Singapore ex-wharf 500 CST bunker fuel term contracts for the third quarter of 2016 have been concluded at discounts of $7-$8/mt to Mean of Platts Singapore 380 CST high sulfur fuel oil assessments, trade sources said this week.
This compares with current quarter term contracts for the supply of the same grade of fuel oil that have been concluded at discounts of around $6/mt.
“I heard [Q3 term contracts] for RMK [500 CST grade bunker fuel] have been done at [minus] $7-$8/mt,” said a trader.
“I haven’t concluded any [Q3] term for [ex-wharf] 380 CST bunker yet, but yes, [ex-wharf] 500 CST bunker fuel I have done around [minus] $7/mt,” said a bunker supplier.
“I haven’t sold much of [term] 500 CST bunker fuel of late to be frank, but I do know minus $7/mt was offered for Q3 … but I’m not too sure what level the buying was,” said another trader.
Trade sources said a relatively lower volume of the higher viscosity grade bunker fuel has been termed up for the next quarter as compared to the current quarter.
“Buyers don’t want to pay and sellers don’t want to offer down to sell. The liquidity for 500 CST bunker is less … there are less suppliers, so buyers should pay up because at the end of the day it’s easier for sellers to blend up to 380 CST bunker,” said a trader.
The spot daily ex-wharf 500 CST bunker fuel differential to MOPS 380 CST HSFO has so far averaged at minus $7/mt in June, while the spot daily ex-wharf 380 CST bunker fuel differential to MOPS 380 CST HSFO has averaged at a discount of 32 cents/mt, S&P Global Platts data showed.
Premiums or discounts for physical bunker fuel reflect prices buyers are willing to pay relative to published benchmark values.
Source: PlattsPrevious Next
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