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 July 2022
VLSFO supply has been acutely tight for weeks in Singapore’s bunker market, with high price premiums quoted for prompt delivery dates. Prompt stems have typically been priced $30-50/mt higher than for dates further out, sources say.
Tight VLSFO supply has contributed to widen Singapore’s Hi5 spread to all-time highs of more than $570/mt this week.
Suppliers’ earliest delivery dates vary from 14-17 days out for VLSFO, while their earliest dates for HSFO are slightly shorter at 10-13 days, and much shorter for LSMGO at 5-7 days.
Sources in Singapore’s bunker market point to a lack of incoming VLSFO cargo flows as a reason for the grade being tight. VLSFO supply is set to remain tight through July, one says. Fuel oil inflows in July will “at best” be similar to June, and once it has arrived in Singapore, much of this product will still need to be blended into VLSFO, so any supply relief will not be imminent.
Suppliers in Hong Kong have been working to clear a bunker backlog this week, while suppliers in Zhoushan face around three days of weather disruptions.
Typhoon Chaba swept across Hong Kong with strong winds and rains on Friday, before making landfall in south China. Bunkering was suspended in several ports in the region, including Hong Kong and Guangzhou, but had resumed by Monday.
Massive delays are expected to put pressure on bunker supply capacity in Hong Kong until at least Wednesday, a source said. VLSFO and LSMGO supply had improved in Hong Kong with replenishment cargoes arriving last week, but prompt availability has tightened somewhat as suppliers work through backlogs.
There are no significant backlogs in Guangzhou, but a supplier is running low on VLSFO and only expects to the resupplied in mid-July, keeping availability tight, a source said.
Suppliers in Zhoushan have been bracing for gale and bunker disruptions from Tuesday until Thursday evening. A lull with less wind on Thursday morning could provide a relief and allow for more bunkering.
VLSFO is tight in Zhoushan and recommended lead times can vary greatly between suppliers, ranging from 7-12 days.
Prompt supply is tight across grades in South Korea, but lead times for fuel oil grades are shorter than in Singapore and Zhoushan. Recommended lead times are around 5-6 days for all grades in both western ports like Incheon and southern ports like Busan.
Recommended lead times have grown longer in Fujairah this week. Around 10 days is now advised for VLSFO and LSMGO, and eight days for HSFO. Maintenance work at a local refinery has capped production and limited some volumes from streaming to the bunker market recently. Availability could improve as the refinery has come back online and ramps up production.
The port’s heavy distillate and residual fuel oil stocks rose 8% and to multi-week highs last week, but still averaged lower across June than in May, according to Fujairah Oil Industry Zone and S&P Global data.
Photo credit and source: ENGINE
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