Singapore 180 CST HSFO to firm in the near term on uptick in regional demand: traders
10th March 2021 08:58 GMT

Singapore 180 CST high sulfur fuel oil, which is predominantly used as a burning fuel, is likely to firm up in the near term due to an uptick in demand from several Asian utility companies, traders said.

"Now that temperatures are rising in some places, we're seeing an increase in demand from utility companies, and I think the prices are reacting to that," a Singapore-based trader said.

The Singapore 180 CST HSFO over the Mean of Platts Singapore 180 CST HSFO assessments had risen to a one-month high of $1.58/mt at the Asian close on March 9, reflecting the near-term demand outlook.

"There's been an increase [in demand] from the power generation sector, especially from Bangladesh," a Singapore-based fuel oil trader said.

Even though the incremental demand from Bangladesh is not significant, these volumes are likely to be maintained over the next six months, or so, when temperatures are warmest, he added.

According to the president of the Bangladesh Independent Power Producers' Association, Imran Karim, the country is likely to import around 350,000 mt of HSFO in March, up from 300,000 mt in February, as rising temperatures boosts power demand.

Sri Lanka, yet another importer of the lower viscosity utility grade fuel, has stepped up its purchases ahead of the 45-day planned maintenance for its 50,000 b/d Sapugaskanda refinery, which is expected to end on April 3, a Colombo-based source at the refinery said.

Sri Lanka's Ceylon Petroleum Corporation has secured 90,000 mt of 180 CST HSFO in three 30,000 mt cargoes for March delivery. This is up from the usual one cargo that the state-owned company typically imports.

Meanwhile, even as the increase in volumes sought by Bangladesh were not entirely unexpected, what remains to be seen is how demand from Pakistan picks up, traders said.

"Usually Pakistan's spot purchases tend to be more ad-hoc, and they also buy significant LNG volumes, so I think those volumes may have more of an impact on the price," a Fujairah-based trader said.

Pakistan State Oil is currently looking to buy, via tender, two 65,000 mt 180 CST HSFO cargoes for delivery over May, a company source said. The state-owned company had previously shelved plans to buy via tender up to 195,000 mt of a similar product for delivery over H2 January.

Bunkerworld ,
10th March 2021 08:58 GMT