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ENGINE: East of Suez Bunker Fuel Availability Outlook

13 Jul 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:

12 July 2022

  • Availability improves in Zhoushan
  • India’s windfall tax on gasoil to drive LSMGO prices higher
  • Prompt VLSFO and LSMGO deliveries in Fujairah remain tight

 

Singapore

VLSFO supply has been persistently tight in Singapore’s bunker market for weeks, with high price premiums incurred for prompt delivery dates. Prompt stems have typically been priced $40-50/mt higher than for dates further out, while premiums can go as high up to $100/mt, sources say.

The port’s Hi5 spread is at $550/mt and still lingering around all-time highs amid tight VLSFO supply.

Recommended lead times are around 12-15 days for VLSFO and 10-13 days for HSFO, while LSMGO lead times are shorter at 6-9 days.

 

East Asia

Weather conditions in Zhoushan are calmer this week, allowing suppliers to clear backlogs from previous weather-triggered suspensions. VLSFO availability has improved slightly in the Chinese port, and some suppliers can offer limited quantities for prompt dates, sources say.

Recommended lead times in Zhoushan for VLSFO are around six days, down from at least seven days last week. LSMGO remains readily available.

VLSFO availability is tight in Shanghai as a supplier is almost out of stock, adding pressure on others’ supply.

Availability is normal across all grades in Hong Kong after some suppliers received replenishment stocks last week. Recommended lead times for VLSFO and LSMGO are around 4-5 days. Some suppliers can offer HSFO for prompt dates in Hong Kong. HSFO is typically rare to find for prompt dates as the grade is only available with certain suppliers, sources say.

VLSFO availability is normal in Indonesia’s Jakarta and Surabaya. Recommended lead times are around 3-5 days.

 

South Asia

The Indian government has announced a windfall tax of up to 18% on gasoil at the refinery level. The tax is expected to drive LSMGO prices higher and possibly weaken bunker demand.

Mundra on the northwest coast, is not expected to be directly impacted as the port only offers fuel oil grades. Meanwhile, in Visakhapatnam on the east coast, the tax is expected to push higher LSMGO price by around $250/mt, a source says.

Availability of VLSFO and LSMGO is normal in Mumbai.

In Sri Lanka’s Colombo, prompt VLSFO and LSMGO stems are available with some suppliers. Recommended lead times are around 4-5 days.

 

Middle East

All fuel grades are in tight availability for prompt dates in Fujairah. VLSFO and LSMGO prompt deliveries are more difficult to find. A local refinery in Fujairah has been undergoing maintenance work in recent weeks. Production levels have yet to return to normal, sources say.

Recommended lead times for VLSFO and LSMGO are around 10-12 days, while HSFO has a shorter lead time of eight days.

LSMGO and VLSFO availability are normal in Iraq’s Basra. A supplier can offer delivery on prompt dates, sources say.

 

Photo credit and source: ENGINE
Published: 13 July, 2022

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