Japan marine fuel 0.5% differentials slumps to 10-month low as demand destruction persists
16th June 2020 19:19 GMT

The delivered Tokyo Bay marine fuel 0.5% differential to Singapore 10 ppm gasoil cargo assessments plunged to a 10-month low of minus $60.14/mt on June 15, S&P Global Platts data showed as demand destruction from the COVID-19 outbreak continued to take its toll on the market.

The differential was last lower at minus $67.86/mt on August 15, 2019, Platts data showed.

"Demand is even worse than last month; and last month was a bad month," a trader said.

Traders in Japan are struggling to sell their contracted volumes for this month. Bunker traders in Japan take a fixed volume of marine fuel every month as per contract agreements with refineries.

"When demand is normal, everything is good, but when demand drops, traders lower prices in a bid to move volumes," the trader said.

Japanese refiners had cut run rates in response to weak demand, but supply continues to exceed demand volumes.

"We had already agreed on [taking] less volumes for June as compared to normal, but demand is very small," another trader said.

Japan marine fuel 0.5% prices dropped to the lowest in the region. Delivered Tokyo Bay marine fuel 0.5% was assessed at $276/mt on June 15, compared to $308/mt in Shanghai and $316/mt in South Korea.

"We haven't seen volumes divert to Japan but hopefully that will happen," the second trader said.


Bunkerworld .,
16th June 2020 19:19 GMT

Post your Comments on this Blog

Please sign in by clicking here to post comments.

Not registered? Click here and register for FREE.