Singapore bunker suppliers conclude Q4 ex-wharf term premiums at $5.75-7/mt
Bunker fuel suppliers in Singapore have concluded ex-wharf term contracts for the fourth quarter of 2012 at premiums of between $5.75/mt and $7/mt to the Mean of Platts Singapore 380 CST high sulfur fuel oil cargo assessments, market sources said this week, Platts reports.
The range was wider than the premium levels of $6.50-7/mt seen for Q3 term contracts.
Premiums for physical bunker fuel are the prices buyers are willing to pay for oil over and above published benchmark values.
By comparison, Q2 term premiums were concluded at $6-7/mt, while Q1 premiums were around $16/mt on average, reflecting how badly hit the bunker market has been by the global economic woes so far this year.
Shipowners have held back on buying, as they continued to suffer the effects of a still-weak global economy.
August bunker sales also hit a six-month low, at 3.56 million mt, according to latest data by the Maritime and Port Authority of Singapore. This was down 6.8% from 3.82 million mt in the year-ago period.
Cargo supply arrivals for October are around 4.5-5 million mt, more than ample for a market that has been seeing weak demand for weeks now, market sources said.
November supply arrivals are currently estimated around the 2.5-3.5 million mt mark, with plenty of time to fix for more supply to come, sources said.
Specifications for supply are expected to be fine, with either ready grade available for the bunker market or sufficient components to blend to the correct specifications for the market, sources said.
Singapore's commercial stockpiles of heavy distillates have held steady at around the 18.5-19 million-barrel mark for at least four weeks now.
According to data released by International Enterprises Singapore, total stocks of heavy distillates, which IE describes as "residues" and include cracked and straight run fuel oil and low sulfur waxy residue, were reported at 18.53 million barrels on Thursday this week.
On the cargo export front, China has not been importing from Singapore, which leaves even more supply available for the Singapore bunker market.
Spot premiums for the ex-wharf 380 CST have hovered around the $5-7/mt mark in recent weeks, reflective of the term market.
