• Follow Us On Our Preferred Social Media Platform:

ENGINE: East of Suez Bunker Fuel Availability Outlook

02 Jun 2021

The following article regarding regional bunker fuel availability outlooks for East of Suez ports with special attention to availability in Singapore has been provided by online marine fuels procurement platform ENGINE for publication on Singapore bunkering publication Manifold Times:

1 June 2021

Prompt delivery slots available amid more muted bunker demand in Fujairah, and weaker bunker demand weighs on VLSFO refinery margins in Singapore.

Singapore’s fuel oil inventories fell to two-month lows of 22.88 million bbls last week. The stocks have been drawn down as Singapore imported 37% less fuel oil on a weekly average in May than in April.

Weekly average exports were down by 11% over the same period, resulting in a 45% smaller import surplus in May than in April.

Singapore’s fuel oil refinery margins have weakened amid a dip in bunker demand and in expectation of an uptick in fuel oil cargo imports from the Americas, however.

Lower bunker demand has freed up barges to improve availability in both Singapore and Fujairah in recent weeks. Lead times for VLSFO are around 5-6 days in Singapore and Fujairah. Zhoushan’s suppliers continue to have ample supplies and lead times of around three days required.

LSMGO can be procured with 3-4 days of notice in Singapore and Zhoushan, and six days in Fujairah. HSFO380 requires around 10 days in Singapore, Fujairah and Zhoushan.

Fujairah’s fuel oil stocks were drawn for a second consecutive week last week, data from S&P Global Platts and the Fujairah Oil Industry Zone showed. The inventories fell nearly 13% lower to 11.87 million bbls on 24 May. The Middle Eastern region’s fuel oil consumption normally increases in the lead-up to the peak season for air conditioning, which boosts fuel oil demand for power generation.

Despite slimmer inventories, prompt bunker delivery slots are still available in Fujairah, as bunker suppliers have volumes to sell across grades and as more muted demand frees up bunker barges.

Zhoushan has been pricing VLSFO competitively against Singapore recently, and the Chinese port’s LSMGO price premium over Singapore narrowed from $34/mt at the beginning of the week, to $13/mt on Tuesday.

A South Korean producer reduced its fuel oil output last month, contributing to tighten bunker supplies. VLSFO requires around 4-5 days of lead time in the country’s southern ports and prices remain at significant premiums to other regional ports.

VLSFO prices have been higher in South Korean ports relative to competing Japanese ports, and particularly against Singapore and Chinese ports such as Zhoushan. Uncompetitive prices have led South Korean ports to lose out on VLSFO stems to these ports.

Two Japanese refineries have restarted production after being offline for maintenance. Refinery runs across Japanese refineries dropped to 58% last week and resulted in slightly less overall fuel oil production.

The biggest impact has been on low sulphur fuel oil (LSFO), with production down by a quarter from April to May. The production shortfall was partly made up for by an uptick in imports and lower exports, and LSFO stocks grew by 11% between April and May.

Japanese HSFO production was more intact through May and rose slightly to boost stocks by 5% in May. Higher HSFO exports were countered by more production and rare import cargoes to fill the gap.


Photo credit: ENGINE
Published: 2 June, 2021

Related News

Featured News

Our Industry Partners

PR Newswire