Bunker demand in the country is dropping rapidly. Image Credit: Ship & Bunker / Data Credit: AMP
Bunker demand in Panama dropped sharply in June, according to preliminary data from the Panama Maritime Authority (AMP).
Total demand dropped to 302,330 mt last month, down by 37% from June 2019 and by 21.9% from May 2020's level.
The number of ships arriving in Panama for bunker fuel sank by 29.8% on the year to 449 in June, meaning the average stem size sank by 10.3% to about 673 mt.
Increased competition among bunker suppliers in the US Gulf may be behind the stark decline, Paul Hardy, head of business development at brokerage NSI, told Ship & Bunker Friday.
The USGC has seen especially aggressive market moves by refiners.
Earlier this year industry association IBIA reported one of its members estimating bunker demand in the US may have dropped by as much as 20-30% for parts of this year.
"The USGC has seen especially aggressive market moves by refiners keen to maintain tanks flowing and keep the barges moving," Hardy wrote in a note to clients earlier in the week.
This competition has shown up in price spreads in the region. Very low sulfur fuel oil (VLSFO) delivered at Balboa was at an average $33.30/mt premium to Houston's levels in June, according to Ship & Bunker pricing, compared with a premium of $24.95/mt the previous month.
Panama's VLSFO sales dropped by 25.2% from May's levels to 228,563 mt in June, according to the AMP data, while high sulfur fuel oil sales gained 10.6% to 36,963 mt.
Marine gasoil sank by 52.6% on the month to 6,666 mt, and low sulfur marine gasoil declined by 11.1% to 30,138 mt.