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Asia residual fuels: Key market indicators for June 28-July 2
28th June 2021 09:22 GMT

 

Morning discussions for the August ICE Brent futures contract were trading at $76.13/b at 0230 GMT June 28, up from the $75.72/b level at 0830 GMT June 25, Intercontinental Exchange data showed.

 

In the low sulfur fuel oil market, July arrivals of cargo into Singapore from the West, estimated at levels similar to June are not expected to provide additional supply length in a market where bunker demand has showed sporadic signs of a pickup, fuel oil traders in Singapore said.

In the high sulfur fuel oil market, after the initial purchases of straight-run fuel oil, at least two of Shandong's independent refiners have expressed an interest in seeking high sulfur SRFO barrels on a more regular basis to avoid refinery run cuts in the short-term.

 

Marine Fuel 0.5%S

 

** Discussions for the Singapore Marine Fuel 0.5%S July/August spread June 28 rose to $0.25/mt compared with the June 25 assessment of minus $0.10/mt, according to Intercontinental Exchange data.

** Traders' expectations of low sulfur fuel oil arbitrage cargoes arriving in Singapore in July, starting with the week ending July 2 from the West are estimated at approximately similar levels to June's 2.2-2.3 million mt, according to fuel oil traders surveyed by Platts.

** Despite a forecast of a hotter-than-usual summer in the third quarter by the Japan Meteorological Agency in the northern and eastern regions, a company source at the country's largest refiner ENEOS said there was no move yet to procure any additional fuel oil cargoes to meet power generation demand.

** The downstream Singapore marine fuel 0.5%S bunker market meanwhile is unlikely to see much of an upside in terms of valuations as trading for July delivery product begin going into the week starting Jun. 28.

** Demand has been less-than-enthusiastic overall as a relatively high flat price left buyers with little incentive to buy any more than what was required on a prompt basis, although on days when the flat price dipped, some suppliers reported more inquiries from vessel owners.

** In North Asia, a rise in bunker-only calls over the past week has supported demand for VLSFO in South Korea, while supplies remained balanced against demand.

** A South Korea based bunker supplier said that the narrowing delivered marine fuel 0.5%S spreads between South Korea and Singapore is helping draw demand from vessels plying along the Russia-Australia sea lanes.

 

 

High Sulfur Fuel Oil

 

** According to ICE data and brokers's numbers, morning discussions for the Singapore 380 CST July/August high sulfur fuel oil spread opened June 28 at $1/mt, up from the June 25 assessment at $0.70/mt.

** China's independent refiners in Shandong province, which have sought additional straight-run fuel oil cargo as a feedstock after the June 12 imposition of a consumption tax on bitumen blend imports came into effect, said they see SRFO imports as a short-term solution.

** "For some of us, it can only make up a maximum of one-seventh of our feedstock slate, as the product yields bitumen and gasoil are lower [compared with crude oil]," said one independent refiner. "There is still some cargo arriving in early-July, so after that, we'll have to see whether [SRFO] prices make it a viable feedstock," the refiner added.

** On the high sulfur bunker fuel front too, in Hong Kong, bunker suppliers said that the market has benefited from the stringent port restriction in Southern China, as it resulted in more shipowners scheduling bunker-only calls at South Lamma.

** However, sources said that suppliers might face tightness in HSFO inventories, as there are no scheduled HSFO cargo arrivals until mid-July.


Bunkerworld .,
28th June 2021 09:22 GMT