IMO2020: Rollercoaster HSFO Prices Send Singapore VLSFO Premiums Under $85/mt

Friday August 30, 2019

A rollercoaster month for HSFO prices has resulted in August offering little clarity on what the premium for IMO2020 grade bunkers will be. This is despite spot price indications for 0.50% sulfur VLSFO now being available for a number of key ports.

Looking purely at the averages, data compiled by Ship & Bunker shows for August the VLSFO premium over IFO380 averaged $147.50/mt in Singapore, $200.50/mt in Rotterdam, and $249.50/mt in Fujairah.

However, dramatic HSFO price movements during this period meant Singapore saw the VLSFO premium hit a high of $213.50/mt on August 15, before narrowing to a low of only $81/mt on Thursday.

The premium at month end on Friday was $83/mt.

In that time the world's largest bunkering port saw IFO380 prices start that month on August 1 at $466/mt and end the month Friday $29/mt lower at $437/mt, but in the interim hit a low of $349.50/mt on August 15 putting the spread for the month at $116.50/mt.

In contrast, indications for VLSFO in Singapore move between $573/mt and $520/mt, a spread of $53.

Rotterdam's price movements were less pronounced, with a VLSFO premium of between $219.5/mt and $168.5/mt - a spread of $51 - with VLSFO prices themselves hitting a high of $564/mt and a low of $494/mt.

Fujairah VLSFO prices for the period stayed in the low $600/mt range, but HSFO movements put the premium for IMO2020 grade fuel between $298.50/mt and $180.50/mt.

Since early July Ship & Bunker has been publishing spot pricing for 0.50% sulfur material in the major ports of Singapore, Rotterdam and Fujairah, with indications also available in Russian Far East and Taiwan.

VLSFO pricing for additional ports is expected within the coming weeks, and in to begin for most major bunkering ports during Q4.

The global 0.50% sulfur cap on marine fuel comes into force from January 1, 2020.