Singapore LNG bunker sales post fresh highs in June

Market: Natural gas, Oil products
15/07/24

Demand for alternative marine fuels rose further in June at the port of Singapore, with LNG demand for bunkering touching fresh highs.

Total bunker sales in June rose by 8.7pc from a year earlier to 4.27mn t, according to preliminary data from the Maritime and Port Authority of Singapore (MPA), lifted by a 2.7pc increase in vessel throughput in Singapore to around 10.11mn in June. But sales slipped by 11pc from a strong May.

"It is [lower] LNG prices versus fuel oil prices, along with higher fuel demand, due to the longer passage through the Cape, [and] that is playing an important role," said a key Singapore-based LNG bunker supplier, referring to the increased demand from the rerouting of vessels because of attacks on shipping in the Red Sea region.

Demand for bunkering LNG has increased this year, with Singapore recording 175,030t of LNG used to fuel ships in the first half of this year. This is more than a threefold increase from the same period last year when 36,900t of LNG was bunkered in Singapore.

Demand for biofuel blends in the first half increased by 46.7pc versus the same period last year. January-June sales were 280,160t compared with 191,000t a year earlier.

The blend of 76pc very-low sulphur fuel oil (VLSFO) and 24pc used cooking oil methyl ester, also known as B24, has been the first choice of alternative fuel among shipowners in Singapore, partly because of its drop-in character.

Increased enquiries emerged for B24 in Singapore since April-May this year, with short-term tenders going to key shipowners planning voyages to Europe.

"There are customers taking more volumes in H2 2024. Volumes wise [for the year, this] might not see a huge increase [but we] will just see more customers," said an international trader.

Consumption of conventional bunker fuels has remained largely steady in Singapore, with the exception of high-sulphur fuel oil (HSFO) where sales for June rose by 26pc compared with a year earlier to 1.56mn t. There was a 29pc increase for January-June this year against the 2023 equivalent.

Firmer demand has continued for lower priced HSFO, particularly for vessel owners hoping to maximise the use of installed exhaust scrubber systems in handling alternative marine fuels.

VLSFO consumption was down by 2pc in the first six months of 2024 versus the same period in 2023, with overall demand largely unchanged. Supplies have been higher in Singapore from this year's second quarter, which is expected to remain in the short term, said industry participants.

Red Sea diversions

Singapore has absorbed 40pc of the increased demand created by the Red Sea disruptions, data from the International Bunker Industry Association show. Demand in Singapore rose to 4.62mn t/month in this year's first quarter from 4.23mn t/month in 2023.

Container terminals in Singapore were congested in the first half of the year because of Red Sea voyage rerouting. Container throughput at the city-state grew by 6.4pc from a year earlier in the first half of 2024 to 20.25mn 20ft equivalent units (TEUs) by June, according to the MPA. Singapore in May recorded a 7.7pc year-on-year increase to 16.9mn TEUs, said Singapore's transport minister Chee Hong Tat.

Tonne-mile demand for tanker vessels is expected to grow this year. Greek crude tanker owner Okeanis Eco Tankers forecasts tonne-mile demand to grow by 5.6pc in 2024 and by a further 5.5pc in 2025.

By Cassia Teo, Sean Zhuang and Mahua Chakravarty

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