Bunker Fuel

ENGINE: East of Suez Bunker Fuel Availability Outlook (13 Feb 2024)

VLSFO availability remains tight in Singapore; bunker demand low in South Korean and Japanese ports; rough weather conditions disrupt bunker operations in UAE ports.

Published

1 year ago

February 14, 2024

Admin

The following article regarding regional bunker fuel availability outlook for the East of Suez region has been provided by online marine fuels procurement platform ENGINE for publication on Singapore bunkering publication Manifold Times:

VLSFO availability remains tight in Singapore
Bunker demand low in South Korean and Japanese ports
Rough weather conditions disrupt bunker operations in UAE ports

Singapore and Southeast Asia

Availability of VLSFO remains constrained in Singapore. Five suppliers are struggling to meet delivery schedules, a source says. Recommended lead times for VLSFO hover around 12 days. HSFO supply is also tight, with lead times ranging from 9-12 days.

LSMGO supply is relatively better compared to the other two grades. Lead times of 4-8 days are recommended for the grade.

Singapore's residual fuel oil stocks have decreased by 3% so far this month compared to January, the latest report from Enterprise Singapore showed. The port's net fuel oil imports have slumped by 20%, amounting to a 1.03 million bbls decrease this month. This drop, coupled with a minor decrease of 7,000 bbls in fuel oil exports, have contributed to the stock drawdown. Meanwhile, Singapore's middle distillate stocks have remained relatively steady compared to January.

In Malaysia's Port Klang, VLSFO and LSMGO availability is normal, with multiple suppliers able to offer prompt dates. However, HSFO availability continues to be strained, mirroring recent weeks' trends.

VLSFO and LSMGO availability is normal across several Indonesian ports, such as Jakarta and Surabaya.

China and East Asia

Bunkering activities in Zhoushan have slowed down due to the Chinese Lunar New Year holidays. Most suppliers are expected to resume operations after the holiday period, potentially by Monday. Some suppliers in Zhoushan can supply stems for dates only after 20 February, as customs authorities are closed during the holiday period.

In the northern Chinese port of Dalian, VLSFO and LSMGO supply is tight, while nearby Tianjin faces supply shortages for all fuel grades. Southern Chinese ports, including Shanghai, Xiamen and Guangzhou, are also experiencing tight availability of VLSFO and LSMGO, with Shanghai reporting tightness in HSFO as well.

Conversely, in Hong Kong, all bunker fuel grades remain readily available, with lead times of around seven days, consistent with the previous week.

In South Korean ports, the Chinese Lunar New Year holidays have contributed to keeping bunker demand low. Lead times for VLSFO and HSFO are around seven days. Meanwhile, LSMGO remains readily available and has short lead times of about three days, contrasting with the varied lead times of 3-10 days observed last week. However, concerns arise regarding potential disruptions to bunker deliveries between 13-18 February due to anticipated high winds and waves in key South Korean ports of Ulsan, Onsan, Busan, Daesan, Taean, and Yeosu.

In Japan, the bunker fuel market is grappling with sluggish demand attributed to both high bunker prices and adverse weather conditions. Tokyo's VLSFO was priced about $42/mt higher than Singapore's and $47/mt higher than Zhoushan's on Tuesday. Lead times vary across key Japanese ports, with around four days in Tokyo, Chiba, Osaka, and Kobe, approximately seven days in Nagoya and Yokkaichi, and longer periods of 11-12 days in Mizushima and Oita.

Additionally, adverse weather forecasts for Ho Chi Minh in Vietnam and Koh Sichang in Thailand toward the end of the week raise concerns about potential bunkering disruptions in these ports.

South Asia

Kandla, situated on India's northwest coast, currently boasts abundant availability of VLSFO and LSMGO. However, several other Indian ports, such as Cochin, Chennai, Visakhapatnam, Paradip, and Haldia, are grappling with supply shortages for both grades.

In Mumbai, some suppliers are almost running out of VLSFO and LSMGO stocks, according to a source.

Conversely, the Sri Lankan port of Trincomalee has ample availability of all bunker fuel grades.

Middle East

The persistent attacks on commercial ships in the Red Sea have caused shipping companies to opt for rerouting vessels around Africa instead of utilising the shorter Suez Canal route. As a result, this alteration in shipping routes has gradually impacted bunker demand in Fujairah.

Despite a slowdown in demand, prompt availability remains exceptionally constrained for all grades in Fujairah. Adverse weather conditions since Sunday have prompted several suppliers in Fujairah to halt bunker operations, although some can still deliver based on prevailing weather conditions.

Swells up to a meter were seen in Fujairah on Tuesday, which impacted operations. Calmer weather conditions from Wednesday are expected to normalise bunker operations and ease bunker backlogs. Recent weather-related disruptions have caused severe bunker backlogs and delivery delays. Lead times of 7-10 days are recommended for all grades in Fujairah. Similarly, prompt availability is tight in the UAE port of Khor Fakkan, where similar lead times are advised for all grades.

Port operations at Jebel Ali port in the UAE resumed on Monday night after a brief suspension, according to GAC Hot Port News. Adverse weather conditions have also impacted bunker deliveries in the Omani port of Sohar.

By Tuhin Roy

Photo credit and source: ENGINE
Published: 14 February, 2024

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The 2nd Forum on the Commercialisation of Biofuels for Maritime Vessels, hosted by the Ministry of Oceans and Fisheries and co-organized by UPA and KMC, drew around 300 key stakeholders from across the shipping, energy, terminal, shipbuilding, and finance sectors.

The event underscored the increasing urgency of eco-friendly fuel adoption, following the International Maritime Organization (IMO)'s approval of mid-term greenhouse gas reduction measures.

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Photo credit: Ulsan Port Authority
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Photo credit: Solutions for Our Climate
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Photo credit: DS NORDEN
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