The spread between delivered marine fuel 0.5% and delivered 380 CST high
sulfur bunker fuel in Singapore has widened to a new record high of
$420/mt, with less than one week to go before IMO 2020 begins, S&P
Global Platts data showed.
The spread had widened for the eighth consecutive trading day Tuesday and was last higher on Monday at $412/mt, the data showed.
Steady demand and tight prompt delivery boosted MF 0.5% bunker differentials over the last couple of weeks, market sources said.
In contrast, buying activity has rapidly declined for 380 CST high
sulfur bunker fuel since November, ahead of the International Maritime
Organization's 0.5% sulfur mandate, which starts January 1.
Following the trend in Singapore, the price spread between delivered
MF 0.5% and HSFO also hit new record highs across major ports in North
Asia, following stronger demand for low sulfur fuel oil and shrinking
appetite for HSFO.
In Hong Kong, the price spread reached a record high of $247/mt on Tuesday, widening 12.3% week on week, Platts data showed.
"Demand for high sulfur fuel oil is declining, [there are] very few
inquiries on HSFO now. Meanwhile, LSFO supply is getting tight as demand
for LSFO is very high," a Hong Kong bunker trader said.
Supply of LSFO tightened as demand has been strong, with a faster-than-expected draw on stocks, fuel oil traders said.
There is more LSFO supply in Singapore than other countries and this
attracted more ships for bunkering, an industry source said.
Reflecting supply tightness on the cargo front, the cash
differential for Marine Fuel 0.5% rose to $13.50/mt Tuesday, the highest
since September 25, Platts data showed.
