Asia/Pacific News
Singapore: Fundamentals Squeeze Bunker Margins
Rising cargo prices for fuel oil and stiff competition in the delivered bunker market is squeezing margins for Singapore bunker players.
Some smaller independents may scale down operations as a result, according to price reporting agency SP Global Platts.
Tier-2 bunkering companies are seen to be the most vulnerable.
"The narrowing price spread between marine fuel 0.5% S bunker sold on a delivered basis and on an ex-wharf basis has been cutting into margins, especially for smaller-sized sellers involved only in the delivered bunker trade," market sources were cited as saying in the report.
Platts data shows that the spread between ex-wharf and delivered bunker prices has lost around $2 per metric tonne (pmt) in September over July and August to be just under $4 pmt.
A margin of $5 pmt is usually considered by market players to be the minimum to cover operational costs.
