The first 0.5%S marine fuel paper instrument was seen in the Platts Market on Close process Dec. 7, 11 months since the implementation of the International Maritime Organisations sulfur cap which came into play on Jan. 1, 2020.

Litasco offered the 0.5%S FOB Rotterdam barge swap for Jan. 21, which was left outstanding at $351/mt for 5,000 mt at the close.

This marks the first paper indication in the Platts MOC, since the sulfur cap came in to ruling Jan. 1, which saw the cap narrow from 3.5%S to 0.5%S.

Since then, the 0.5%S FOB Rotterdam physical barge market has steadily picked up liquidity in the Platts physical MOC, with some 38,000 mt trading in January rising to 160,000 mt in November.

The market has typically priced physical marine fuel barges and cargoes over the counter versus low sulfur gasoil futures, but with different underlying fundamentals and significant volatility in the gasoil market, market players started to look towards 0.5%S marine fuel derivative contracts.