Maiko Nakashima of global energy and commodity price reporting agency Argus Media on Monday (15 February) published a summary on market developments that resulted in increased HSFO demand in Japan:
Japanese high-sulphur fuel oil (HSFO) demand is gradually rising in line with an increase in the number of vessels fitted with scrubbers.
Japan’s HSFO sales have increased to around 20-25pc of the country’s total bonded bunker demand, from 10-20pc a year earlier, Japanese bunker traders said. Most HSFO supplies are based on long-term contracts, as shipowners look to lock in supplies even after the bulk of the market switched to using very low-sulphur fuel oil (VLSFO) from HSFO following the International Maritime Organization (IMO) 2020 rules.
Major Japanese shipowners chose not to cancel their retro-fit scrubber orders, even when the spread between HSFO and VLSFO prices collapsed during the second quarter of last year because of the Covid-19 pandemic. VLSFO’s premium to HSFO narrowed to just $13/t in June 2020 from $345/t in January.
Japanese bonded marine fuel sales totalled 92,000 b/d of in December, up by 13.6pc from a year earlier and higher up by 1.1pc from November, the latest data released by Japan’s trade and industry (Meti) today show.
Japan’s bonded bunker consumption hit 32.2mn bl (88,000 b/d) in 2020, up by 12.5pc from 2019.
Photo credit and source: Argus Media
Published: 16 February, 2021
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