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ENGINE: East of Suez Bunker Fuel Availability Outlook

Wednesday, 12 June 2024 | 00:00

Singapore and Malaysia

Bunker demand has been relatively quiet in Singapore this week. Lead times for VLSFO have fluctuated lately, with most suppliers now indicating up to 11 days. However, some suppliers can accommodate stems in as little as two days. This marks an improvement compared to the previous week, when traders suggested lead times ranging between 4-14 days.
HSFO supply remains limited in the port, with recommended lead times of 10-13 days – virtually unchanged from last week. For LSMGO, lead times vary between 2-8 days.

According to Enterprise Singapore’s latest data, Singapore’s residual fuel oil stocks have averaged 4% higher so far in June than in May. There has been a notable 75% decline in weekly average net fuel oil imports in June compared to May, with imports falling by a massive 2.96 million bbls in the first week, while fuel oil exports have decreased by a modest 28,000 bbls. The port’s middle distillate stocks have averaged 1% higher this month.

In Malaysia’s Port Klang, both VLSFO and LSMGO grades are in ample supply. Some suppliers can provide prompt deliveries for smaller parcel sizes. HSFO availability remains constrained due to limited product availability.

East Asia

VLSFO and LSMGO supply in Zhoushan remains robust, with most suppliers recommending lead times of 3-5 days, which is unchanged from last week. HSFO availability has also seen a slight improvement, with lead times decreasing from around 14 days last week to 7-10 days currently.

In Northern China, both VLSFO and LSMGO grades are available at Dalian port. Similarly, these grades are readily available in Qingdao and Tianjin, although HSFO supply is limited in these ports. In Shanghai, VLSFO and LSMGO availability remains good, while HSFO supply is scarce. In Fuzhou and Xiamen, VLSFO and LSMGO grades are readily available. Conversely, in Guangzhou and Yangpu, prompt availability of both low sulphur fuel grades remains restricted.

In the Taiwanese ports of Hualien, Kaohsiung, Taichung and Keelung, both VLSFO and LSMGO remain readily available, with suggested lead times of 2-3 days, which is consistent with last week.

Overall, all grades are well supplied in Hong Kong, with recommended lead times of around seven days. Adverse weather conditions are forecast in Hong Kong between Friday and Saturday, potentially affecting bunker operations.

In South Korean ports, bunker demand continues to be subdued due to higher bunker prices. On Tuesday, Busan’s VLSFO grade was priced $11/mt higher than Singapore’s and $21/mt higher than Zhoushan’s VLSFO.

VLSFO availability has improved in South Korea’s western ports, with lead times decreasing significantly from 14 days last week to around three days this week. LSMGO and HSFO now require approximately three days, which is consistent with last week.

VLSFO availability remains tight in southern South Korean ports, with most suppliers recommending lead times of around 9-12 days, almost unchanged from last week. LSMGO and HSFO availability has tightened, with lead times of 9-14 days advised, significantly up from three days.

Additionally, bunker operations in the South Korean ports of Busan and Yeosu may experience intermittent disruptions between Friday and Sunday due to anticipated high waves.
In Japan, VLSFO availability remains constrained in Tokyo, although some suppliers can still provide prompt stems. Technical issues reported at some refineries may result in restrictions on VLSFO supply in mid-June, potentially affecting availability and leading to increased lead times in Tokyo, according to a source.

Various lead times are recommended across key Japanese ports, with approximately two days in Chiba, around eight days in Osaka, Kobe, Nagoya and Yokkaichi, and longer periods of 12 days in Mizushima and Oita.

Oceania

In Western Australia, suppliers in the ports of Kwinana, Fremantle and Kembla can provide VLSFO and LSMGO, typically with lead times ranging from 7-8 days. In New South Wales, LSMGO is readily available in Sydney, while HSFO supply is mostly available upon inquiry.

In Victoria, Melbourne offers good availability of both VLSFO and LSMGO, with ample VLSFO supply also found in Geelong. However, prompt HSFO supply can be limited in both Victorian ports. In Queensland, suppliers in Brisbane and Gladstone maintain sufficient stocks of VLSFO and LSMGO, with lead times of 7-8 days. HSFO availability remains constrained in Brisbane.

In New Zealand, VLSFO supply in Tauranga and Auckland is ample, and LSMGO supply remains decent in Auckland. However, anticipated adverse weather conditions in Tauranga between Thursday and Saturday may impact bunker operations.

South Asia

In several Indian ports, including Mumbai, Kandla, Tuticorin, Chennai, Cochin, Visakhapatnam and Haldia, VLSFO and LSMGO availability has been restricted due to supply shortages. One supplier in Paradip is nearly out of VLSFO and LSMGO stocks.

Adverse weather conditions are intermittently predicted throughout the week in Sikka, Kandla and Visakhapatnam ports in India, potentially disrupting bunker operations.

Middle East

In the UAE ports of Fujairah and Khor Fakkan, prompt availability of all grades remains limited, with most suppliers requiring lead times of 5-7 days.

In Saudi Arabia’s Jeddah port, there is abundant supply of VLSFO and LSMGO, while VLSFO supply is tight in nearby Djibouti. LSMGO supply is more readily available in Djibouti.

In Iraq’s Basrah, VLSFO and LSMGO are readily available, while both grades are tight in Ras Laffan in Qatar.

LSMGO is readily available in the Omani ports of Sohar, Salalah, Muscat and Duqm.
Source: ENGINE, By Tuhin Roy, https://engine.online/news

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