A delay in shipments to Hong Kong-based suppliers was putting the Hong Kong bunker fuel market under increasing pressure, traders said.
The shortage stemmed from shipment delays amid severe weather in Northeast Asia over the past two weeks due to Typhoon Lan and Typhoon Saola affecting bunkering and port operations.
Market participants expect the tightness to persist until mid-November.
“The storage tanks of the major suppliers have dried up and suppliers are severely short on cargo and are unable to meet contractual obligations,” a Singapore-based trader said Thursday, adding that many terminals have experienced congestion.
“Many suppliers are rationing their stock and keeping availabilities for term customers,” another trader said.
The shortage of low sulfur marine gasoil supply was heard to be more severe than for 380 CST bunker fuel and 180 CST bunker fuel.
“380 CST bunker fuel is less tight on supply than LSMGO, but it is still bad nonetheless,” a Hong Kong-based trader said Thursday.
Despite the tightening supply, bunker fuel prices fell Thursday tracking a sharp retreat in crude on the day.
At the Asian close Thursday, LSMGO for delivery in Hong Kong was assessed at $547/mt, down $7.50/mt from Wednesday. The fall tracked a decline in the Asian gasoil market, which the marine gasoil sector typically tracks. The benchmark Asian gasoil physical assessment was $70.45/b Thursday, down $1.60/b or the equivalent of $11.92/mt from Wednesday.
380 CST bunker fuel for delivery in Hong Kong was assessed down $2.50/mt day on day at $372/mt Thursday amid a decline in the Asian fuel oil market, which the bunker fuel sector typically tracks. The benchmark Asian 380 CST fuel oil physical assessment was $356.41/mt Thursday, down $6.03/b day on day.
Source: Hellenic Shipping News.