Weak demand keeps lid on Japan 380 CST bunker fuel premium over Singapore

The Japan 380 CST delivered bunker fuel differential over the Singapore 380 CST delivered bunker price at $24/mt Friday was still hovering at lower levels compared to a peak of $64.50/mt on April 8, due to weak spot demand, market sources said Monday.

Platts assessed Japan 380 CST delivered bunker fuel at $356.50/mt Friday and Singapore at $332.50/mt.

“Normally and historically, Japan’s premium is about $40/mt over Singapore’s prices,” a Japan-based trader said.

“Japanese bunker demand was particularly weak over mid-April [to] May, but showed some improvement in June when supply tightened,” another trader in Japan said.

Premiums, however, began its decline again on June 25.

The spread between Japan and Singapore prices has yet to return above $40/mt since end-April, according to Platts data.

Competition among Japanese suppliers pushed prices down in May, traders said.

Some Japanese players have also been trying to sell stock that was accumulated during the low-demand months, one of the traders said.

Inquiry levels in Japan were few and volumes for spot demand remained small early July.

“We receive about three to four inquiries a day, for small volumes of 200-300 mt. We seldom see more than 1,000 mt,” a Japanese trader said.
Source: Platts