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Platts new 0.5% marine fuel assessment hits $366.18/mt in Singapore

London — S&P Global Platts assessed FOB Singapore Marine Fuel 0.5% at $366.18/mt Wednesday as part of its worldwide launch of pricing assessments for the low sulfur fuel ahead of next year's new 0.5% limit on sulfur content.

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The assessment for Marine Fuel 0.5% was $40.25/mt higher than 380 CST HSFO, currently the dominant fuel used by ships around the globe.

Cargoes of 0.5% sulfur content marine fuel were bid and offered on an FOB Singapore basis in the Platts Market on Close assessment process Wednesday, the first day Platts began publishing this information through its eWindow platform.

The assessment was in line with published notional values in the absence of any competitive bids or offers demonstrating value otherwise.

As of 0700 GMT, Platts published notional value for FOB Singapore Marine Fuel 0.5% cargoes for January 17-February 1 loading at a premium of $44.50/mt to the Mean of Platts Singapore 380 CST HSFO, equivalent to about $371/mt.

Platts assessment for Marine Fuel 0.5% material on an FOB Singapore basis takes into consideration bids, offers and transactions reported in the MOC as well as trades in similar-quality material within the region.

BP submitted a bid for 20,000 mt of Marine Fuel 0.5% on an FOB Singapore basis for January 22-26 loading at $335/mt before lowering this to $332/mt. The energy group also offered a similar volume of Marine Fuel 0.5% for January 22-26 ship-to-ship loading from its floating storage unit Grace Star at $395/mt.

Mitsui Energy Trading Singapore also offered 20,000 mt of Marine Fuel 0.5% for January 27-31 ship-to-ship loading from its floating storage unit Energy Star at a premium of $75/mt to the average of Mean of Platts Singapore balance January 180 CST high sulfur fuel oil assessments.

All bids and offers expired at the end of the MOC process at 1630 SGT and there were no trades reported.

The assessment reflected a premium of $44.50/mt to the Mean of Platts Singapore 380 CST high sulfur fuel oil. The assessment was equivalent to at a premium of $41.99/mt to MOPS 180 CST HSFO -- a key benchmark for low-sulfur material traded in the region.

A relatively narrow spread between FOB Singapore Marine Fuel 0.5% and FOB Singapore 380 CST HSFO reflects current thin demand for the compliant fuel before its use becomes mandatory from January next year.

Platts launched daily cargo and barge assessments for "Marine Fuel 0.5%" reflecting residual marine fuels with a maximum sulfur limit of 0.5% at key ports across the globe starting January 2, 2019.

The launch of these assessments comes 12 months before the planned introduction of new sulfur limits in marine fuels by the International Maritime Organization from January 1, 2020.

Platts new assessments reflect specifications for RMG fuels as defined by the International Organization for Standardization in document ISO 8217:2010 Petroleum products - Fuels (class F) - Specifications of marine fuels, but with a sulfur cap of 0.5%.

The new assessments reflect existing parameters for volume, delivery period, size and pricing basis for HSFO cargoes in Singapore and Fujairah.

--Rajesh Nair, rajesh.nair@spglobal.com

--Edited by Jonathan Loades-Carter, jonathan.carter@spglobal.com