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Bunker sales average lower at about 583,000 tonnes/month in Q1
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HSFO uptake slows amid narrowing discount to LSFO
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Demand could have been partly diverted to Khor Fakkan -sources
By Jeslyn Lerh SINGAPORE, April 18 (Reuters) - Sales of marine fuel, also known as bunker fuel, slid for a third straight month at the UAE's Fujairah to hit fresh lows in March, showed latest Fujairah Oil Industry Zone data that commenced publishing in 2021.
Bunker sales at Fujairah provide a gauge of shipping market sentiment as Fujairah is the world's third largest bunkering port, as well as a key transit and blending hub for oil products in the Middle East.
Total bunkering volumes, excluding lubricants, fell to 559,800 cubic metres (about 555,000 tonnes) in March, based on data from the Fujairah Oil Industry Zone published by industry information service S&P Global Commodity Insights. The decline was led by a sharp fall in high-sulphur bunker sales, which fell 49% month-on-month to 81,058 cubic meters (about 80,000 tonnes).
Meanwhile, sales of low-sulphur fuel oil rose 16.1% from last month to 478,742 cubic meters (about 474,000 tonnes), though the slump in HSFO sales outweighed the uptick. This brought the market share of low-sulphur bunkers to 86% and of high-sulphur bunkers to 14% in March, versus 72% and 28% in February, respectively.
A narrower price gap between 0.5% low-sulphur fuel oil (LSFO) and 380-cst high-sulphur fuel oil (HSFO) could have slowed HSFO uptake, as the discount of HSFO to LSFO is now less attractive, Refinitiv data showed.
Known as the Hi-5 spread, the price difference between 0.5% VLSFO and 380-cst HSFO held at 18-month lows of about $122 a tonne, based on Refinitiv data this week. Meanwhile, some bunkering demand could have been diverted away from Fujairah to Khor Fakkan this year. Prices were nearly $5 a tonne cheaper at Khor Fakkan compared to Fujairah last month, said Dubai-based trade sources. Bunker sales at Fujairah averaged at about 583,000 tonnes a month in Q1 2023, down from about 644,000 tonnes in the same period last year, data showed.
Fujairah bunker sales by month in cubic metres, excluding lubricants:
Month Total Sales M-o-M Y-o-Y
Jan-22 646,089 -7.4% -4.3%
Feb-22 612,388 -5.2% -3.0%
Mar-22 691,141 12.9% 9.9%
Apr-22 664,870 -3.8% -1.4%
May-22 745,064 12.1% 11.6%
Jun-22 647,184 -13.1% -2.8%
Jul-22 665,128 2.8% -3.0%
Aug-22 723,418 8.8% 2.9%
Sep-22 667,878 -7.7% 5.0%
Oct-22 655,126 -1.9% -15.6%
Nov-22 636,688 -2.8% -13.1%
Dec-22 694,390 9.1% -0.5%
Jan-23 633,023 -8.8% -2.0%
Feb-23 572,371 -9.6% -6.5%
Mar-23* 559,800 -2.2% -19.0%
Monthly bunker sales by grade in cubic metres:
Month 180cst LSFO 380cst LSFO 380cst HSFO MGO LSMGO Lubricants
Jan-22 288 497,670 119,747 1,215 27,169 5,341
Feb-22 150 462,035 125,389 1,395 23,419 5,234
Mar-22 369 527,677 129,293 1,096 32,706 5,469
Apr-22 1,084 512,565 116,621 1,873 32,727 5,193
May-22 453 555,151 154,721 1,087 33,652 5,713
Jun-22 372 482,926 132,690 1,287 29,909 5,036
Jul-22 262 518,374 112,223 1,032 33,237 4,864
Aug-22 528 549,205 142,548 1,607 29,530 4,869
Sep-22 589 508,277 128,515 1,210 29,287 5,269
Oct-22 984 481,052 141,780 1,164 30,146 4,269
Nov-22 1,594 476,746 129,528 903 27,917 3,904
Dec-22 1,494 500,082 159,566 899 32,349 4,715
Jan-23 300 453,703 151,055 796 27,169 4,039
Feb-23 545 389,544 159,908 713 21,661 4,549
Mar-23* 250 451,405 81,058 538 26,549 3,475
(Data from the Fujairah Oil Industry Zone published by S&P Global Commodity
Insights)
(Reporting by Jeslyn Lerh; Editing by Rashmi Aich)
