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Singapore ex-wharf 380 CST bunker premium at 15-month high on tight supply

The Singapore ex-wharf 380 CST bunker premium rose to a 15-month high of $5.45/mt at the Asian close Monday on tight availability of the finished 380 CST bunker fuel grade.

Singapore ex-wharf 380 CST bunker premium to the Mean of Platts Singapore 380 high sulfur fuel oil assessments rose $2.49/mt day on day to $5.45/mt Monday. The premium was last assessed higher at $6.31/mt on January 13, 2017, S&P Global Platts data showed.

Some of the bunker fuel sellers were facing specification issues, traders Tuesday said.

“I think in general market is tight on availability … there is oil, but not on specification 380 CST or 500 CST bunker fuel, so it needs to be blended to meet the bunker specification,” a trader said.

“The blending issues have led to overall delays,” another trader said. “We heard some sellers had issues with high aluminum and silicon concentrations … it’s going to be tight for one week.”

On April 11, Platts reported that fuel testing agency Veritas Petroleum Services had issued a fuel quality alert advisory on April 9 to industry participants on highly abrasive bunker fuel supplied in Singapore.

Veritas said it had tested several fuel oil samples representing HFO deliveries in Singapore with Aluminum and Silicon (Al+Si) concentrations ranging up to 102 mg/kg.

The International Organization for Standardization’s ISO 8217:2005 standard for RMG 380 marine residual fuel, which is the fuel specification typically guaranteed in most contracts entered into between buyers and sellers of the bunker fuel grade in Singapore, limits maximum Al+Si at 80 mg/kg.

Besides specification issues, supply tightness has also stemmed from congestion at Singapore terminals, traders said.

“There were people shifting tanks recently that is causing some [tightness] issues too,” a third trader said.

A relatively large volume of high density and high viscosity fuel oil in the market, coupled with tight availability of blending components required to blend 380 CST bunker grade HSFO, has led to a firming of the 380 CST HSFO market too, traders said.

The cash differential for 380 CST HSFO rose for the third consecutive trading session Monday. It rose 31 cents/mt day on day to a 12-week high of $1.80/mt Monday. It was last assessed higher at $1.87/mt on January 29, Platts data showed.

Source: Platts

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