• Follow Us On Our Preferred Social Media Platform:

Argus Media: Istanbul bunker prices supported by lower HSFO output

22 Aug 2019

Global energy and commodity price reporting agency Argus Media on Tuesday (20 August) provided a marine fuels industry related update:

Bunker prices at the port of Istanbul have fallen by around 15pc in the past month, a far less acute decline than at some other locations in the east Mediterranean. Prices are largely being affected by regional refiners' approaches to the International Maritime Organisation (IMO) sulphur cap that comes into effect next year.

The price of high sulphur 380cst (HS380) at Istanbul fell from $438.75/t on 12 July to $374.50/t on 20 August. At the Greek port of Piraeus, the HS380 price fell from $430.50/t to $309.75/t, or 28pc, over this period, according to Argusdata.

The fall is mainly attributable to lower crude prices — timely for cruise ship owners purchasing bunker fuel on the spot market during the peak summer season. But several bunker suppliers and traders said prices at Istanbul have been cushioned by a reduction in regional HSFO production.

Turkey's Tupras, traditionally one of the largest HSFO suppliers in the Mediterranean region, has reduced its output in order to increase production of bitumen, a response to margin volatility ahead of the IMO 2020 change. Refiners in Israel, Greece and Italy are also likely to have lowered HSFO production, and regional suppliers have started to clean out tanks in preparation for IMO 2020.

Argus assessed Istanbul HS380 at a $70.75/t premium to Piraeus on 16 August — the highest on records going back to 2012, and compared with a premium of just 75¢/t on 11 July. For most of 2019, Istanbul's premium over Piraeus had been in a range of $0-20/t, and it averaged $11.87/t during the first half of the year.

HS380 was last heard traded in Istanbul at $370/t and 180cst traded at $420/t, according to one supplier.

Istanbul MGO prices rise on lower Russian export

Marine gasoil (MGO) prices in Istanbul moved sharply compared with those in Piraeus in recent weeks, as some bunker suppliers faced shortages because of lower imports from Russia. The premium for MGO at Istanbul over Piraeus reached a high of $94.50/t on 16 August, and fell back to $79.25/t on 20 August, according to Argus data.

Local refineries rarely supply MGO as Turkey is net short of diesel.

Turkish bunker suppliers said MGO imports from Russia could increase in September.

The higher prices for HSFO and MGO at Istanbul do not appear to have dampened demand. Activity picked up at the end of last week after public holidays for Eid al-Adha over August 11-15. In Greece, peak cruise season typically leads to higher bunkering demand; but an uptick in sales in August could be attributed to the disparity in prices between ports in the east Med.

"In the last two weeks I have seen higher sales than in the first week of August… mainly from container [ships]," a Greek supplier said.

Tighter HSFO supply boosts prices across the Med Basin

The effect of lower HSFO supply has rippled across the Mediterranean, and helped to increase the price of bunkers at local ports over locations in northwest Europe. Argus assessed the premium for Gibraltar HS380 over Rotterdam HS380 at $41/t today, after a recent high of $41.50/t on 15 August — the highest since $45/t on 14 January.

The premium for Gibraltar over Rotterdam was just $3/t on 12 March. The increase reflects relatively tighter HSFO supply by refiners in the Mediterranean region over their peers in the Amsterdam-Rotterdam-Antwerp (ARA) trading and refining hub.

Source: Argus Media
Published: 23 August, 2019


Related News

Featured News

Our Industry Partners

  • argus

PR Newswire