Singapore
VLSFO availability has tightened in Singapore. Barge loading delays at fuel terminals have held back bunker deliveries and put pressure on schedules, a source says. Lead times of 9-11 days are now advised for good coverage from suppliers, up from 8-10 days last week.
A recent influx of fuel oil imports from Russia, the UAE and Malaysia has increased Singapore’s net import surplus to 5 million bbls this month, and boosted stocks some. But as with middle distillates, Singapore fuel oil inventories remain far below their five-year average position.
Singapore’s biofuel bunker suppliers have been restricted to delivering biofuel blends with more than 25% biofuel. The standard grade in the port has been B24 (24% biofuel) as suppliers want to leave a margin for error when they load their bunker tankers with blended biofuels.
Vitol is looking to shake up the B24 market by bringing chemical tankers into its fleet, which will allow it to supply biofuel bunker blends up to B100 (100%) in Singapore. It expects to take delivery of the first of these vessels in January, with more to follow later next year.
China and South Korea
Meanwhile, the B24 norm has spread to Hong Kong, where Banle Energy was first out of the blocks by delivering a B24 biofuel blend to a tanker in July. Chimbusco Pan Nation and Helmsman Supply followed suit by offering blends of up to B24 in Hong Kong a few weeks later.
Sinobunker in Guangzhou then sourced a cargo from Hong Kong to launch biofuel bunkering. And this followed hard on the heels of Zhejiang Seaport International Trading becoming the first supplier to offer biofuels in mainland China.
Biofuel bunker demand has since been tepid in China, according to sources. Suppliers are keen to lock in term contract volumes to do away with some of the uncertainty of bringing in cargoes. A liquid spot market has failed to materialise in Chinese ports just yet. But they could – like several other global ports for ocean-going ships – see an uptick in demand if vessels trading in and out of Europe from next year, when the EU’s Emission Trading System (EU ETS) starts getting phased in. The ETS will make it more expensive to burn carbon-heavy conventional marine fuels and more attractive to blend in some biofuel.
For now, however, China’s biofuel bunker market is nascent, and at least two weeks of lead time is needed to supply bio-blended stems in Guangzhou, a source says. Prices are not indicated, only given as firm offers.
Back to conventional bunker fuels, Zhoushan has seen improved weather conditions since operations were halted at the end of last week. 3-5 days of lead time is recommended for bunker stems, while some suppliers can offer smaller VLSFO quantities – typically below 500 mt – on prompter dates.
VLSFO is still particularly tight in South Korean ports, where as much as 9-14 days of lead time is advised.
Middle East
Around 4-5 days of lead time is advised for all grades in Fujairah. This is normal and there have not been any major supply disruptions of note, according to a source. Fujairah’s VLSFO grade has been priced at discounts to Singapore and Zhoushan for the most part of the past month.
VLSFO supply has run out in Oman’s Duqm, where a supplier is working on a resupply cargo and no definite earliest delivery date has been given.
Source: Engine, https://engine.online/news