Thursday, March 30, 2023
HomeHeadlinesFalling Bunker Fuel Premiums in Singapore Point to Slow Shipping Market

Subscribe

To our FREE newsletter
Get all the latest maritime news delivered straight to your inbox.

Falling Bunker Fuel Premiums in Singapore Point to Slow Shipping Market

Premiums of marine fuel, also known as bunkers, are set for a bumpy recovery in March in Singapore, the world’s largest bunkering port, as refuelling demand from the shipping sector has recently waned, multiple trade sources said.

A weaker Singapore bunker market reflects slowing activity at one of the world’s most major ports that sits on a crucial shipping lane, while lower demand will also weigh on Asia’s fuel oil refining margins.

Bunker premiums for the most actively traded very low sulphur fuel oil (VLSFO) grade, which contains maximum 0.5% sulphur, have tumbled over 65% compared to early 2023, with most of the drop occurring in the past week, sources said.

Latest spot deals on a delivered basis were between $10 to $13 a tonne over Singapore quotes, according to traders, compared to $30 to $35 in early January.

“There has been a lot of aggressive selling these days and everyone is trying to clear inventories,” said a bunker trading source in Singapore.

Some buyers did not lift their usual term quantities as slower shipping demand reduced refuelling requirements, the source added.

This led to unsold inventories piling up, with some sellers offering aggressively lower prices to encourage uptake.

The weaker bunker market also kept premiums for Asia fuel oil cargoes suppressed, which were already under pressure on the prospect of higher supplies from Kuwait’s Al Zour refinery.

DELIVERED/EX-WHARF PRICE SPREAD CRUNCHES

The price difference between delivered and ex-wharf VLSFO has narrowed recently, flipping to a negative spread in some instances, sources said.

To break even, delivered bunker fuel is usually sold above ex-wharf prices as it includes a barging fee that typically costs at least $5 a tonne.

“It was still okay at the start of the year but (demand) suddenly slowed down a lot after the (lunar) new year. We are praying for March recovery,” said a second Singapore-based bunker trader.

January bunker fuel sales hit a two-year high, though February volumes are expected to fall on slower demand from container lines, the sources said.

The outlook for container shipping remains soft, with Southeast Asia’s average container prices in January dropping by 32% from a year earlier to $2,590, according to the latest data from consultancy Container xChange.

“Container prices and leasing rates are plummeting, with the global shipping industry witnessing a freefall in container rates,” said Christian Roeloffs, chief executive officer at Container xChange.

He added that shipping demand remains weak because of global inflation and restricted demand, leading to a significant drop in freight prices.

[reuters]

Related Posts

Video

Finance & Economy
Shipping News
Ports

TORM announces secondary public offering of Class A common shares

TORM announced the commencement of a secondary public offering of 5,000,000 of the Company’s Class A common shares by OCM Njord Holdings S.à r.l.,...

Lomar Appoints Marius Bujor As Technical Director

Lomar Shipping, the shipping subsidiary of the Libra Group, has announced the appointment of Marius Bujor as its new Technical Director. Based in the...

EXMAR Reports Improved 2022 Results

During its meeting of 28 March 2023, the Board of Directors of EXMAR reviewed the results for the year ending 31 December 2022. HIGHLIGHTS 2022 ·...

Carnival Corp Posts Smaller-Than-Expected Quarterly Loss

Cruise operator Carnival Corp on Monday reported a smaller-than-expected quarterly loss and beat estimates for revenue, helped by resilient demand for leisure travel, higher...

Eva Birgitte Bisgaard steps down as chief commercial officer at Maersk Tankers

Eva Birgitte Bisgaard is stepping down from her role as chief commercial officer at Maersk Tankers. Christian M. Ingerslev, chief executive officer of Maersk Tankers,...

Wartsila sees role for ethanol in fragmented bunker fuel landscape

Wartsila is seeing a potential role for ethanol in the shipping industry’s multi-fuel future,...

Baltic index ticks up on firm demand for larger vessels

The Baltic Exchange’s main sea freight index edged up on Wednesday on higher rates...

Baltic index drops to a near 3-week low on lower vessel demand

The Baltic Exchange’s main sea freight index, tracking rates for ships carrying dry bulk...

Baltic index falls on lower vessel demand

The Baltic Exchange’s main sea freight index, tracking rates for ships carrying dry bulk...

Global Goods Trade Softening from 2022’s Record Level

International commerce soared to a record of $32 trillion in 2022, but goods trade...

APM Terminals to double capacity in Rotterdam port

APM Terminals, a subsidiary of Danish shipping company Maersk MAERSKb.CO, plans to double its capacity at Rotterdam Port, a spokesperson for the company said...

APM Terminals announces strategic partnership in Vietnam

APM Terminals engages in a strategic partnership with Vietnamese HATECO group for a project to develop two new deep-water berths at Lach Huyen port...

Russia-Bound Containers Stuck At Antwerp Port For Over A Year

Five Russia-bound containers from India’s Jindal Stainless Ltd (JSL) JIST.NS have been stuck at the Belgian port of Antwerp for around a year, unable...

Drewry: Port Throughput Index Down 4.5% Year-on-Year

The Drewry Container Port Throughput Indices are a series of calendar adjusted volume growth/decline indices based on monthly throughput data for a sample of...

Port of Los Angeles moves 487,846 container units in February

The Port of Los Angeles processed 487,846 Twenty-Foot Equivalent Units (TEUs) in February, a 43% decrease from the previous February’s all-time record. “February declines were...