Lower demand for VLSFO coupled with higher imports of the grade have contributed to weaken VLSFO’s premiums in Singapore.

A source says that VLSFO market remains under pressure due to sluggish bunker demand amid increasing supply. More VLSFO has been imported by suppliers and bunker traders in Singapore, with imports increasing by 43,000 b/d from June to 504,000 b/d in July, according to cargo tracker Vortexa.

VLSFO imports from Brazil – typically its top import source – have nearly doubled from June to 143,000 b/d in July. This increase in supply has hurt VLSFO premiums in Singapore. Its VLSFO price has declined by around $35/mt from the highs it reached last month, to $584/mt now.

While there seems to be ample supply of VLSFO, prompt availability remains under pressure and lead times of 9-12 are still recommended for bunker deliveries in the East Asian bunker hub – slightly up from last week.

Two tankers carrying large 857,000-bbl and 621,000-bbl VLSFO cargoes are scheduled to arrive in Singapore from the Netherlands and Brazil, respectively, by mid-August, Vortexa data shows. These cargoes should boost availability and possibly add downward price pressure.

On the other hand, strong bunker demand for HSFO and some suppliers running low on the grade have contributed to tighten its market. Some suppliers are advising lead times of almost two weeks for HSFO, a source says. This has also strengthened HSFO premiums in Singapore.

This has also contributed to drag Singapore’s Hi5 spread down to just $70/mt, from around $166/mt in June.
Source: ENGINE by Tuhin Roy, https://engine.online/news/availability/weak-demand-and-higher-imports-weaken-singapores-vlsfo-4e3a