Record sales in Singapore
In May, Singapore, the world’s largest marine fuel hub, experienced a significant increase in monthly sales as vessel arrivals soared due to strong container throughput. Data indicates that sales reached their highest level in more than five years, making Singapore a key barometer for gauging sentiment at one of the world’s major ports.
The Rise in Marine Fuel Sales
Bunker sales rose by 6.2% month-on-month, marking the third consecutive month of growth and reaching a staggering 4.52 million tonnes. This level of bunker sales was last observed in January 2018, when it reached 4.61 million tonnes. The increase is attributed to an uptick in vessel calls for bunkering, with a total of 3,631 calls in April.
High Demand and Competitive Pricing
The increase in sales is due in part to a surge in vessel arrivals by gross tonnage across both container and bulk carriers, reaching their highest levels since 2010. Yaw Yan Chong, Director of Refinitiv Oil Research in Asia, points out that there has been a sharp increase in the number of container ships destined for China. Many of the record-high container arrivals are en route to China after taking bunkers in Singapore, as bunker prices in the region continue to be more competitive than other ports.
Singapore v. Zhoushan
In recent months, competitive prices have drawn more ships to refuel in Singapore compared to other regional ports in Asia. Ivan Mathews, FGE’s Head of Asia Refining and Global Fuel Oil Services, highlights that the prices of very low-sulfur fuel oil (VLSFO) in Singapore were more favorable than in Zhoushan in May and remain cheaper in June. However, a tightening VLSFO supply in Singapore could potentially narrow the price gap and exert slight pressure on sales in the coming month.
A Breakdown of Fuel Oil Sales
Low-sulfur fuel oil grades registered sales totaling 2.73 million tonnes in May, which represents a 1% increase from April. High-sulfur fuel oil grades, on the other hand, surged 18% from April, reaching 1.40 million tonnes in May. Sales of marine gasoil saw a modest increase of 4% month-on-month, accounting for 340,400 tonnes.
Stronger-than-expected Sales Performance
The sales volumes turned out to be stronger than anticipated, which surprised some bunker traders. A senior bunker fuel trader in Singapore remarked that, although the figures were not consistent with their observations, the demand was unmistakably greater in May than in April.
