Marine fuel sales in Singapore, the world's largest bunker port by volume, hit an all-time high of 3.33 million tonnes for March due to record-high vessel arrivals by tonnage, official data showed on Tuesday.
Traders said heavy supplies have depressed the market in Singapore, with March average bunker premiums, or the price differential between ex-wharf bunker and fuel oil cargo values, averaging at $1.47 a tonne, well below last year's average of $6.88, Reuters data show.
"The market here has been depressed by heavy supplies last month and this has drawn more vessels to call at Singapore, versus other regional ports such as Hong Kong, South Korea and Japan," a Singapore-based Asian trader said.
"Also, Fujairah prices were very high last month, at premiums of above $10.00 a tonne to Singapore levels, and this has also drawn tankers to pick up their fuel supplies here."
The March volumes were up 10.1 percent from a month ago and higher by 6.4 percent compared to the same month last year.
Vessel arrivals, by tonnage, were also at a record high of 159 million gross tonnes (GT), up 9 percent from February and about 4.0 percent higher versus March 2009, with tankers, containers and bulk carriers making up most of the arrivals.
Reflecting the higher bunker prices at Fujairah, a tanker hub, arrivals into Singapore hit near all-time highs of 48 million GT, just 0.3 percent lower than the record high in August last year.
Traders expect April volumes to be comparable or slightly lower, as supplies into Singapore remain high, pressuring sellers, but Fujairah prices have since fallen to $1.00-$2.00 a tonne above Singapore, down from above $10.00 for most of March.
As of Monday, the average bunker premium for this month stood at 78 cents a tonne.
The heavy cargo arrivals for March and April, at six-month high volumes of above 3.5 million tonnes for each month, have driven 380-cst cargo differentials into discount since the start of February, and at a discount deeper than $2.00 a tonne for over a month.
"Actually the bunker market, which has held in positive territory, has shown resilience against the fall in cargo differentials, which have been in discount for two months," another trader said.
"That's because the market is flooded with high-viscosity barrels and does not have sufficient cutters to blend them into on-spec 380-cst."
Traders expect the imbalance to improve next month, as total arrivals for May has decreased, with 2.8-2.9 million tonnes booked so far; down from 3.7-3.8 million tonnes for April.
Also, there are more viscosity cutters in the arrival pool and that has been reflected by a narrowing viscosity spread, which has seen its May swap value fall to around $9.00 a tonne, versus March's average cash settlement value of $10.60.
Traders said heavy supplies have depressed the market in Singapore, with March average bunker premiums, or the price differential between ex-wharf bunker and fuel oil cargo values, averaging at $1.47 a tonne, well below last year's average of $6.88, Reuters data show.
"The market here has been depressed by heavy supplies last month and this has drawn more vessels to call at Singapore, versus other regional ports such as Hong Kong, South Korea and Japan," a Singapore-based Asian trader said.
"Also, Fujairah prices were very high last month, at premiums of above $10.00 a tonne to Singapore levels, and this has also drawn tankers to pick up their fuel supplies here."
The March volumes were up 10.1 percent from a month ago and higher by 6.4 percent compared to the same month last year.
Vessel arrivals, by tonnage, were also at a record high of 159 million gross tonnes (GT), up 9 percent from February and about 4.0 percent higher versus March 2009, with tankers, containers and bulk carriers making up most of the arrivals.
Reflecting the higher bunker prices at Fujairah, a tanker hub, arrivals into Singapore hit near all-time highs of 48 million GT, just 0.3 percent lower than the record high in August last year.
Traders expect April volumes to be comparable or slightly lower, as supplies into Singapore remain high, pressuring sellers, but Fujairah prices have since fallen to $1.00-$2.00 a tonne above Singapore, down from above $10.00 for most of March.
As of Monday, the average bunker premium for this month stood at 78 cents a tonne.
The heavy cargo arrivals for March and April, at six-month high volumes of above 3.5 million tonnes for each month, have driven 380-cst cargo differentials into discount since the start of February, and at a discount deeper than $2.00 a tonne for over a month.
"Actually the bunker market, which has held in positive territory, has shown resilience against the fall in cargo differentials, which have been in discount for two months," another trader said.
"That's because the market is flooded with high-viscosity barrels and does not have sufficient cutters to blend them into on-spec 380-cst."
Traders expect the imbalance to improve next month, as total arrivals for May has decreased, with 2.8-2.9 million tonnes booked so far; down from 3.7-3.8 million tonnes for April.
Also, there are more viscosity cutters in the arrival pool and that has been reflected by a narrowing viscosity spread, which has seen its May swap value fall to around $9.00 a tonne, versus March's average cash settlement value of $10.60.