Business

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.

Published

2 years ago

February 24, 2023

Admin

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

Winding up

Singapore: Annual general meetings scheduled for Xihe Holdings subsidiaries

Development includes Da Xin Tankers, Dong Sheng Tankers, Dong Ya Tankers and Hua Zhong Shipping; meetings will be held electronically on 7 and 8 May, according to Government Gazette notices.

Published

20 hours ago

April 23, 2025

Admin

Several notices were published on the Government Gazette on Tuesday (22 April) regarding the annual general meetings of the companies and creditors to be held electronically on 22 April for Xihe Holdings subsidiaries.

The subsidiaries are Dong Sheng Tankers Pte Ltd, Da Xin Tankers Pte Ltd, Dong Ya Tankers Pte Ltd, and Hua Zhong Shipping Pte Ltd.

Annual general meeting for Dong Sheng Tankers are to be held on 8 May at the following times:

For the company: 2pm

Annual general meetings for Da Xin Tankers are to be held on 7 May at the following times:

For the company: 10am
For the creditors: 11am

Annual general meetings for Dong Ya Tankers are to be held on 8 May at the following times:

For the company: 10am
For the creditors: 11am

Annual general meetings for Hua Zhong Shipping are to be held on 7 May at the following times:

For the company: 2pm
For the creditors: 3pm

The agenda for all the meetings are:

To receive an update on the liquidation.
To receive an account of the Liquidators’ acts and dealings, and of the conduct of the winding up

Manifold Times previously reported on the winding up of Da Xin Tankers, Dong Ya Tankers and Hua Zhong Shipping Pte Ltd and the appointment of the joint and several liquidators of the firms.

Photo credit: Drew Beamer
Published: 23 April, 2025

LNG Bunkering

Osaka Gas launches shore-to-ship LNG bunkering service at its terminal

Company says it is the first gas utility company in Japan to offer LNG bunker fuel at its terminal to vessels and is also exploring the potential of replacing LNG with e-methane as a marine fuel.

Published

20 hours ago

April 23, 2025

Admin

Osaka Gas launches shore-to-ship LNG bunkering service at its terminal

Osaka Gas on Monday (21 April) said it has launched its shore-to-ship LNG bunkering service, becoming the first gas utility company in Japan to offer liquefied natural gas (LNG) at its terminal to vessels.

The first delivery took place today at Osaka Gas’ Senboku LNG Terminal in Takaishi City, Osaka Prefecture, where LNG was supplied to Verde Heraldo, a bulker operated by Mitsui OSK Lines (MOL).

Manifold Times previously reported that the bulker will sail under long-term transport contracts to supply raw materials for JFE Steel Corporation's mills.

With the launch of the shore-to-ship service, in addition to its existing truck-to-ship LNG bunkering service—operational since 2019—Osaka Gas enhances its LNG fuel delivery capabilities to address the current scarcity of facilities in Japan that can supply LNG to vessels.

The company’s future plans include the introduction of a ship-to-ship LNG bunkering service utilising a dedicated LNG bunkering vessel, scheduled to commence in fiscal 2026.

These supply methods aim to provide a stable and flexible LNG fuel supply to an increasing number of LNG-fuelled vessels as the maritime industry transitions away from heavy fuel oil.

This growth in LNG-fuelled vessels is driven by global decarbonisation trends and the International Maritime Organization’s target to achieve net zero greenhouse gas emissions by 2050. Through its LNG bunkering services, Osaka Gas is well-positioned to contribute to maritime industry sustainability.

Osaka Gas launches shore-to-ship LNG bunkering service at its terminal

In addition to expanding LNG fuel supply to vessels, Osaka Gas is exploring the potential of replacing LNG with e-methane as a marine fuel.

Photo credit: Osaka Gas
Published: 23 April, 2025

Alternative Fuels

Japan: J-ENG begins co-firing of first full-scale marine engine with ammonia

Company says the first Japanese-developed and manufactured commercial full-scale, low-speed, ammonia-fuelled two-stroke engine has started co-firing operation with ammonia.

Published

20 hours ago

April 23, 2025

Admin

Japan: J-ENG begins co-firing of first full-scale marine engine with ammonia

Japan Engine Corporation (J-ENG) on Monday (21 April) said the first Japanese-developed and manufactured commercial full-scale, low-speed, ammonia-fuelled two-stroke engine has started co-firing operation with ammonia, which will be installed in a vessel.

J-ENG is developing the engine under the “Green Innovation Fund Project: Next-generation Ship Development” of the New Energy and Industrial Technology Development Organization (NEDO).

Since May 2023, when J-ENG started the world's first ammonia co-firing operation of a large, low-speed, two-stroke engine in a test engine, J-ENG has obtained many results and knowledge, including stable operation at high ammonia co-firing rates and safe handling of ammonia, through various test operations over a period of about a year and a half.

J-ENG will conduct verification operations on the full-scale engine and plans to ship the engine in October of this year. The engine will be installed on an Ammonia-fuelled Medium Gas Carrier (AFMGC) and then demonstration operations of the vessel will be carried out then.

In order to accommodate a wide variety of ammonia-fueled vessels, J-ENG is also concurrently developing an ammonia-fueled engine with a cylinder bore of 60cm, following the first engine with a 50cm cylinder bore mentioned above, for several promising follow-on projects.

Furthermore, after achieving the development and social implementation of these engines, the company has decided to construct a new plant with the support of a subsidy project by the Ministry of the Environment and the Ministry of Land, Infrastructure, Transport and Tourism through the GX Economic Transition Bonds.

The new plant, which is scheduled for completion in 2028, will expand the production of ammonia fuel engines (in the product mix with fuel oil engines) and promote the spread and expansion of zero-emission ships.

“J-ENG, as a first mover of next-generation fuel engines, will contribute to the development of the Japanese shipping and shipbuilding industries through the early launch and expansion of these engines, and at the same time, contribute to the reduction of greenhouse gases (GHG) in international shipping and the achievement of carbon neutrality by 2050,” the company said on its website.

Photo credit: Japan Engine Corporation
Published: 23 April, 2025