Singapore bunker premiums largely flat ahead of holiday

The delivered premium of the very low-sulphur fuel oil (VLSFO) bunker grade to its cargo price assessments in Singapore is largely rangebound, despite the fast-approaching lunar new year holiday and additional Covid-19 measures imposed on the maritime industry.

The availability of bunker fuel in Singapore has been tightening somewhat over the past week, with suppliers indicating the earliest delivery for larger volumes at around 9 February. The premium of VLSFO bunkers to cargo prices has averaged $11/t so far this month, up slightly from $8/t in December, according to Argus data.

"We expect lots of clogging for CNY [Chinese new year] because of the Covid-19 measures, with rising premiums as a result," a local buyer said.

But most market participants do not expect the usual tightness ahead of the lunar new year holiday, which falls on 12-13 February this year in Singapore, to be necessarily worse than during previous years.

Singapore's Maritime and Port Authority (MPA) has implemented various Covid-19 safety measures for the bunkering and surveying sectors, which some shipowners fear may cause disruptions to operations. Surveyor and cargo officers, for example, are required to undergo periodic polymerase chain reaction (PCR) coronavirus testing, which can lead to downtime for some barges, but this is seen merely as an inconvenience.

"Most barge operators have been running their operations very close to contactless for several months now," said another local buyer.

"Premiums might spike if a Covid-19 cluster emerges at one of Singapore's terminals," said a local seller. A Covid-19 cluster of nine cases was discovered on board the NewOcean6 bunker tanker earlier this month. The vessel was subsequently quarantined and ceased all operations.

Singapore then announced it is aiming to vaccinate its frontline maritime staff, with over 10,000 workers to receive vaccines by the end of January.

"We expect most to be vaccinated by March, which should safeguard operations," a local seller said.

Cargo availability of VLSFO is tight for the first half of February, but not much beyond that. "There is plenty of oil in the market," a local trader said.

By Sammy Six