World News
Singapore-Rotterdam Bunker Price Spread Widens to New High
Market participants have pointed the finger firmly at IMO2020 as the reason why a recently rising premium for bunkers in Singapore vs Rotterdam hit new highs last week.
Ship & Bunker data indicated on Thursday July 11, 2019 IFO380 in Rotterdam was priced at $416.00/mt, vs $500.50/mt in Singapore.
The difference of $84.50/mt was the highest since at least March 2012 when Ship & Bunker records began.
The spread narrowed to $82/mt Friday as bunker prices retreated, but overall the Singapore premium has been rising sing the start of the month. It sat at just 32.5/mt on July 1 and prior to that has averaged $23.9/mt during the first half of 2019.
Moreover, relative to crude Rotterdam bunkers are not particularly cheap either, priced Friday at a discount to Brent of around 18%.
This compares with an average discount to Brent of 25% for calendar year 2017 and 2018.
But IFO380 in Singapore Friday was at a discount to Brent of just 1%.
The spike has also been picked up in S&P Global Platts data, who Friday reported its Singapore delivered 380 CST bunker premium over MOPS 380 cSt HSFO hit a 16+ year high of $33.57/mt as at last Thursday's close.
It was last higher at $34.13/mt on March 20, 2003, Platts added.
Traders said preparations for the shift IMO2020 grade products in the region was part of the reason for the widening spread.
"I guess [IMO] 2020 is also a game-changer...most of the VLCCs outside are now storing LSFO," Platts quoted a marker source as saying.
Key Bunker Prices More
| VLSFO | MGO | |||
|---|---|---|---|---|
| $/mt | +/- | $/mt | +/- | |
| Singapore | 649.50 | 2.00 | 778.50 | 8.50 |
| Rotterdam | 602.00 | 0.50 | 748.00 | 6.00 |
| Houston | 624.00 | 5.00 | 792.00 | 3.50 |
| Fujairah | 649.50 | 2.00 | 898.00 | 3.00 |
| Global 20 Ports Average | 662.00 | 2.00 | 855.00 | 1.50 |
| Global 4 Ports Average | 631.00 | 1.00 | 804.00 | 0.50 |
| Global Average Bunker Price | 717.50 | 0.50 | 913.50 | 1.00 |
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