Bunker sales in Panama climbed for the second consecutive month in August, after a steep fall in June, with high sulfur IFO 380 fuel showing the strongest increase.

Sales of bunkers -- including IFO 380, marine fuel 0.5%S and marine gasoil -- totaled 369,839 mt in August, up 9.73% from July but still 23% under January’s 477,339 mt volume, data from Panama Maritime Authority showed.

By segment, sales of marine fuel with up to 0.5% sulfur content increased only 3.69% in August month on month to 267,974 mt, after rising 13.07% in July, according to the data.

The latest increase was small but helped continue the steady recovery after 0.5%S fuel sales fell 25.20% in June, when they totaled 228,563 mt, their lowest level of the year.

Marine fuel 0.5%S, called very low sulfur fuel oil or VLSFO, became the most used bunker fuel globally in January when the new rules from the International Maritime Organization for maximum sulfur content in maritime fuels took effect.

VLSFO started the year in Panama with strong 388,307 mt in sales in January, but as with all oil markets, the fuel was hit by retreating demand caused by the global effects of the coronavirus pandemic.

S&P Global Platts assessed VLSFO at the port of Balboa at $311/mt Sept. 15, down from an average of $323.71/mt in August.

High sulfur bunkers keep gaining ground

In the first month of the year, VLSFO comprised 78.94% of the bunker market in Panama. By August, however, that representation declined to 72.46%.

The segment showing a consistent growth in sales during the year has been high sulfur IFO 380, which after accounting for 8.05% of the market in January doubled its presence to 16.02% last month.

IFO 380, with a sulfur content of up to 3.5%, is no longer used as a marine fuel following the new IMO rules, except in ships adapted with scrubbers.

The third biggest bunker segment, marine gasoil, which includes low sulfur marine gasoil, has showed more stable sales, comprising 11.52% in August compared with 13.01% in January.

In August, sales of high sulfur IFO 380 climbed a solid 40.95% month on month to 59,251 mt, after increasing 13.07% in July.

“There was a big increase in high sulfur fuel oil sales. It grabbed my attention because I haven’t seen so much demand in the market,” a market source said.

Market sources said only two companies now sell IFO 380 in Balboa, while in other ports in Latin America the high sulfur fuel is not available anymore.

IFO 380 in Balboa was valued Sept. 15 at $279/mt, compared with an average of $304.62/mt in August.

The premium of VLSFO over IFO 380 reduced to an average of $19/mt in August from $291/mt in January. It now has widened again but only to an average of $34/mt so far in September.

In the marine gasoil segment, sales in August increased to 42,614 mt, up 16.53% from the previous month, after staying almost stable in July.

MGO in Balboa was assessed at $363/mt Sept. 15, down from an average of $396/mt in August.

The numbers of ships serviced on both sides of the Panama Canal rose to 505 in August from 473 in July. The average of operating barges during the year has been 36.

In Panama, most of the barging operations is done on the Pacific coast, where the port of Balboa is located. Bunker sales on the Pacific totaled 303,760 mt in August.

On the Atlantic Coast, where the port of Cristobal is located, sales totaled 66,079 mt.