信德海事网-专业海事信息咨询服务平台
  >  MARKET

LSFO prices fall as supply tightness eases


Low sulphur fuel oil prices dropped for six consecutive trading days and currently stand at around $670 per tonne in Singapore. The decline in LSFO price is partly driven by the easing supply tightness and partly due to cooling demand.
 
There is no official data showing the level of low sulphur fuel supply in Singapore. However, rising floating storage points to increasing supply of the compliant fuel. Having fallen to its lowest levels since June last week, LSFO/ULSFO floating storage was up by 400,000 tonnes to 1.81 million tonnes on Monday.
 
That said, prices are unlikely to drop much further as demand is expected to increase in the coming weeks. We understand that buyers are now sufficiently covered for their January requirements. That has eased the pressure on stock draws over the past few days and dragged prices lower.
 
However, buyers are expected to return to the market soon to negotiate February stems. That is likely to boost demand again.
 
While demand is likely to recover, the region is expected to remain short of supply. According to Refinitiv estimates, Asia-Pacific exports of LSFO are currently running at around 2.9mt per month with an additional 300,000 tonnes per month of export capacity scheduled to come online in 1H20. By contrast, regional demand is estimated at 4.4 million tonnes per month.
 
With strong demand and short supply, low sulphur fuel oil prices are likely to remain high in the near future. When the market reaches an equilibrium will depend on how quickly the refining industry can ramp up its production of compliant fuels.
 
Source:Arrow

The opinions expressed herein are the author's and not necessarily those of The Xinde Marine News.

Please Contact Us at:

admin@xindemarine.com


Ctrl+D 将本页面保存为书签,全面了解最新资讯,方便快捷。