Feature: The bunker market volume in Singapore remains resilient despite obstacles

Highlights

‘Standing Inquiries’ in June

Barging spreads under pressure

MFMs, other practices hold Singapore well

Singapore’s largest bunker port in the world has demonstrated its resilience in challenging market conditions, largely due to the global coronavirus pandemic, with bunker sales increasing year over year in May, industry sources S&P Global Platts said.

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Still, some challenges remain and cautious optimism reigns in the city port as COVID-19-related shipping restrictions and weak bunker margins continue to weigh, while supply chain blockages in some Chinese ports have not resulted in a significant port switch to Singapore, you said.

Total shipments of marine fuel in Singapore increased by 3.7% year-on-year to 4.07 million.

“The tepid demand for spot inquiries in the second half of May definitely contributed to the lackluster bunker sales of 380 CST HSFO and marine fuel 0.5% S,” said a Singapore-based dealer.

The retailer added that spot demand on June 1 was “slow” despite a “steady stream of inquiries”.

HSFO, LSFO demand

High sulfur bunker fuel sales, which include 180 CST, 380 CST, and 500 CST bunker fuel, fell 9.7% month-over-month but rose 25.4% in May to 984,600 tons in May, the MPA data showed.

A source said buyers increasing contracted volumes would still meet basic demand for about 1 million tons of HSFO in June, while a Singapore-based bunker supplier forecast that 380 CST bunker sales in the port alone would “at least 900,000 tons to 1 “Could reach millions of mt” a month.

In the case of low-sulfur bunkers, a shipowner said the low barging spreads in Singapore had put pressure on shipowners to cover operating costs.

The premium of Singapore-supplied marine fuel 0.5% S versus FOB Singapore cargo of the same quality fell to $ 4.16 / mt on June 14, below the average of US $ 4.98 / mt a week earlier, Platts data showed .

The barging spread – the difference between quay and delivered – for the same salary in Singapore was $ 2.41 / mt, up from an average of 33 cents / mt for the week ended June 11th. Platts data showed, but still well below market expectations of $ 8-9 / mt.

Overcoming difficulties

Some industry sources said the recent Yantian-related delivery delays did not benefit the Singapore bunker market very much as ships refueled at other Chinese ports instead of moving to Singapore for bunker calls.

Yantian continues to be hit by severe congestion, with many global container shipping companies choosing to skip calls there and unload import containers in other ports such as Hong Kong.

Sources noted that favorable pricing policies in some Chinese ports have also recently attracted shipowners.

“Zhoushan has definitely attracted some demand as it has remained competitive across the board,” said one shipowner.

Compared to the shipping fuel 0.5% S in Singapore, Platts data showed that Zhoushan’s discount on salary averaged $ 3.83 / mt in May, down to a multi-month low of $ 15.25 / mt on May 25 sank.

Meanwhile, COVID-19-related curbs have also added to the complexity of bunker operations at several ports, including Singapore, sources said.

The MPA said in a May 28 circular that ship owners, agents and captains must ensure that all operations – cargo operations, bunkering, ship stores and supplies, and other marine services – are contactless or contactless with separation protocols.

This comes after Singapore placed additional requirements on ships arriving from countries with a sustained surge in COVID-19 cases. These included Bangladesh, India, Pakistan and Sri Lanka.

However, sources agreed that Singapore’s strategic location, strong port and bunker infrastructure, and strict enforcement rules kept it in good shape.

An industry source said that the mass flow measurement system in Singapore is particularly beneficial in a non-contact environment as the process is largely “well controlled” even without a bunker meter.

Mass flow meters have been required for all ship heating oil deliveries from January 1, 2017 and for all distillate bunker deliveries from July 1, 2019 in the port of Singapore to increase the integrity of the bunker operations.

The city port introduced two new bunker standards in 2020 – the SS 60 Code of Practice for bunker delivery from the oil terminal to the bunker tanker with MFM and TR 80 and meter verification with MFM – which have further improved transparency, industry sources said.


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