Rotterdam-Singapore fuel oil arbitrage hampered by shortage of VLCCs: traders

Lack of available VLCC’s has hampered arbitrage opportunities to send fuel oil to Singapore for physical fuel oil buyers, traders said.

“The Singapore arbitrage is definitely open now but players are struggling to find available VLCC to move fuel,” one Rotterdam source said.

“The arb looks open for us but we can find a VLCC only for the end of November,” another trader said.

Shipping sources also said a low availability of VLCCs in the UK Continent was hampering further arbitrage movements to Singapore.

“There are hardly any ships available in the West at the moment. Several ships got taken to the Caribbean which has restricted tonnage in the UK Continent. There are only one or two ships that could do Rotterdam loads in the next month,” said a shipbroker.

This tightness in tonnage led sources to predict that any new Rotterdam-Singapore VLCC fixtures would command a higher freight rate, with rates pegged in the $4.6-5 million lump sum range.

Platts assessed rates on the UK Continent-East route, basis 270,000 mt, up $200,000 at $4.8 million.

There have been several reports of arbitrage fixtures from Rotterdam to Singapore in October, although some of these failed to get their subjects.

Litasco was heard to have fixed the Al Yarmouk to load on October 25. Platts ship-tracking software cFlow shows the vessel to be currently moored at Rotterdam.

Vitol was heard to have booked the DHT Ann for Rotterdam-Singapore loading October 24, and was also reported to have taken the Universal Prime for the same voyage on similar dates.

“The DHT Ann got fully done but Vitol released the Universal Prime,” said a shipbroker.

According to cFlow, the DHT Ann is currently moored at Rotterdam while the Universal Prime is travelling north in the Atlantic Ocean towards Antifer in France.

Repsol was heard to have put the Front Kathrine on subs for Rotterdam-Singapore with an October 17-20 laycan.

But shipping sources say this vessel failed to get fully fixed.
Source: Platts