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:
- Very prompt VLSFO availability remains tight in Singapore
- Bunker demand low in weather-exposed Zhoushan
- VLSFO and LSMGO supply tight in several Indian ports
Singapore and Southeast Asia
Despite relatively low bunker demand in Singapore, the availability of VLSFO for very prompt dates (0-2 days) remains limited, with certain suppliers recommending lead times of 6-8 days. Some suppliers can accommodate stems for very prompt dates, but these are typically priced about $20-25/mt higher than for dates further out, according to a trader. Similarly, prompt supply of HSFO is under pressure, with lead times ranging from 6-12 days, slightly up from the previous week. Lead times for LSMGO vary between 2-9 days, maintaining consistency with the previous week’s figures.
Enterprise Singapore’s latest data indicates that residual fuel oil stocks in Singapore averaged 5% lower in February compared to January. Despite a 16% decline in net fuel oil imports, the port’s fuel oil stocks remained above 21 million bbls for the second consecutive month. Fuel oil exports surged by 571,000 bbls, offsetting the 244,000 bbls decline in imports and contributing to the stock draw. Conversely, middle distillate stocks in Singapore rose and averaged 27% higher in February.
In Port Klang, Malaysia, the availability of VLSFO and LSMGO remains steady, but HSFO supply is limited. On the contrary, VLSFO availability is tight in the Indonesian ports of Jakarta and Surabaya, while Balikpapan boasts a good supply of the grade.
China, East Asia and Oceania
In China’s Zhoushan, availability of all bunker fuel grades remains good, with suppliers recommending lead times of 3-5 days, similar to the previous week. However, bunkering was suspended in Zhoushan on Tuesday due to rough weather conditions. Bunker deliveries are likely to resume fully on Thursday, when calmer weather is forecast.
Conversely, Dalian is experiencing constrained availability of VLSFO and LSMGO, while Tianjin is facing tightness across all fuel grades. Qingdao is encountering limited availability for prompt delivery of VLSFO and LSMGO, with HSFO supply being subject to inquiry. In southern ports like Shanghai and Guangzhou, VLSFO and LSMGO availability is tight, with HSFO also encountering constraints in Shanghai. However, Fuzhou, Yangpu, and Xiamen are reporting ample availability of both low-sulfur fuel grades.
In Hong Kong, bunker fuel supply remains good amid average demand. Most suppliers recommend lead times of approximately seven days, consistent with the previous week. However, high winds and waves are forecast in the port over the weekend, which might impact bunker operations at the port.
LSMGO demand has climbed in several South Korean ports, partly because the grade’s prices in South Korea have been lower compared to nearby Chinese ports. Busan’s LSMGO price was at a discount of $28/mt to Zhoushan’s on Tuesday. Increased LSMGO demand has caused availability constraints and pushed lead times to nearly nine days in South Korean ports. Some suppliers can still offer stems for prompt delivery, but these are typically priced higher, a source says.
On the other hand, VLSFO and HSFO availability have improved in South Korean ports. Lead times for VLSFO and HSFO have decreased to 4-8 days and around two days, respectively, from 8-14 days last week. However, rough weather is forecast throughout this week and may impact bunkering in the South Korean ports of Ulsan, Onsan, Busan, Daesan, Taean and Yeosu.
In Japan, sluggish bunker demand persists due to high prices and limited cargo availability, which has been further exacerbated by adverse weather conditions. Tokyo’s VLSFO was priced about $68/mt higher than Zhoushan’s on Tuesday and $66/mt higher than Singapore’s. Lead times vary across key Japanese ports, ranging from 5-8 days in Tokyo, Chiba, Osaka, and Kobe, to longer periods of 11-15 days in Nagoya, Yokkaichi, Mizushima, and Oita.
Furthermore, adverse weather forecasts for Subic Bay in the Philippines, Ho Chi Minh in Vietnam, and Tauranga in New Zealand towards the end of the week have raised concerns about potential disruptions to bunkering operations in these ports.
South Asia
Several ports across India, including Kandla, Chennai, Visakhapatnam and Haldia, are facing challenges due to shortages of VLSFO and LSMGO.
Mumbai, Cochin, and Paradip are particularly affected, with some suppliers on the verge of depleting their stocks of VLSFO and LSMGO. A supplier in Tuticorin, situated on the southeast coast of India, is also running low on VLSFO.
In contrast, the supply situation in the Sri Lankan port of Trincomalee appears stable, with normal availability of all grades of fuel and lead times of seven days recommended.
Middle East
Numerous shipping companies persist in avoiding transits through the Red Sea due to escalating attacks by Houthi rebels on commercial vessels in the area. Instead, many of these ships have been opting for the longer route around Africa, bypassing the shorter Suez Canal route. This alteration in shipping routes is gradually affecting the demand for bunker fuel in Fujairah.
Despite a slight decrease in demand, prompt availability remains tight in Fujairah due to ongoing weather-related disruptions, which have caused bunker backlogs. Suppliers suggest lead times of 7-10 days, though some can still provide quick deliveries. Similar supply constraints are noticed in the UAE port of Khor Fakkan, with most suppliers recommending lead times of 7-10 days.
However, in the Saudi Arabian port of Jeddah, both VLSFO and LSMGO are readily available. Conversely, some suppliers in Djibouti are running out of VLSFO supply, while can still supply LSMGO.
Meanwhile, Omani ports of Sohar, Salalah, Muscat, and Duqm have sufficient supply of LSMGO, with prompt delivery dates available.
By Tuhin Roy
Photo credit and source: ENGINE
Published: 6 March 2024