Los Angeles Bunker Volumes Drop 37%

Los Angeles's bunker sales have fallen as sales in Russia's Far East have risen

Bunker fuel volumes delivered at the Port of Los Angeles on the U.S. West Coast dropped 37 percent for the first five months of 2013 compared with the same period last year, Platts reports.

Quoting data obtained from the port Tuesday, Platts said May deliveries at the port fell 13.2 percent year-on-year to 761,705 barrels, while the year-to-date volumes dropped to 3.57 million barrels from 5.67 million barrels last year.

Volumes in East Asia experienced a less severe drop, with year-to-date volumes down 4.63 percent in Singapore, 12.2 percent in Japan and 13.4 percent in South Korea.

Increased sales in Russia’s Far East, where the absence of an export tax drops bunker prices by $100 to $200 per metric tonne (mt), has pushed down sales in the other ports, sources told Platts.

"Even the most competitive market will never be able to compete with Far East Russia,” one source said.

“If a ship that typically lifts in a port like Los Angeles ... has a Russia option, there is basically nothing you can do."

Other sources attributed the reduced demand in Los Angeles to ships’ increased efficiency through slow-steaming, global economic sluggishness, volatility in the Los Angeles market, and a lack of competition among suppliers there.

Some fuel oil suppliers have moved product to East Asia because of the lack of demand in Los Angeles, sources said.

Pemex trading arm PMI reportedly moved 130,000 mt of fuel oil from the West Coast to Singapore in June.

As of April, bonded bunker sales had reportedly doubled in one year at the Far East ports such as Vladivostok, Nakhodka and Vostochniy.