Supply tightness in the Singapore high sulfur fuel oil market is expected to ease in the second half of May when blending stocks to make on-spec fuel oil arrive in the city state, trade sources said Monday.
“We don’t see any difficulty in buying on-spec cargoes in the second half of May,” a trader based in Singapore said.
“The backlog of the off-spec problem would have been cleared by H2 May, assuming no further off-spec issues crop up,” another trader said.
The cash differential for Singapore HSFO has also started to come off. The 180 CST HSFO cash differential rose to $3.59/mt on May 2, the highest level since May 29 last year, S&P Global Platts data showed. But the differential dropped to $1.94/mt last Friday.
The 380 CST HSFO cash differential rose to $3.14/mt on May 2, but declined to $2.62/mt Friday, according to Platts data.
Supply of HSFO tightened early in H2 April amid specification issues, namely flash point, water content as well as aluminum and silicon content, trade sources said.
Veritas Petroleum Services said in advisory notes that it had received samples of bunker fuel supplied in Singapore with low flash point on April 6 and April 25, Platts reported previously.
Meanwhile, a bunker trader said he was offered 380 CST bunker fuel for loading from the end of May to early June at a premium of around $2.40-2.50/mt to the Mean of Platts Singapore 380 CST HSFO assessments on an ex-wharf basis. The Singapore 380 CST ex-wharf bunker premium to the MOPS 380 CST HSFO assessments was assessed at $7.85/mt on Friday for cargoes loading over May 7-19, Platts data showed.
While the tightness was easing, a trader said, however, that there were still “lots of spec issues.” Other traders agreed, saying that the issues had not been fully fixed, but that they are fewer than before.
Source: PlattsPrevious Next
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