ENGINE: East of Suez Bunker Fuel Availability Outlook

Prompt supply remains tight in Singapore and Fujairah, while easing of quarantine restrictions in Hong Kong set to bring back demand.
Singapore’s fuel oil inventories rose to five-week highs last week, according to Enterprise Singapore data. A rise in net imports and a slowdown in demand through May has added weight to the port’s stocks.

VLSFO and LSMGO can be tight for prompt dates in Singapore. Lead times for VLSFO stems are unchanged on the week at 5-6 days, while LSMGO lead times are one day longer this week at 4-5 days. Some suppliers have more prompt delivery slots.

HSFO380 remains tight in Singapore as fewer suppliers offer it. Lead times of up to 10 days are recommended for the high-sulphur grade, and suppliers generally charge premiums for stems below a certain size, typically 700 mt and below.

Fujairah’s heavy distillate and residual fuel oil inventories fell by 5% to 13.87 million bbls last week, after rising sharply in the preceding week, data from S&P Global Platts and the Fujairah Oil Industry Zone showed.

Prompt availability continues to be tight Fujairah. Lead times are around six days for VLSFO and LSMGO stems, and eight days for HSFO380. Some suppliers can delivery on shorter notice.

More stringent port controls and delays in approving ship arrivals has delayed bunkering and congested the port of Zhoushan, China’s main bunkering hub. Rough weather added to the delays over the weekend. The port has ample supplies of all fuel grades, however, and prompt deliveries are possible.

Bunker-only calls have been suspended in several southern Chinese ports as authorities worry about spiking Covid-19 infections from the Delta variant that has been wreaking havoc lately.

The cities of Guangzhou and Shenzhen have been particularly badly affected by the flare-up in cases, leading authorities to lock down certain areas and restrict ship arrivals in ports.

The port of Xiamen in the Fujian province suspended bunkering for ships not working cargo two weeks ago. The Guishan anchorage near Hong Kong followed suit with a suspension last week. Ships working cargo in ports can still bunker while at berth.

But while bunker-only calls have been restricted in these areas, Hong Kong has eased its 14-day quarantine restrictions for certain ships, paving the way for a return of bunker-only calls there again.

Ships arriving in Hong Kong for shipping services such as bunkering without loading and unloading cargo can be exempt from quarantine from Tuesday.

Bunker demand slumped in Hong Kong July last year, when its authorities required ship crew to quarantine from to limit Covid-19 infections. With Hong Kong back on the bunker-only calls map, demand could shift back to the port from regional alternatives such as Xiamen, Guishan, Zhoushan and Singapore.

Suppliers expect demand to rebound quite quickly in Hong Kong now that bunker-only calls are more viable. There has already been signs of renewed interest in Hong Kong as a bunker-only option, sources say.

Availability has tightened slightly in South Korea’s southern ports this week, with recommended lead times for VLSFO one day longer at 3-5 days now. Prices for the grade are currently uncompetitive with Chinese ports, and in particular with Zhoushan, which has the grade at discounts of around $20-30/mt to the lowest-priced southern South Korean ports.
Source: ENGINE (https://engine.online/)

This article has been posted as is from Source

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