Business

Argus Media: Volatility rocks Singapore gasoil bunker prices

Uncertainty regarding supply availability and demand, amongst others, is leading to price swings in gasoil cargo prices and also delivered LSMGO bunker prices in Singapore.

Published

2 years ago

September 26, 2022

Admin

Uncertainty regarding supply availability and demand, as well as the actual volume of export quotas from China, are leading to price swings in gasoil cargo prices and also delivered low-sulphur marine gasoil (LSMGO) bunker prices in Singapore.

23 September 2022

The premium of LSMGO over very-low sulphur fuel oil (VLSFO) bunkers typically averages around $40-60/t. But since the war in Ukraine it has risen to levels up to $380/t, according to Argus data.

LSMGO bunkers contain 0.1pc sulphur, or 1,000ppm, but are priced in line with gasoil cargo futures prices with a sulphur content of 10ppm because of this market’s deep liquidity and some market participants’ need for hedging.

LSMGO bunkers are mainly traded in small quantities and used to power vessels’ auxiliary engines, while gasoil cargoes are traded in much larger quantities for road transportation and industrial uses with different specifications.

This disconnect has seen LSMGO bunker prices trading in more volatile ways in recent weeks than other key grades such as VLSFO and high-sulphur fuel oil (HSFO) bunkers.

The volatility in LSMGO bunker prices is likely reflecting the volatility of the 10ppm sulphur gasoil market, with the Asian gasoil market rocked in recent trading sessions by conflicting reports on China’s export situation.

The market has been weighing in the bearish news of a large increase in export quotas from China, with expectations of another 15mn t in export quotas on the way after the initial release of 1.5mn t. Since the announcement, conflicting market discussions have emerged questioning the scope of the quotas and whether the large volumes of exports are even feasible, considering logistical limitations such as the large volumes of crude supplies required to sustain such large exports and the limited freight available for shipping out oil products.

Some market participants have even ventured that it is “not possible” for China to export 15mn t of products in the next three months, citing such issues. This scepticism is likely being baked into the market, with Asian 10ppm sulphur gasoil margins — or the Singapore 10ppm sulphur gasoil swap against Dubai crude values — recovering from six-month lows of $26.93/bl on 15 September, when the expectations of extra export quotas first emerged, to around $35/bl as of 22 September.

Tighter supplies

The 10ppm sulphur gasoil market has otherwise been supported by persistently weak stocks of middle distillates, while supplies of gasoil are being capped this and next month by several turnarounds at Asia-Pacific and Mideast Gulf refineries. A stronger draw of gasoil towards west of Suez, as European demand is expected to firm with more gas-to-oil switching for power generation, should also continue to support the low-sulphur diesel market.

But LSMGO supplies should not be as tight as ultra-low sulphur diesel on a fundamental basis. The Singapore market is unlikely to see supplies tighten considerably, said a gasoil bunker trader. “The bulk of our imports originate from South Korea hence chances of exports to Europe are slim, with the only competitors being Vietnam and China”.

Ex-wharf sellers of LSMGO in Singapore have so far not signalled any cargo tightness, with supplies and demand stable, although shipment delays have emerged occasionally.

By Sammy Six and Cara Wong

Photo credit and source: Argus Media
Published: 23 September, 2022

LNG Bunkering

China: Ningbo Zhoushan Port completes first LNG bunkering operation for 2025

Bunkering vessel “Hai Yang Shi You 302” supplied more than 10,000 cubic metres of LNG bunker fuel to containership “MSC Adya” at the Ningbo-Zhoushan Port port on 5 January.

Published

3 days ago

January 10, 2025

Admin

China: Ningbo Zhoushan Port completes first LNG bunkering operation for 2025

Zhejiang Pilot Free Trade Zone Zhoushan Area on Wednesday (8 January) said Ningbo-Zhoushan Port successfully completed its first LNG bunkering operation for the year.

Bunkering vessel Hai Yang Shi You 302 supplied more than 10,000 cubic metres (m3) of LNG bunker fuel to containership MSC Adya at the port on 5 January.

Zhejiang Seaport International Trading, the bunker supplier for the operation, successfully obtained the Zhoushan Anchorage LNG bunkering licence in June 2024, extending refuelling services from dock to sea.

The company’s services cover Meishan, Chuanshan, Daxie and other port areas.

As China's first river-sea LNG transport and bunkering ship, Hai Yang Shi You is currently placed permanently at Ningbo Zhoushan Port, providing a variety of bunkering methods such as ship-to-ship and ship-to-shore.

Zhejiang Seaport International Trading will continue to expand the scope of bonded LNG bunkering operations and new alternative fuels such as green methanol, ammonia and biofuels in the Zhoushan Area.

Photo credit: Zhejiang Pilot Free Trade Zone Zhoushan Area
Published: 10 January, 2025

Business

Shandong Port Group bans US-sanctioned tankers from entering its ports

Group has prohibited ports to dock, unload or provide ship services to vessels on the Office of Foreign Control list managed by the US Department, according to a Reuters news report.

Published

3 days ago

January 10, 2025

Admin

Shandong Port Group bans US-sanctioned tankers from entering its ports

China’s Shandong Port Group has reportedly blocked tankers affected by US sanctions from entering its ports, according to an exclusive news report by Reuters on Wednesday (8 January).

Citing a notice from the port, which was issued on 6 January and shared to Reuters by traders, the Group has prohibited ports to dock, unload or provide ship services to vessels on the Office of Foreign Control list managed by the US Department.

In another notice released on 7 January, the ban came after sanctioned tanker Eliza II unloaded at Yantai Port in early January.

Shandong Port operates major ports on the east coast of China including Qingdao, Rizhao and Yantai, which are major terminals for importing sanctioned oil.

The traders said the ban could slow imports into China, the world’s largest oil importing nation, and increase shipping costs.

Photo credit: Shandong Port Group
Published: 10 January, 2025

Business

US DoD designates COSCO Shipping and CNOOC as ‘Chinese military companies’

COSCO Shipping has responded that the company and its subsidiaries ‘have consistently adhered to local laws and regulations, maintaining strict compliance in all international operations’.

Published

3 days ago

January 10, 2025

Admin

China: Cosco Shipping and bp to explore collaboration into methanol bunker fuel

The US Department of Defense (DoD) on Tuesday (7 January) has added China’s state-owned shipping company COSCO Shipping and two of its subsidiaries to its list of companies for allegedly having links to the Chinese military.

The subsidiaries are COSCO SHIPPING (North America) and COSCO SHIPPING Finance.

DoD released the update to the names of "Chinese military companies" operating directly or indirectly in the United States in accordance with the statutory requirement of Section 1260H of the National Defense Authorisation Act for Fiscal Year 2021. The Department said it will update the list with additional entities as appropriate.

Updating the Section 1260H list of "Chinese military companies" is an important continuing effort in highlighting and countering the People’s Republic of China's (PRC) Military-Civil Fusion strategy, DOD added.

The list also included other Chinese shipping-related companies such as shipbuilders China Shipbuilding Trading and China State Shipbuilding Corporation, oil company China National Offshore Oil Corporation (CNOOC), CNOOC China and CNOOC International Trading.

Shipping container manufacturer China International Marine Containers (CIMC) was also included on the list of companies.

In a response to the move, COSCO Shipping said it has noted the recent inclusion of the company and its subsidiaries to the sanctions list.

“COSCO Shipping and its subsidiaries have consistently adhered to local laws and regulations, maintaining strict compliance in all international operations,” it said on its website.

“We remain committed to facilitating global trade and providing high-quality commercial shipping and logistics services to clients worldwide, including agricultural producers, manufacturers, energy firms, retailers, and exporters in the United States.”

“We emphasise that none of the aforementioned companies are ‘Chinese military companies’. We will engage with U.S. authorities to clarify this matter. This designation does not impose sanctions or export controls, and our global operations will continue uninterrupted.”

Photo credit: COSCO Shipping
Published: 10 January, 2025