Asia/Pacific News
Coronavirus Demand Impact May be Keeping Singapore VLSFO Supply Deficit at Bay
A reported supply deficit of very low sulfur fuel oil (VLSFO) in Singapore may be getting held back by current muted demand in the region because of the Coronavirus outbreak.
Singapore is currently receiving just 2-2.5 million mt/month of VLSFO, price reporting agency S&P Global Platts reported Thursday, and supply is expected to remain at this level throughout the first quarter.
This level is not enough to meet typical demand levels for Singapore, and stockpiles of VLSFO at the world's largest bunkering hub are shrinking, the company cited a Singapore-based fuel oil trader as saying.
For December Singapore's Maritime and Port Authority reported a combined 2.63 million mt of VLSFO sales, as well as 407,300 mt of low sulfur marine gasoil demand.
Preliminary bunker demand data for January is likely to be published at the end of next week, which will give a more complete picture of the marine fuel market in Singapore at the start of IMO 2020.
But any VLSFO shortage is likely to have a muted impact at present in the Asia-Pacific region, as delays to shipping caused by the Coronavirus outbreak in China and the subsequent extended Lunar New Year holidays are presumed to be weighing heavily on demand.
VLSFO in Singapore cost just $75/mt more than at Rotterdam on Wednesday, according to Ship & Bunker pricing, down from a $147.50/mt premium at the end of 2019.
