and shipped to a FSU in Tanjong Pelepas, Malaysia to be further blended.
Individuals were employees of surveying companies engaged by Shell to inspect the volume of oil loaded onto the vessels which Shell supplied oil to; they allegedly accepted bribes totalling at least USD 213,000.
MPA preliminary investigations revealed that the affected marine fuel was supplied by Glencore Singapore Pte Ltd who later sold part of the same cargo to PetroChina International (Singapore) Pte Ltd.
‘MPA had immediately contacted the relevant bunker suppliers to take necessary steps to ensure that the relevant batch of fuel was no longer supplied. Further investigations are currently on-going,’ it informs.