Singapore — Traders expect the recent bullishness in the Singapore 180 CST high sulfur fuel oil market to be maintained over much of first-half November on the back of South Asian demand for the power generation HSFO grade over the fourth quarter.
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MARINE FUEL 0.5% SULFUR
- The Singapore Marine Fuel 0.5% November-December timespread was steady early Oct. 19 at $1.50/mt from the Oct. 16 assessment, brokers' indications showed.
- Demand for low sulfur bunker fuel in Singapore is expected to remain largely stable, despite the near parity with low sulfur marine gasoil prices as substitution is expected to be capped by the availability of marine gasoil barges. The Singapore-delivered Marine Fuel 0.5%S bunker premium to Singapore Marine Fuel 0.5%S cargo dipped $1.67/mt to $14.88/mt on Oct. 16 from $16.55/mt on Oct. 9, Platts data showed.
- In the North Asian market, traders in Japan shrugged aside the impact of cuts in LSFO production among refiners as demand is expected to weaken. The Tokyo Bay delivered marine fuel 0.5%S differential to FOB Singapore 10 ppm sulfur gasoil cargo assessments dropped $4.47/mt week on week to minus $21.72/mt on Oct. 16, Platts data showed.
- High cargo costs are expected to keep the China bunker fuel premiums elevated going forward despite domestic refiners ramping up production of fuel oil for bonded bunkering, as prices are still pegged to Singapore cargo assessments. The Shanghai delivered marine fuel 0.5%S differential to FOB Singapore 10 ppm sulfur gasoil cargo assessments rose $9.09/mt week on week to $11.85/mt on Oct. 16, Platts data showed.
HIGH SULFUR FUEL OIL
- According to brokers' indications and ICE data, the Singapore 380 CST high sulfur fuel oil November-December timespread was pegged lower at $2.75/mt compared with the Oct. 16 assessment of $3/mt.
- The cash differential of the Singapore 180 CST assessment is expected to continue to rise, according to market traders, on the back of a spike in South Asian demand for power generation over winter.
- Pakistan State Oil issued buy tenders seeking 585,000 mt of 180 CST HSFO over the fourth quarter, which traders said is behind the recent bullishness in the Singapore 180 CST market, amid expectations of the November-December backwardation in the swaps market expected to widen further from the Oct. 16 assessment of $3.50/mt.
- In the downstream bunker market, the availability of HSFO bunkering barges remains limited in Singapore amid vessel delays following two recent typhoons in Japan and South Korea.
- The Singapore-delivered 380 CST bunker premium to Singapore 380 CST HSFO cargo assessments increased $1.71/mt to $21.03/mt on Oct. 16 from $19.32/mt on Oct. 9, Platts data showed.
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