14-02-2017

Asia Fuel Oil-Cash differentials sink to 6-month low amid seller discounts

Asiafuelo

Aggressive seller discounts on cargoes of the 380-cst fuel oil in the Platts window dragged cash differentials of the industrial fuel to its lowest levels since August 2016.

Cash discounts of Asia’s 380-cst fuel FO380-SIN-DIF were assessed at minus $1.13 a tonne to Singapore quotes, down 82 cents from minus 31 cents a tonne on Friday. The last time cash discounts were wider was on Aug. 11 at minus $1.18 a tonne.

Hin Leong on Monday sold two 20,000 tonne cargoes of the 380-cst fuel to Glencore and PetroChina for a flat price of $318.50 per tonne each for delivery between Feb. 24 and March 4, industry sources said.

Monday’s deal values are approximately equivalent to a discount of minus $2.80 a tone to Singapore quotes.

By comparison, Hin Leong on Friday bought 20,000 tonnes of the same fuel from Shell at a premium of 50 cents a tonne to the balance of the February prices, or approximately plus 20 cents a tonne to Singapore quotes.

In the break-bulk ex-wharf market, some suppliers continued to make aggressive offers as low as $321 a tonne while others offered the fuel at higher price levels around $323.50 a tonne.

Traders said some suppliers were willing to offer lower ex-wharf prices in response to seasonally slower demand for bunker fuels in February, as well as to make room for supply replenishments.

SINGAPORE BUNKER SALES SURPRISE

Sales of marine fuels in Singapore surprised to the upside after official data showed volumes surge to a record 4.46 million tonnes in January — the highest in any month since records began — easing concerns that the introduction of mass flow meters (MFM) could negatively impact bunkering activity.

“The (January) numbers imply that ship-owners and operators are even more confident to take bunkers in Singapore now that all deliveries are made using MFM barges,” a Singapore-based bunker fuels trader in Singapore said.

January sales volumes were 7 percent higher from the same time last year and 14 percent higher from the quantities sold in December, the latest data MPA showed.

    CASH DEALS: Two trades reported.
    - Please refer to for more details.
 FUEL OIL                                                                                  
 CASH ($/T)                 ASIA CLOSE       Change   % Change   Prev       RIC
                                                                 Close      
 Cargo - 180cst                      328.32     7.93       2.48     320.39  FO180-SIN
 Diff - 180cst                         0.65     0.49     306.25       0.16  FO180-SIN-DIF
 Cargo - 380cst                      320.24     6.54       2.08     313.70  FO380-SIN
 Diff - 380cst                        -1.13    -0.82     264.52      -0.31  FO380-SIN-DIF
 Bunker (Ex-wharf)- 380cst           321.50     5.50       1.74     316.00  BK380-B-SIN
 Bunker (Ex-wharf) Premium             1.26    -1.04     -45.22       2.30

Source: Reuters 

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