Hong Kong's marine fuel 0.5%S differential hits 2-month low as 14-day quarantine diverts demand
12th August 2020 08:32 GMT

A 14-day quarantine rule for cargo ships imposed at Hong Kong's port has dragged down premiums for the key low sulfur marine fuel 0.5%S grade to a two-month low as bunker-only calls divert to other ports, market sources said Aug. 12.

The Hong Kong delivered marine fuel 0.5%S differential to the benchmark FOB Singapore 10 ppm gasoil cargo assessment has narrowed $9.46/mt or 41.74% since Aug. 3 to stand at minus $32.13/mt Aug. 11, S&P Global Platts data showed. It was last lower at minus $35.35/mt on June 17, according to Platts data.

"Demand has dropped by at least 40% in August," one supplier said.

Hong Kong has required crew members of cargo ships calling at Hong Kong port for purposes other than loading or discharging cargoes to complete 14 days' quarantine since July 29

Oil majors and suppliers have since strived to move MF 0.5%S cargoes stored in tanks, lowering prices in a bid to sell down stocks, market sources said.

"Some suppliers did not buy any cargoes at all this month and have laid up their barges," a trader said.

The port now mostly sees container ships that have cargo operations in Hong Kong, while vessels that previously came for bunker-only calls have diverted to neighboring ports in August, market sources said.

Premiums are expected to remain on a downward trajectory as the government is not expected to lift the quarantine restriction anytime soon.

"At this juncture it is unlikely [it will be lifted] unless the number of [COVID-19] cases drops to nil," the trader said.

Bunkerworld .,
12th August 2020 08:32 GMT