A fall in demand even as increased supply from one refiner dragged down the premium for Tokyo Bay-delivered 380 CST bunker fuel to the Mean of Platts Singapore 380 CST high sulfur fuel oil assessments by $5.48/mt week on week to hit a 4 1/2-month low of $28.76/mt on Wednesday. It was last lower at $21.71/mt on August 1, S&P Global Platts data showed.
Cosmo Oil was selling fuel oil in the bunker fuel market as refining margins for middle distillates were low, traders said this week. This lowered spot prices as a result, they added.
“Spot volume for December is slightly more than usual, the middle distillates market is not very good,” a source close to Cosmo Oil said last week.
“There is plenty of supply as Cosmo wants to sell,” a trader said.
“Cosmo’s prices are about $6-7/mt cheaper,” another trader said, meaning they were lower than bunker fuel offered by Japan’s largest refiner JXTG Nippon Oil & Energy.
A source close to JXTG confirmed that Cosmo Oil was supplying more fuel oil than usual.
Meanwhile, demand has fallen from previous months.
“November was very strong, so December is weak [in comparison],” yet another trader said.
“Market seems to be a bit quieter than last month,” a refiner said.
Japan’s bunker fuel demand has softened from the peak seen in August, when buyers turned to Japanese supply after a spate of fuel contamination issues in the Singapore market, as reported by Platts previously.
Japanese refineries are self-sufficient in domestic fuel oil production, making imports extremely rare.
As concerns over contaminated fuel eased, demand waned, however.
Market participants said they expected demand to fall further as bunkering and barge operations are usually suspended from the end of December to early January.
“[There would be only] another 1-2 weeks more of orders before the [year-end] close,” a trader said.
There Is a Steady Growth in the Number of Indian Seafarers Employed: Dr. Malini V. Shankar, (IAS), Director General of Shipping
India Shipping and Offshore Summit