Asia/Pacific News
Ample Supply Drags Singapore VLSFO Premiums to Record Lows
Ample supply and lacklustre demand are driving VLSFO bunker premiums in the Singapore market to the lowest level on record.
The premium for delivered VLSFO over cargo prices in Singapore dropped to just $5.75/mt on March 17, the lowest level on record, price reporting agency Argus Media reported last week. Meanwhile S&P Global Platts said the crack spread for 0.5% sulfur fuels delivered in the city-state sank to $12.69/bl on March 17, the lowest since January 26.
Delivered VLSFO prices for Singapore have dropped by $25/mt since the end of last month, according to Ship & Bunker prices, reaching $494/mt on Friday.
Ample supply from the oil majors have combined with increased import volumes arriving from the west and sluggish buying interest to bring downward pressure on prices and bunker premiums.
"If you are a first class owner with regular tonnage is a good time to be a buyer with all suppliers keen for direct business to maintain tonnage and profit margin," Paul Hardy, head of business development at brokerage NSI, said in a note to clients last week.
"Please note though product that is 'too cheap' may carry some quality risk in areas where bunker premiums are being squeezed.
"It is essential not to fix without knowing the physical supplier and the quality."
