The recent launch of bunker price assessments for the Singapore market is the first of three business developmental phases Argus Media has planned for the republic’s maritime and oil industry, says its Business Development – Asia.
“We view this as a multi stage project. The first phase is raising awareness in the market and getting people to submit bunker pricing and trade data to Argus,” Alan Bannister told Manifold Times in an exclusive interview.
“Phase two, to be carried out in the next three to four months, is to have companies using Argus’ bunker assessment as the reference price in term deals; particularly the container lines which will often sign contracts three to six months ahead on a floating price basis and will need a pricing index for reference.
“The last phase, to be executed by end of the year, is to help clients who have physical exposure tap into the paper derivatives market in order to hedge that exposure.”
Bannister notes Argus, which collects reported trade data of bunker ‘done deals’, recorded 10,470 metric tonnes (mt) of marine fuel transactions on its first day of Singapore bunker price assessment operations on Monday.
Using an example of 4 million mt of marine fuel sold at Singapore in a 31-day month (130,000 mt per day), he believes it is only a short matter of time before Argus is able to record a 25% share (32,500 mt) of total marine fuel transactions carried out at Singapore port – to establish itself as an industry benchmark.
“Being based at the world’s bunkering hub gives us access to a rich amount of data,” explains Bannister.
“Market participants recognise accurate and trusted price assessments are crucial tools for the industry to use in physical term contracts, to measure one’s bunker purchase and sales performance against one’s peers and as a reliable basis for paper derivative settlements.
“Also, companies who submit trade data get free access to the resulting assessments.
“We forecast that we will be able to record 25,000 mt of marine fuel transactions daily by the end of July, and certainly hit the 25% milestone before end of the year.”
The Argus bunker assessment covers Fuel Oil (3.5% 380 cst) and Marine Gasoil (MGO and LSMGO) grades that take trade information reported by 7pm (Singapore time); delivery is between 4-12 days from the trade date and quantity of 500-3000mt for 380cst HSFO and 50-500mt for MGO and LSMGO).
Published: 22 June, 2018
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