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Argus Media: Singapore scrubber spread dips to 10-month low on weaker bunker demand

Scrubber or Hi-5 spread, or the price difference between VLSFO and HSFO, in Singapore reached $154.04/t on 22 February, a 10-month low, says Argus.




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The scrubber or Hi-5 spread, or the price difference between very-low sulphur fuel oil (VLSFO) and high-sulphur fuel oil (HSFO), in Singapore reached $154.04/t on 22 February, a 10-month low.

23 February, 2023

The scrubber spread has gradually fallen since peaking at almost $600/t in July last year, in a reversal of fortune for vessels operating a scrubber. Recessionary fears have dampened demand for bunkers across all grades, which typically narrows the quality spread, but HSFO prices have held up better than VLSFO.

Argus assessed the average premium of VLSFO bunkers over the cargo price in 2022 at $43.34/t, which has fallen to an average of $15.91/t so far in February. The premium of HSFO bunkers over the cargo price averaged $24.75/t in 2022 and has averaged $15.75/t so far in February.

Margins for 180cst HSFO against Dubai crude values in Singapore have been firming since November last year, reaching about six-month highs of -$13.52/bl on 22 February. Margins were last higher at -$12.73/bl on 15 August last year. But Singapore 0.5pc sulphur marine fuel margins fell to over two-year lows in mid-December 2022 and were at over one-month lows of $7.22/bl on 22 February.

"Despite lots of discounted residual Russian barrels in the region, most trading houses here cannot touch them due to self-sanctioning", said a Singapore trader. This has led to a two-tier pricing market for the product since western sanctions on Russia came into effect.

"The strength in HSFO is also due to more scrubbers out there because of the high spread last year, boosting demand", said another trader.

Market participants were initially expecting HSFO prices to be depressed because of more Russian inflows, mostly of the high-sulphur grade diverted to Asia-Pacific after EU sanctions on Russian oil product imports. But some returning south Asian utility demand, particularly from Bangladesh, could have supported markets, they said. Fuel oil arrivals to Bangladesh in February are projected to be around three-month highs of 194,500t (1.25mn bl), according to Vortexa data.

But northeast Asia is also likely not taking much VLSFO to meet utility demand, with ample LNG inventories and LNG prices having come off since September 2022. LNG stocks at Japan's main utilities are also high at 2.63mn t, according to its trade and industry ministry's weekly survey, up by 56pc compared with stocks at the end of February 2022.

The influx of VLSFO cargoes from Kuwait's new 615,000 b/d al-Zour refinery is also likely weakening VLSFO markets. Kuwait's state-owned KPC has sold a total of 1.14mn t of VLSFO for loading over November 2022-April 2023, some of which have headed to Singapore. It is offering 360,000-450,000t more of VLSFO for loading over March-May.

Lean inflows

Low-sulphur residual inflows to Singapore from Europe were lean this month as European refiners upgraded more low-sulphur feedstocks into gasoline, with low-sulphur fuel oil inflows to Singapore in March still projected by traders to be around average volumes of 2mn t. The incremental inflows from Kuwait, along with weaker LSFO bunker demand, could have depressed markets as well.

But how long the spread will stay narrow for remains to be seen, as more HSFO is expected to arrive in Singapore by mid-March, said traders.

Sammy Six and Sarah Giam


Photo credit and source: Argus Media
Published: 24 February, 2023

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Singapore: EPS orders ammonia, LNG dual-fuel vessels from China

EPS signed one contract for a series of ammonia dual-fuel bulk carriers with CSSC Beihai Shipbuilding and another for a series of LNG dual-fuel oil tankers with CSSC Guangzhou Shipbuilding International.






Singapore-based Eastern Pacific Shipping (EPS) on Wednesday (28 February) said it signed two new contract orders in a signing ceremony in Shanghai, one for a series of ammonia dual-fuel bulk carriers with CSSC Beihai Shipbuilding and another for a series of LNG dual-fuel oil tankers with CSSC Guangzhou Shipbuilding International. 

The contracts signed cover four 210,000 dwt ammonia dual-fuel bulk carriers and two 111,000 dwt LNG dual-fuel LR2 oil tankers, expanding our fleet of green vessels on water. 

“These are pivotal for EPS, testament to our continued commitment towards the decarbonisation of shipping,” EPS said in a social media post.

Manifold Times recently reported EPS signing a contract for its first ever wind-assisted propulsion system, partnering with bound4blue to install three 22-metre eSAILs® onboard the Pacific Sentinel

The turnkey ‘suction sail’ technology, which drags air across an aerodynamic surface to generate exceptional propulsive efficiency, will be fitted later this year, helping the 183-metre, 50,000 DWT oil and chemical tanker reduce overall energy consumption by approximately 10%, depending on vessel routing.

Related: Singapore: EPS orders its first wind-assisted propulsion system for tanker


Photo credit: Eastern Pacific Shipping
Published: 1 March 2024

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LNG Bunkering

Malaysia: Port of Tanjung Pelepas completes first LNG bunkering operation

Landmark event involved the CMA CGM Monaco, a 14,024 TEUs containership operated by French shipping giant CMA CGM.






Port of Tanjung Pelepas Sdn Bhd (PTP), a joint venture between MMC Group and APM Terminals, on Wednesday (28 February) announced a significant milestone with the successful completion of its first Liquefied Natural Gas (LNG) bunkering operation. 

The landmark event involved the CMA CGM Monaco, a 14,024 TEUs (Twenty-foot Equivalent Units) capacity containership operated by French shipping giant, CMA CGM.

Tan Sri Che Khalib Mohamad Noh, Chairman of PTP in a statement remarked this latest milestone demonstrates PTP’s commitment to continuously enhance its competitive advantages in an increasingly competitive global market.

“The successful completion of our first LNG bunkering operation also underscores our unwavering commitment to sustainability and environmental leadership. We are proud to partner with Petronas Trading Corporation Sendirian Berhad (PETCO) and CMA CGM on this initiative and showcase PTP’s capabilities as a leading facilitator of clean and efficient maritime operations.”

“This milestone paves the way for further growth in LNG bunkering at PTP, contributing significantly to the decarbonisation of the maritime industry.”

Commenting on this achievement, Mark Hardiman, Chief Executive Officer of PTP stated this latest milestone further highlights PTP’s position as the largest transshipment hub terminal in Malaysia.

“In preparation for the LNG bunkering operation, PTP worked closely since March 2022 with PETCO and CMA CGM, as well as with various other related government agencies to organise table-top exercises (TTX) and workshops, before carrying out the deployment exercise.”

“The success of the bunkering operation is a result of the seamless collaboration and preparations involving rigorous safety procedures through in-depth operational and risk assessments, modelling, and validation. We thank PETCO, CMA CGM all other involved parties for their joint efforts in operationalising the bunkering capability and we welcome partners to work with us to accelerate maritime decarbonisation,” said Hardiman.

Port of Tanjung Pelepas (PTP) is Malaysia’s largest transshipment hub with the capacity to handle 13 million TEUs annually. The port delivers reliable, efficient, and advanced services to major shipping lines and box operators, providing shippers in Malaysia and abroad with extensive connectivity to the global market. PTP is currently ranked 15th among the world top container ports.


Photo credit: Port of Tanjung Pelepas
Published: 1 March 2024

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Alternative Fuels

Wallenius Wilhelmsen to order four additional methanol DF PCTCs

Newbuilds will also be ammonia-ready and able to be converted as soon as ammonia becomes available in a safe and secure way.





Wallenius Wilhelmsen PCTC order

Roll-on/roll-off (Ro-Ro) shipping company Wallenius Wilhelmsen on Tuesday (27 February) declared options to build four additional next-generation Shaper Class pure car and truck carrier (PCTC) vessels.

The 9,300 CEU methanol dual fuel vessels can utilise alternative fuel sources, such as methanol, upon delivery. They will also be ammonia-ready and able to be converted as soon as ammonia becomes available in a safe and secure way.

“Together with our customers we are committed to further shaping our industry and accelerating towards net zero. These new vessels are a vital part of that journey,” says Xavier Leroi, EVP & COO Shipping Services.

This latest commitment brings the total number of Shaper Class vessels currently on order with Jinling Shipyard (Jiangsu) to eight. Wallenius Wilhelmsen also retains further options.

The first of the Shaper Class vessels already ordered are expected to be delivered in the second half of 2026. The four additional vessels under the declared options will be delivered between May and November 2027.


Photo credit: Wallenius Wilhelmsen
Published: 1 March 2024

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