Asia Fuel Oil-Physical markets mixed; buying interest focused on 180-cst fuel oil


Greater buying interest for 180-cst fuel oil FO180-SIN-DIF in the Platts window on Tuesday helped cash premiums to recover the previous session’s losses.

By contrast, an absence of trades and generally lower bids for 380-cst fuel oil FO380-SIN-DIF meant that cash premiums for the higher viscosity fuel extended losses for a fourth consecutive session, sinking to a three-week low.

Three cargo trades were reported in the Platts window, totalling 60,000 tonnes of 180-cst fuel oil.

Traded volumes of physical cargoes were the lowest since April 28.

A total of 1.22 million tonnes of fuel oil have traded in the window since the start of May, against 3.821 million tonnes in April.

The ICE-traded 380-cst June/July spreads contract narrowed its discount to minus 10 cents a tonne, up from minus 20 cents in the previous session after trading about 185,000 tonnes in contracts by 1700 Singapore time (0900 GMT).

Industry sources said the spreads contract sank to as low as minus 30 cents a tonne earlier in the day before the start of physical trade in the Platts window.

The 380-cst June/July spread contract had been trading at a premium since about April 28 but a build up in selling pressure on Monday sent the contract into contango.

Open Interest (OI) in the ICE 380-cst June contract fell to 10.42 million tonnes, down from its 2017 high of a little more than 10.5 million tonnes on Monday.

Sri Lanka’s Ceypetco is seeking up to 35,000 tonnes of 180-cst fuel oil with a maximum sulphur content of 1.8 percent for delivery June 26-27 at Muthurajawela in Colombo.

The tender closes on May 23.

Ceypetco recently awarded Trafigura an import tender for a similar cargo for delivery June 1-2 at a premium of $40 a tonne to 180-cst quotes on a delivered ex-ship (DES) basis.

The International Maritime Organization’s (IMO) global sulphur cap, effective from the start of 2020, could displace as much as 1-2 million barrels per day (mbpd) of high-sulphur fuel oil (HSFO) demand, Wood Mackenzie said in a presentation on Tuesday.

Global HSFO demand currently stands at about 4 mbpd.

 FUEL OIL                                                                                  
 CASH ($/T)                  ASIA CLOSE      Change   % Change   Prev       RIC
 Cargo - 180cst                      309.34     1.30       0.42     308.04  FO180-SIN
 Diff - 180cst                         3.59     1.17      48.35       2.42  FO180-SIN-DIF
 Cargo - 380cst                      299.37     0.18       0.06     299.19  FO380-SIN
 Diff - 380cst                         0.97    -0.51     -34.46       1.48  FO380-SIN-DIF
 Bunker (Ex-wharf)- 380cst           304.00     1.00       0.33     303.00  BK380-B-SIN
 Bunker (Ex-wharf) Premium             4.63     0.82      21.52       3.81

Source: Reuters 

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