Demand for bigger VLSFO stems high in Singapore

Fossil LNG is over $200/mt cheaper than bio-blends

Subdued gas demand pulls Rotterdam LNG's prices lower

CHART: The dots represent bunker fuel prices adjusted for calorific contents to become VLSFO-equivalents, and with various estimated levels of EU ETS costs excluded (Rotterdam) and included (Rotterdam to non-EU port and Rotterdam to EU port). ENGINE, PRIMA Markets, NYMEX

Rotterdam’s LNG is back at a discount to its HSFO grade after a recent price decline.

When the estimated EU ETS cost is included in the bunker fuel costs for voyages between two EU or EU and a non-EU port, fossil LNG in Rotterdam is $222-232/mt cheaper than its B24-VLSFO blend.

Singapore's LNG offers a staggering $204-209/mt discount to its most popular B24-VLSFO biofuel blend.

Rotterdam’s biofuel price premiums over pure conventional fuels stand at $124/mt for the B30-VLSFO blend and $81/mt for the B30-LSMGO blend.

VLSFO

Rotterdam’s VLSFO benchmark has remained stable in the past week, with only a marginal $3/mt dip. When the price of Dec24 EU Allowances (EUAs) for voyages between two EU ports is added to the VLSFO price, the overall price decreases by $4-5/mt.

Availability of the fuel grade in the port has remained mostly steady in the past few weeks, a source said.

Singapore’s VLSFO benchmark, on the other hand, has increased by $7-8/mt in the past week, depending on whether the price is adjusted with the estimated EUA price for a voyage to an EU port.

Singapore continues to witness a high demand for bigger VLSFO stems. ENGINE recorded 29 VLSFO stems in Singapore in the wide price band of $621-668/mt in the past week. Of these, three 1,500 mt stems were priced between $631-640/mt and 12 stems of sizes 500-1,500 mt were priced between $635-646/mt.

Most suppliers recommend up to 10 days of lead time for the grade, while some can accommodate stems within six days in the port.

Biofuels

Rotterdam’s B24-VLSFO HBE bunker price has remained roughly steady in the past week. The price has inched higher by $3-5/mt, depending on whether the fuel is estimated to be consumed on a voyage to an EU port or not.

PRIMA-assessed palm oil mill effluent methyl ester (POMEME) prices have gained by $13/mt on the week to $1,293/mt. A slight increase in palm oil mill effluent methyl ester (POMEME) prices has supported bio-bunker price gains in Rotterdam. POMEME-based biofuels can qualify for advanced biofuel rebates through the Dutch HBE system.

Singapore’s B24-VLSFO UCOME bunker price has seen a modest $4-5/mt gain to $766-801/mt.

There is a slight improvement in demand for bio-bunkers in Singapore, some sources claim. One supplier notes that some demand has shifted from Rotterdam to Singapore. The port's improved demand seems to have supported the price gain of B24-VLSFO, which is the most sought-after biofuel blend in the port.

LNG      

Rotterdam’s LNG bunker benchmark has dipped lower by $6-8/mt in the past week, depending on whether estimated EU ETS costs are included in the cost of fuel.

The decline mirrors the drop in the front-month NYMEX Dutch TTF Natural Gas benchmark and aligns with abundant gas storage levels in Europe.

Independent Commodity Intelligence Services (ICIS) reports that subdued demand due to reduced gas usage for heating in residential and commercial sectors and an unusually mild winter in some EU countries has added downward pressure on TTF prices.

Singapore’s LNG bunker price has declined by $7-8/mt. The bunker price drops have mirrored a decline of $9/mt in the underlying JKM gas benchmark.

While LNG remains an attractive option for bunkering in Singapore, demand softened slightly last week, a trading source said.

By Konica Bhatt and Erik Hoffmann

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