Asia residual fuel: Key market indicators this week March 1-5
1st March 2021 08:49 GMT

Higher arbitrage volumes of low sulfur fuel oil cargo arriving in Singapore in March underpinned recent trading sentiment, although the Singapore delivered bunker market is still expected to see an initial period of tightness, as most arrivals are scheduled in the latter hald of the month.

In the high sulfur bunker fuel market, the relative stability in the Singapore market in the first half of March is contrasted by the tight supply situation in Japan due to lower run rates there.

Marine Fuel 0.5% Sulfur

** The Singapore Marine Fuel 0.5%S March/April backwardation March 1 opened stable at $3.50/mt from the Feb. 26 assessment, with bids seen at $3.25/mt against offers at $5.50/mt, Intercontinental Exchange and brokers' data showed.

** Low sulfur fuel oil stocks are due to be replenished in March amid an increase in the arrival of arbitrage cargoes into SIngapore, estimated to be in excess of 3 million mt, according to traders surveyed by Platts, compared to 2.3-2.4 million mt in February.

** However, availability of finished grade material in the prompt period is expected to be thin, said bunker suppliers.

** Meanwhile demand was also likely to hinge on the direction that the flat price was likely to take in the ensuing days, traders added.

** In North Asia, traders expect the marine fuel 0.5%S supply in Japan to remain tight at least until the end of the first half of March, as loading schedules are not fully available.

** ENEOS is due to close some bunker berths at Chiba and Negishi refineries in March due to maintenance, a company source said. In west Japan, barge availability is tighter than Tokyo Bay due to rough weather conditions, a bunker trader said.

** Shanghai and Zhoushan marine fuel 0.5%S prices were bearish in the last week of February due to strong selling pressure toward the month-end as bunker suppliers sought to achieve sales targets. The selling pressure, however, is expected to taper off in the new month as new targets kick in, traders said.

High Sulfur Fuel Oil

** According to brokers' indications and ICE data, morning discussions for the Singapore high sulfur fuel oil viscosity spread for April opened March 1 at $5.50/mt, higher than the Feb. 26 assessment of $5.25/mt.

** On the Singapore front, the delivered market is likely to trade in a narrow range in the near term due to a lack of impetus by way of any forthcoming incremental demand, especially in the upstream cargo market, that could potentially lift sentiment in the downstream market.

** The premium for Singapore-delivered 380 CST bunker over FOB Singapore 380 CST HSFO has in the recent past too, traded in a narrow range, inching lower after touching a year-to-date high of $16.54/mt on Feb. 11 to be assessed at $15.40/mt at the Asian close on Feb. 26.

** In North Asia, Japan's high sulfur bunker supply is also expected to remain tight, even though power companies are no longer buying high sulfur fuel oil.

** Refiners are operating their refineries at reduced rates, which has resulted in lower production of high sulfur bunker fuel, a refining source said.

** South Korea's 380 CST bunker fuel price has been the lowest since Feb. 19 due to ample supply, coupled with weak demand. The biggest high sulfur bunker supplier GS Caltex is likely to supply similar volume of high sulfur bunker fuel in March compared to February, a company source said.

Bunkerworld .,
1st March 2021 08:49 GMT