Business

Argus Media: Singapore spot bunker demand falters on high prices

Singapore is very expensive these days and owners are trying to avoid purchasing VLSFO unless they have no other choice, remarked a London-based broker.

Published

1 year ago

June 15, 2022

Admin

Record-high and continuously-rising outright bunker prices are deterring ship owners from buying on the spot market in Singapore, according to several market participants.

14 June, 2022

Record-high and continuously-rising outright bunker prices are deterring ship owners from buying on the spot market in Singapore, according to several market participants.

The price of delivered very-low sulphur fuel oil (VLSFO) in Singapore has averaged $1,117/t so far this month, up by 19pc from its average in May, according to Argus data.

Bunker prices have rallied strongly in line with Brent crude prices since Russia's invasion of Ukraine in March, with sanctions resulting in a severe tightening of crude and product supplies, and an ongoing change in trade flows.

Shipowners are reducing the quantity of fuel purchased in the spot market as a result, hoping for flat prices to cool down. But this is unlikely, given tightening balances in the face of geopolitical uncertainty.

"Spot demand has definitely been poor," said one local trader.

"We can feel the impact of high flat prices weighing on average demand," remarked a local supplier.

Argus has reported an average of eight spot bunkers deals per day so far this month, down from 10 in May.

Shipowners that purchase bunker fuel based on contracts are heard to have been maximising contract liftings. But owners of vessels that tramp — which do not have a fixed schedule, itinerary or ports of call — need to buy fuel on the spot market regardless of price.

"We have very few options here – when ships need bunkers, I need to buy, timing is everything," said one buyer.

"Singapore is very expensive these days and owners are trying to avoid purchasing VLSFO unless they have no other choice, and so many enquiries are much smaller than you would usually expect," remarked a London-based broker.

The higher outright prices also mean that larger cargoes can lead to some owners having issues with outsized credit exposure.

Physical suppliers, meanwhile, are struggling with increasing operating costs, which are depressing their profit margins.

Bunker barges that supply fuel to ships burn low-sulphur marine gasoil (LSMGO). LSMGO prices have risen even more than VLSFO given a lack of availabilities of middle distillates.

"Launch boat operators have been increasing their fuel surcharge and launch fees," said one local gasoil trader.

It is not only Singapore where bunker prices are high, with tight availabilities seen across other ports in Asia, such as South Korea, Japan and China.

VLSFO prices in Fujairah have traded at a discount of up to $107.50/t to Singapore since the middle of May, but that discount is now narrowing again as local supplier Uniper is heard to be tight on product.

Despite slowing spot demand in Singapore, the city state's consumption in May rebounded to over 4mnt, according to data from the Maritime and Port Authority (MPA).

By Sammy Six

Photo credit and source: Argus Media
Published: 15 June, 2022

Milestone

Singapore retains titles as Best Global Seaport and Best Seaport in Asia

Port of Singapore has been named the “Best Global Seaport” for the third consecutive year and the “Best Seaport in Asia” for the 35th time at the 2023 AFLAS Awards.

Published

2 days ago

September 29, 2023

Admin

Singapore retains titles as Best Global Seaport and Best Seaport in Asia

The Maritime and Port Authority of Singapore on Friday (29 September) said the Port of Singapore has been named the “Best Global Seaport” for the third consecutive year and the “Best Seaport in Asia” for the 35th time at the 2023 Asian Freight, Logistics and Supply Chain (AFLAS) Awards.

These accolades recognise the contributions by the Port of Singapore serving as a key node in the global supply chain, and Singapore’s leadership in driving maritime decarbonisation and transformation.

The annual AFLAS Awards is organised by freight and logistics publication, Asia Cargo News, to honour leading service providers in the supply chain community for demonstrating leadership as well as consistency in service quality, innovation, customer relationship management and reliability. Winners were determined by votes cast by readers of the publication.

Mr Chee Hong Tat, Acting Minister for Transport and Senior Minister of State for Finance, said: “Singapore is honoured to be named the Best Global Seaport and Best Seaport in Asia. These awards are the result of the shared effort and strong collaboration between the Government, industry, unions and workers. We will continue to grow our port as an efficient, sustainable, and trusted node in global supply chains.”

Mr Teo Eng Dih, Chief Executive of MPA, said: “These awards are testament to the partnership and collaboration between Maritime and Port Authority of Singapore (MPA) with industry and international partners, the research and enterprise community, as well as unions. MPA remains committed to fostering an environment that encourages enterprise, innovation, and talent development.”

“We will continue to work with our partners to enhance Singapore’s connectivity, advance digitalisation efforts, and accelerate the decarbonisation of international shipping in line with the 2023 IMO strategy on reduction of GHG emissions from ships.”

Photo credit: Maritime and Port Authority of Singapore
Published: 29 September, 2023

Employment

Melvin Lum appointed as KPI OceanConnect Global Accounts Commercial Director in Singapore

Lum will take on the position of Commercial Director from Thomas Lee who was recently promoted to Head of APAC in a management restructure within KPI OceanConnect.

Published

2 days ago

September 29, 2023

Admin

Melvin Lum appointed as KPI OceanConnect Global Account Commercial Director in Singapore

Global marine energy solutions provider KPI OceanConnect on Thursday (28 September) announced the appointment of Melvin Lum as Commercial Director for its Global Accounts team in Singapore.

Lum will take on the position of Commercial Director from Thomas Lee who was recently promoted to Head of APAC in a management restructure within KPI OceanConnect.

The Global Accounts team is an expert unit within KPI OceanConnect, specialised in providing long-term, tailored fuel strategy solutions to a portfolio of Key Accounts on a global scale. Dedicated regional teams located in London, Houston and Singapore work seamlessly across the world and around the clock to support their clients.

Lum joined KPI OceanConnect in 2021 as Senior Key Account manager and has made a significant contribution to the development of the team and optimisation of the daily operations of the unit in Singapore. Lum has vast experience across the supply chain and previously worked with TotalEnergies, Glencore and Global Energy Group prior to joining KPI OceanConnect.

Henrik Zederkof, Head of Global Accounts at KPI OceanConnect, said: "It is always a pleasure to witness the growth of our team members, and Melvin's progression is no exception. I have full confidence in Melvin's expertise, ability to lead the unit and dedication to his team. I look forward to seeing the progress of Melvin and his team, which will undoubtedly bring significant value to our numerous partners and the wider organisation.”

"Melvin will assume a pivotal role within the Global Accounts management team, leveraging his extensive experience in supply chain management and profound insight into emerging technologies. In his new role, Melvin will further enhance our team's skill set, aligning them with our ongoing objectives of supporting our partners in their green transition and digitalisation endeavours."

Melvin Lum, Commercial Director of KPI OceanConnect Global Accounts in Singapore, said: "I am very appreciative of the support and confidence from our management team as I take on this exciting new role. I am enthusiastic to work with the team as we continue to deliver an exceptional experience to our partners and stakeholders with dedication, innovation and passion."

Photo credit: KPI OceanConnect
Published: 29 September, 2023

Biofuel

TotalEnergies Marine Fuels renews ISCC EU certification for bio bunker fuel

Firm’s operations teams in Singapore and Geneva successfully renewed its ISCC EU sustainability certification for the supply of biofuel bunkers, says Louise Tricoire, Vice President.

Published

2 days ago

September 29, 2023

Admin

TotalEnergies Marine Fuels renews ISCC EU certification for bio bunker fuel

Louise Tricoire, Vice President of TotalEnergies Marine Fuels recently said the firm’s operations teams in Singapore and Geneva successfully renewed its International Sustainability and Carbon Certification (ISCC) EU sustainability certification for the supply of biofuel bunkers.

“This means that TotalEnergies Marine Fuels can continue sourcing and supplying marine biofuels in accordance with EU renewable energy regulations ensuring the highest sustainability standards,” she said in a social media.

“It's the third year in a row that we have successfully renewed this certification, after a deep and comprehensive audit which showed zero non-conformity.”

She added marine biofuels have grown in demand among shipping companies that want to cut greenhouse gas emissions immediately.

“TotalEnergies Marine Fuels offers marine biofuels commercially in Singapore and we are starting in Europe. This certification enables us to accompany our customers in their decarbonisation journey with the best standard solutions available today.”

Photo credit: TotalEnergies Marine Fuels
Published: 29 September, 2023