Regional supply of marine fuel 0.5% is set to tighten from the first trading week of October amid refinery unit turnarounds in South Korea and Japan, although supply at ports was still assured, bunker suppliers in both countries said.
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The December ICE Brent futures contract was trading at $79/b in mid-morning trade in Asia at 0315 GMT Oct. 4, up from $77.91/b at 0830 GMT Oct. 1, Intercontinental Exchange data showed.
Marine Fuel 0.5%
** The discussion level for the Singapore Marine Fuel 0.5%S balance-October/November spread was stable in mid-morning trade Oct. 4 from the Oct. 1 assessment at $1.50/mt, with offers at $3.75/mt against no bids.
** Ex-wharf premiums for Hong Kong 0.5%S marine fuel bunker for October-loading cargoes were concluded at $20-$25/mt to FOB Singapore Marine Fuel 0.5 %S assessments, slightly lower than for September, which were concluded at $25-$27/mt on ample supplies and average demand.
** South Korea's marine fuel 0.5%S bunker supply is expected to tighten slightly in October due to refinery maintenance. SK Energy has scheduled maintenance at one of the 90,000 b/d residue desulfurization units at its 840,000 b/d Ulsan refinery for around 20 days, while Hyundai Oilbank has a 15-day turnaround scheduled at one of the 45,000 b/d RDUs at its Daesan refinery.
** Ex-wharf offers at Zhoushan have surged to premiums of $12-$13/mt to FOB Singapore Marine Fuel 0.5%S cargo as domestic supply in China tightens on the back of lower production of marine fuel 0.5%S due to refiners favoring more profitable gasoil production.
** Zhoushan and Shanghai are set for a quiet week as China celebrates Golden Week, with some barges halting operations for the holidays, traders said.
** China's Oct. 1-7 holiday could dampen bunker demand; inquiries from China-bound vessels dipped Oct. 1.
** Amid high freight rates, shipowners were willing to pay more for delivered marine fuel 0.5%S at Zhoushan rather than deviating to Singapore unless the discount widened further, resulting in below-average demand in Singapore, industry sources said. "Bulk carriers are still skipping bunker-only calls in Singapore and bunkering at Zhoushan instead," a Singapore-based bunker supplier said.
** The discount of Singapore-delivered marine fuel 0.5%S against the delivered grade at Zhoushan averaged $4.60/mt in the week ended Oct. 1 and $1.40/mt the week before, Platts data showed.
High sulfur fuel oil
** Discussions for the Singapore 380 CST HSFO November-December spread dipped to $5.75/mt in mid-morning Asia trade Oct. 4 from the assessment of $6.25/mt Oct. 1. Offers stood at $6/mt against no bids.
** Latest term contract supplies of Singapore ex-wharf 380 CST HSFO for October were concluded at $14-$18/mt over the FOB Singapore 380 CST HSFO cargo assessment, traders said, amid tight inventories and above the $10-$14/mt premium inked for term supply in September.
** Heavy distillates stocks fell 3.7% on the week to 6.724 million barrels, the lowest since December 2018, despite total oil product stocks rising 3.6% over the same period to 15.533 million barrels, Fujairah Oil Industry Zone data released Sept. 29 showed.
** Fujairah bunker sales concluded lower for September than August, with tepid demand for low sulfur fuel oil bunkers estimated to pare volumes down 5%, traders said.