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ENGINE: East of Suez Bunker Fuel Availability Outlook

05 Jan 2022

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:

5 January, 2022

  • Fuel oils tight in key ports
  • Fujairah hit by rough weather
  • China ups low sulphur fuel oil quotas

VLSFO supply continues to be tight in Singapore, keeping its price at slight premiums over other key ports like Zhoushan and Fujairah.

The earliest delivery date for VLSFO and HSFO380 stems in Singapore is 10-12 days ahead, compared to 5-6 days for the more ample LSMGO grade. HSFO380 continues to be tight as fewer suppliers offer it, while VLSFO supply has been squeezed partly as a result of fewer cargo inflows.

Singapore’s net fuel oil imports – which include both high and low sulphur grades – fell by 30% on the month in December and contributed to draw stock levels down to their lowest in three months, Enterprise Singapore data showed last week.

Gale-force winds hit Fujairah from the west on Tuesday, delaying some bunker operations and incoming cargo replenishments. The winds are set to normalise briefly on Wednesday before intensifying towards a peak of 37 knots on Thursday.

Bunker fuel availability was already tight in the UAE port, especially HSFO380. The earliest delivery date for the high sulphur grade is about 12 days ahead, compared to nine days for VLSFO and LSMGO stems.

A shortage of VLSFO cargo volumes in Fujairah has made barge loading schedules more unpredictable, sources say. Most suppliers are unwilling to commit to bigger stems, pushing up price premiums for larger quantities.

In Zhoushan, bunker fuel availability is mixed. VLSFO and HSFO380 grades are tight with suggested lead times of up to seven days. LSMGO availability is normal and prompt product is readily available.

Meanwhile, restrictions on container handling have been implemented in in Zhoushan’s adjoining port of Ningbo after a rise in Covid-19 cases, a source says.

China’s Ministry of Commerce has allocated 30% more low sulphur fuel oil for export in the first allotment of quotas for this year than it did last year, Reuters reports. The fuel will mostly end up in Zhoushan and other Chinese bunker ports and be sold for “export” as duty-free bonded bunkers.

Five suppliers were awarded quotas, with state-run Sinopec taking over 60% of the total. China recently allowed suppliers in Guangzhou and Shenzhen to supply bonded bunker fuels in a move to grow them as more competitively priced bunker ports – as it has with Zhoushan in recent years.

All fuel grades remain tight in South Korean ports. The earliest delivery date for VLSFO in the country’s southern Busan, Ulsan and Yeosu ports has been pushed back to 11-13 days out.

 

Photo credit: ENGINE
Published: 5 January, 2022

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