Singapore Dec bunker sales rebound on IMO rules, despite annual drop: MPA

Singapore

SALES of marine fuels, also known as bunkers, in Singapore hit a four-year low in 2019, but soared in the last month of the year as vessels globally switched to cleaner fuels to meet new emission rules this year, official data showed.

In 2019, bunker sales in Singapore fell 5 per cent to 47.5 million tonnes, data from the Maritime and Port Authority of Singapore (MPA) showed, as regional competition increased, while ships scaling back purchases of high-sulphur fuel towards the year-end also weighed.

However, Singapore bunker sales in December jumped to 4.5 million tonnes to the highest since January 2018 as demand for low-sulphur fuel strengthened in the backdrop of new rules for ship fuel.

The International Maritime Organization (IMO) rules cap the sulphur content of ship fuel at 0.5 per cent unless they are equipped with exhaust-cleaning systems known as scrubbers.

With large stockpiles of IMO-compliant fuels held in and around Singapore, demand for Singapore bunkers in December was boosted by increased bunkering traffic in Singapore due to available and relatively reliable supplies of low-sulphur bunkers, several trade sources said.

A total of 3,829 ships called at the Singapore hub in December, the highest in at least seven years, or as far as available data showed.

Vessels loaded an average of 1,166 tonnes each of bunkers in December, a six-month high, Reuters calculations showed.

But with shrinking supplies and strong demand for very low-sulphur fuel oil (VLSFO), the preferred IMO-compliant fuel, prices of the fuel have soared in recent weeks, surpassing prices of the cleaner and typically more expensive distillate fuels, trade sources said.

Spot cargoes of VLSFO were recently trading at premiums of about US$20 per tonne to Singapore quotes above Singapore cargoes for gasoil with 10 parts per million sulphur content, trade sources said.

As the new rules kick in, Singapore's sales of low-sulphur fuels continued to hit record highs in December.

Total sales of low-sulphur marine fuels came in at 3.1 million tonnes in December, nearly double the 1.871 million tonnes sold in all of 2018, MPA data showed.

This came at the expense of high-sulphur fuel volumes, which fell for a third straight month to 1.3 million tonnes in December, their lowest in at least seven years, data compiled by Reuters showed.

Meanwhile, despite challenging global economic conditions, container throughput at the Port of Singapore hit a record high of 37.2 million twenty-foot equivalent units (TEUs) in 2019, up 2 per cent from 2018, the MPA said. REUTERS