S&B ANALYSIS: Singapore's 2020 Bunker Sales Make Biggest Gain in 4 Years

Gains came from an increase in Singapore's average stem size. Image Credit: Ship & Bunker / Data Credit: MPA

  •  December decline held 2020 total just below 50 million mt
  •  Bunker hubs gaining at expense of smaller ports
  •  Container traffic declined while tankers and dry bulk increased

Annual bunker sales at the world's largest marine fuels hub came in just short of 50 million mt in 2020 as a small decline in December pared the city-state's biggest gain in four years.

Singapore's total demand dropped to 4.3 million mt in December, according to preliminary data from the Maritime and Port Authority (MPA), up by 0.6% from November's level but 3.9% lower than that seen in December 2019.

December's year-on-year decline will partly reflect an artificially high level at the end of 2019, when shipping companies were rushing to stock up on the new VLSFO blends before the 0.50% sulfur limit came into effect.

That left total 2020 demand at 49.8 million mt, 5% higher than 2019's levels despite an overall global market decline last year. The yearly gain was the biggest since 2016.

As the mandatory mass flow meters used to measure all bunker deliveries in Singapore come with a +/-0.5% margin of error -- still more accurate than the traditional systems used in any other port -- the volumes data for the year could have a variance of about 250,000 mt in either direction.

Only government licensed companies can supply bunkers in Singapore, and MPA calculates sales based on the BDNs of those companies.

Bunker Hubs Win in Shrinking Market

Singapore benefited from a consolidation of bunker demand at the larger hubs last year at the expense of the smaller ports. This happened at first with the advent of IMO 2020 as shipowners had concerns over VLSFO availability at some ports, and then later during the instability of the markets disruption during the COVID-19 pandemic.

Growth in port activity came largely from tankers and bulkers. Image Credit: Ship & Bunker / Data Credit: MPA

Rotterdam has also seen growth this year, with demand in the first three quarters of 2020 4% higher than in the same period of 2019.

More With Less

Singapore's gains last year came despite fewer vessels arriving there seeking bunker fuel; vessel calls for bunkering slipped by 0.8% on the year. 

The sales growth came from a rise in the average size of ships arriving. The average stem size for 2020 was about 1,228 mt, up by 5.8% from 2019's levels.

That change in the size profile of ships seeking bunkers in Singapore will partly have stemmed from the pandemic's effect on the cruise industry. The gross tonnage of passenger vessels coming to the port plummeted by 41.1% on the year.

Container gross tonnage also dropped, losing 3.9% from 2019's levels, but dry bulk advanced by 5.3% and tankers increased by 8.9%.

The challenge for Singapore will now be to grow its sales further at a time when the smaller ports will be vying to retake the market share they lost last year. Congestion may also become a problem as demand levels creep back towards 2017's record high of 50.6 million mt/year.

December's Data

Last month saw a sharp 11.8% decline from a year earlier in ships calling at Singapore to bunker, to 3,377 vessels. That took the average stem size in December to about 1,270 mt, up by 8.9% on the year.

Very low sulfur fuel oil and 0.5% sulfur gasoil and diesel sales climbed by 3.4% from November's levels to 3 million mt in December, while high sulfur fuel oil (HSFO) sales slipped by 3.8% to 1 million mt. HSFO's share of total demand was 23.8%.

Sales of 0.1% sulfur gasoil and ultra low sulfur fuel oil sank by 9.1% on the month to 295,100 mt, the MPA said.