April’s 10.8% on year rise of bunker sales at Singapore port was a surprise to many, who expected the month’s volume at the republic to fall due to lower international trades and the Coronavirus Disease 2019 (COVID-19) pandemic.
Singapore bunkering publication Manifold Times took to the occasion and approached local marine fuel consultancies Azure Strategic Resources and SDE International to shed light about the development.
Dennis Ho, Director & Founder of Azure Strategic Resources, explained Singapore’s total bunker volume in April 2019 was firstly at a low of 3.7 million mt – a low base when compared to the 4.1 million mt of bunker sales at Singapore in April 2020, which is largely in line with the average monthly volume of 4 million mt within the past two years.
“Quite a fair amount of supplies was fixed on a contract basis prior to the start of IMO 2020 implementation on 1 January. It is possible that these contracts are still being fulfilled,” he adds.
“The Singapore increase in volume may also come at the expense of other smaller ports where supply of 0.5% sulphur compliant fuel may not be reliable. In fact, other major ports like Rotterdam and Zhoushan have been reporting healthy demand.
“Traders and buyers which I talked to commented their April demand was largely unchanged and in fact saw a pick up towards end April. This is likely due to the steep correction in prices following the negative crude oil price seen on 19 April.
“The same traders and buyers commented May looking to be a slow month. A buyer expects he may only be able to fulfil the lower end of his buying commitment.”
Simon Neo, Executive Director at marine fuels consultancy SDE International, notes current market conditions have resulted in prices of bunker fuel at Singapore port being lower when compared to the similar period a year before.
The total number of vessel arrivals at Singapore port was 7,015 in April 2020 (37.6% lower on year) while container and cargo throughput both respectively fell 5% and 12.6% on year, according to Maritime and Port Authority of Singapore (MPA) data.
“The drop in the number of vessel arrivals, container and cargo throughput clearly shows trade volume to be down,” said Neo.
“However, the increase in bunker volume is more due to the fact that oil prices are very low now. This generates more buying interest as nobody knows when for sure, how long this low oil price will last.
“Instead of topping up 500 or 600 mt, ship owners may now be incentivised take up to 1,000 mt or 1,500 mt.
“The other factor of what Dennis said is quite true, as a lot of ship owners have entered into pre-signed contracts before IMO 2020 due to worries about the availability and quality of VLSFO around the region.
“Singapore is the premier bunkering port which is very well regulated, and supported by a highly respected bunkering standard backed by the use of mass flowmeters for the custody transfer of marine fuel.
“This encourages more ship owners to take up products in Singapore as there is accountability involved and they will all know who to approach if anything goes wrong.”
Singapore’s bunker fuel sales volume was release by MPA on Wednesday (13 May).
A total 4.11 million metric tonnes (mt) (exact: 4,113,700 mt) of bunkers was sold at the port in April, 10.8% more than 3.71 million mt (exact: 3,712,100 mt) posted during April 2019.
Deliveries of 500 centistokes (cSt), 380 cSt and 180 cSt grades in April 2020 (against on year), were respectively 78,400 mt (-88.7% from 691,900 mt), 692,800 mt (-73.5% from 2.61 million mt), while 180 cSt product recorded no sales (-100% from 24,000 mt).
Low sulphur 500 cSt, 380 cSt and 180 cSt products respectively recorded no sales (similarly compared to zero sales in 2019), 2.15 million mt (significantly up from 16,400 mt), and 111,100 mt (+194.7% from 37,700 mt).
The latest data introduced new categories, namely low sulphur 100 cSt, and ULSFO respectively recorded 597,800 mt and 66,700 mt of sales in April.
Low sulphur marine gas oil (LS MGO) sales were posted at 372,600 mt (+89.5% from 196,600 mt) and MGO at 48,400 mt (-31.9% from 71,100 mt).
Related: Singapore: March 2020 bunker fuel sales rise 5.7% on year
Related: Singapore: February 2020 bunker sales volume up 2.5% on year
Related: Singapore: January 2020 bunker sales volume up 7.5% on year
Photo credit: Manifold Times
Published: 14 May, 2020
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