Supply of HSFO380 is tight in Singapore, Fujairah, Zhoushan and parts of the Mediterranean, while VLSFO and LSMGO grades are ample across most global bunkering hubs.
HSFO380 has been particularly tight in Fujairah after a supplier exited the market last month, leaving only three other suppliers still carrying the grade.
Availability tightened further last week, when only one of the three suppliers had volumes to offer.
Tighter supply pushed Fujairah’s recommended lead times to 12 days last week, and spiked its price to premiums of $39/mt over Zhoushan and $53/mt over Singapore on 6 August.
Fujairah’s residual fuel oil inventories grew by 5% in the week to 9 August, according to Fujairah Oil Industry Zone and S&P Global Platts data. Storage tanker are fuller now, after slumping to three-month lows last week.
Availability of HSFO380 in Fujairah’s bunker market improved this week, when the two suppliers that lacked volumes to supply last week replenished stocks. Their earliest expected delivery dates vary between 19 August and 25 August.
The supplier that had HSFO380 to offer in Fujairah last week has now run out of product, however.
With more price competition this week, Fujairah’s HSFO380 price momentarily dipped below Zhoushan’s and narrowed its premium over Singapore to $33/mt on 11 August.
Fujairah’s price has later been pushed back up again to premiums of $30/mt over Zhoushan, and $40/mt over Singapore.
HSFO380 prices in Fujairah, Singapore and Zhoushan since 1 July
HSFO380 supply is scant in China’s Zhoushan, where only two of five suppliers can currently offer the grade. Replenishment is not expected until the end of the month, but the two suppliers that have stocks can deliver from 18-20 August.
VLSFO and LSMGO is more widely available in Zhoushan. Its recommended lead times of 2-3 days for the grades are among the shortest across major bunkering ports.
Ningbo-Zhoushan’s Meidong Container Terminal has been closed and all inbound and outbound traffic suspended after a port worker tested positive for Covid-19 in the port.
Incoming vessels have been turned away as a precautionary measure, diverting several vessels to Shanghai and other alternative ports.
While a host of vessels have been backed up waiting for entry to the port, bunkering in Zhoushan is not expected to be severely impacted, sources say. Bunker deliveries at anchorage in Zhoushan are “no touch” – there is no contact between crews on barges and ships.
Higher net imports have lifted Singapore’s residual fuel oil inventories up from five-month lows last week, Enterprise Singapore data shows.
HSFO380 and VLSFO remain tight for prompt dates in the bunkering hub, unlike LSMGO which is more readily available. Around 7-9 days of lead time is recommended for VLSFO and HSFO380, compared to 4-5 days for LSMGO.
HSFO380 supply has also been patchy in several Mediterranean ports in recent days. Certain suppliers across the Gibraltar Strait, Istanbul, and Italian ports such as Ravenna, have had limited availability at times, prompting them to look for import cargoes to replenish their stocks.
Thick fog suspended inbound vessel traffic to Gibraltar on Thursday morning, but harbour crafts and bunker barges were allowed to continue operations, port agent MH Bland said. By mid-day, the fog had mostly dissipated to improve visibility. There were slight bunker delays spilling over from earlier in the week, with three suppliers across Gibraltar and Algeciras running 2-4 hours and 12 hours after schedule.
Calm weather is forecast in the Gibraltar Strait, Canary Islands and Malta over the coming week. Heavy swell is forecast to disrupt Algoa Bay bunkering until the weekend, while high wind bordering on gale is forecast in off Skaw over the weekend.
Independently held fuel oil inventories in the ARA have inched down over the past week, but remain well above their five-year average for this time of year, according data from Insights Global. The hub’s gasoil inventories, on the other hand, have slumped far below the average for the season.
Supply of VLSFO, LSMGO and HSFO380 is abundant in the ARA. A slowdown in bunker demand has contributed to retain more fuel oil in storage. Suppliers can deliver stems the next day to even the same day. Some bunker barges have occasionally been idle, waiting for deliveries.
US residual fuel oil stocks were drawn by 1% last week, and fell to three-week lows amid a dip in refinery production and higher consumption, data from the US Energy Information Administration (EIA) shows.
US fuel oil supply rose by more than a quarter, to a three-week high of 415,000 b/d. Supply is roughly the same as consumption, as it covers fuel oil supplied by refineries, blenders and bulk terminals.
Supply of VLSFO, LSMGO and HSFO380 remains steady across bunker markets in major US ports, including Houston, Los Angeles and New York.
Source: ENGINE (https://engine.online/)