SINGAPORE - Sales of marine fuel in Singapore dipped in September as fewer vessels called at the world’s largest bunkering hub to refuel.
Sales fell for the first time since June to 3.97 million tonnes, down nearly 4 per cent, according to data released by the Maritime and Port Authority of Singapore (MPA) on Thursday.
Vessels calling specifically to bunker in the Republic fell to 3,155, nearly 2 per cent lower than in August.
Mr Roslan Khasawneh, a senior analyst at data analytics firm Vortexa, said that while prices were lower for September, demand contracted as shipowners opted to be more conservative in their procurement programmes due to the gloomier economic outlook.
He added: “While tanker and dry bulk freight rates improved in September, container rates continued their long way down from record highs earlier in the year.”
A senior marine fuels trading manager with a large private trading firm said a number of shipowners were opting to refuel in China due to the lower prices being offered there.
“We did see container vessels looking to buy low-sulphur bunkers choosing to load in China, as the prices there were at least US$10 to US$15 (per tonne) lower than Singapore’s,” he said.
“They are able to do this because they are also refining cheaper crude that allows them to lower their prices, so maybe this is something we should expect as we go into the final quarter of the year.”
Mr Yaw Yanchong, director of oil research at Refinitiv, a unit of the London Stock Exchange Group, said low-sulphur marine fuel prices have been lower in China because of the record production of the cleaner shipping fuel by refiners there.
He said: “Low-sulphur bunker prices in China are competitive versus Singapore prices, because the domestic production from their local refiners have been at record-high levels for each of the three months from June to August.”
He added that in August, production levels were around 4.77 million tonnes. In 2021, the monthly average was around three million tonnes.
He said: “China wants to compete on the low-sulphur marine fuels front, but there have been some sporadic disruptions this year because of the lockdowns. Once they get past this, I will expect to see them pulling more volume away from Singapore, at least for the low-sulphur fuel segment.”
According to MPA data, low-sulphur bunker sales for the most common grade was at 1.94 million tonnes, down nearly 6 per cent from August. The year-to-date average of low-sulphur bunker sales for 2022 now stands at 1.91 million tonnes, down nearly 8 per cent from the 2022 monthly average.