Singapore ex-wharf 500 CST bunker fuel August discounts up to $6-7/mt

Singapore ex-wharf 500 CST bunker fuel term contracts for August have been concluded at discounts of around $6-7/mt to the Mean of Platts Singapore 380 CST high sulfur fuel oil assessments, market sources said Wednesday.

Discounts in July were around $11-12/mt, market sources said at the time.

Premiums or discounts for physical bunker fuel are the prices buyers are willing to pay over or under published benchmark values.

The market has seen a severe shortage of supply in the past two months or so, with the US exporting less of the grade, said trade sources.

The discounts have been steadily rising, with buyers unable to find any supply available on the spot market in recent weeks.

Many sellers have kept any available supply to fulfil their term contract commitments, they said.

While August discounts have not reached the record highs of $3-4/mt seen some years back, it looks like the market has stabilized and the spread between the 380 CST and 500 CST grades has “recovered from depressed differentials,” said one trade source.

Supply of 500 CST is expected to be slightly over half a million in August, said traders. Demand on average per month is about 640,000-650,000 mt, according to data from the Maritime and Port Authority of Singapore.

September supply should improve, and is “looking better than August” to date, trade sources said.

Bids were around minus $8-9/mt, while offers went from minus $8-9/mt to minus $4-5/mt this week, sources said.
Source: Platts