Singapore May bunker sales hit over 5-year high as vessel arrivals spike
(Reuters) - Monthly sales of marine fuel, also known as bunker fuel, hit over five-year highs at the world's largest refueling hub Singapore in May as vessel arrivals spiked amid firm container throughput, official data showed on Wednesday.
Singapore's bunker sales are an indicator of sentiment at one of the world's major ports and demand also affects fuel oil refining margins in Asia.
Sales extended gains for a third consecutive month to 4.52 million tons, up 6.2% month-on-month, Singapore's Maritime and Port Authority data showed.
The monthly sales figures were last higher in January 2018 at 4.61 million tons, historical data showed.
The uptick reflected higher vessel calls for bunkering, which totaled 3,631 calls in April, extending gains for a third straight month.
"Both container and bulker arrivals by gross tonnage are at their highest since 2010.
There is also a sharp jump of container ships going to China in May," said Yaw Yan Chong, director of Refinitiv Oil Research in Asia.
"We believe that much of the record high container arrivals are en-route to China after taking bunkers here," Yaw added.
Bunker prices remained more competitive at Singapore in May compared to other regional ports in Asia, which drew more ships to refuel at Singapore in recent months, trade sources said.
"Singapore VLSFO prices were more competitive versus Zhoushan in May and continue to be cheaper than Zhoushan in June to-date," said Ivan Mathews, FGE's head of Asia refining and global fuel Oil services.
That said, the tighter VLSFO situation in Singapore could narrow the discount versus Zhoushan and slightly pressurize VLSFO sales this month, Mathews added.
Sales of low sulfur fuel oil grades totaled 2.73 million tons in May, climbing 1% from April, calculations based on the MPA data showed.
Meanwhile, sales of high sulfur fuel oil grades rose 18% from April to 1.40 million tons in May, while marine gasoil sales rose 4% month-on-month at 340,400 tons.
Some bunker traders were surprised by the data, saying that the volumes turned out to be stronger than expected.
“We did not see that big jump (in volumes) on our end, although demand was definitely not less than April," a senior bunker fuel trader in Singapore said.
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