Around the port of Melbourne in Australia, stronger bunker demand for high sulfur fuel oil has tightened prompt product availability and also limited barging schedules amid the peak cruising season in full swing around the region, traders said Nov. 22.
Owing to stronger cyclical HSFO demand from scrubber-fitted cruise liners, buyers sourcing for spot requirements could expect extended lead times for the rest of November, with earliest slots reportedly around the early to mid-December window.
“Due to lack of HSFO availability, and LSFO [bunker] prices competitive enough compared to HSFO, demand for LSFO seems healthy too,” an Australia-based bunker trader said on Nov. 22, citing narrow spreads between the delivered HSFO and LSFO prices around Melbourne.
Platts, part of S&P Global Commodity Insights, assessed the Melbourne-delivered marine fuel 0.5%S bunker premiums to the benchmark FOB Singapore Marine Fuel 0.5%S cargo value to average at $259.44/mt across Nov. 1-21, above the $241.90/mt for all of October.
“There’s limited supply ports most due to seasonal peak HSFO demand, so most customers take LSFO instead, or others taking extra marine gasoil, rather than dragging on trying to source for HSFO,” the trader also said.
Moreover, with cruise ships nominating a quantity range, suppliers would have to allocate the maximum quantity for these orders, which is less favorable given the already tight HSFO supply conditions.
Although LSFO demand around Melbourne was seen mostly steady, supply conditions are mostly “holding well”, despite some momentary supply crunch as suppliers await replenishment imports, bunker suppliers said.
Platts assessed the Singapore marine fuel 0.5%S cargo’s cash differential over the Mean of Platts Singapore marine fuel 0.5%S assessment at an over three-month low of $4.89/mt Nov. 21, down 73 cents/mt day on day.
Singapore’s LSFO cash premiums also progressively lowered to an average of $5.69/mt since H2 November, down from $9.49/mt in the first half of November, and below the $8.55/mt for all of October.
Fremantle’s barge resumes operation
The sole bunker barge servicing downstream refueling operations at the port of Fremantle and Kwinana around the Western Australia region has reportedly resumed operations recently over the past weekend, returning from drydock for maintenance since early September.
The Australia-flagged barge, Absolute I, comprising a deadweight tonnage of around 8,646 mt, is capable of loading three different grades of fuel on board, was initially expected to begin refueling operations early in the previous week of Nov. 11-15, but unforeseen delays had slightly extended its resumption date, according to market sources.
The barge first started downstream bunker deliveries in April 2020, mostly for buyers’ LSFO and marine gasoil requirements.
While the bunker barge was not operational in the past couple of months, marine gasoil requirements around Fremantle were met by truck deliveries.
In the absence of ‘Absolute I’, the nearest LSFO refueling option would be Melbourne, which would require an additional four to five voyage days.
The region’s inner harbor handles the bulk of container trade volumes across all of Western Australia, whereas its outer harbor boasted one of Australia’s major ports for both wet and dry bulk cargo handling, according to the Fremantle port’s official webpage.
Source: S&P Global
