The premium which delivered Marine Fuel 0.5% bunker commands over the Mean of Platts Singapore marine fuel 0.5% FOB cargo assessment spiked to $119.68/mt at the Asian close Tuesday, the highest to-date since Platts started assessing IMO-compliant Marine Fuel 0.5% bunker assessments at key global ports on July 1, 2019, S&P Global Platts data showed.
The delivered premium widened by $25.70/mt or 27.4% from Monday on the back of growing demand for the IMO-compliant bunker fuel as the industry speeds towards the January 1, 2020 start date to the changes in the IMO regulations.
The premium was last highest at $93.98/mt on Monday and was first assessed at $40.78/mt on July 1, Platts data showed.
Demand for low sulfur marine fuel is expected to further strengthen across key Asian ports starting this quarter as IMO 2020 nears, market sources said.
During the Platts Market on Close assessment process on Tuesday, Japanese fuel oil and bunker trader Mitsui and Co. Petroleum had bid for 1,300-1,500 mt of Marine Fuel 0.5% for delivery over October 6-8 at $573/mt.
The bid remained standing at the close of the MOC process. Platts had assessed the delivered 0.5% bunker grade at Japan at $573.25/mt Tuesday, up $13/mt day on day, Platts data showed.
Market activity in low sulfur marine fuel has been gradually emerging in recent weeks at Japan.
Mitsui and Co. Petroleum and Toyota Tsusho will start supplying 0.5% sulfur bunker fuels this month as demand for cleaner fuels accelerates, Platts had earlier reported.
“Our first LSFO delivery will be this week, latest on October 5. It will be delivered at Osaka/Kobe, West Japan. The volume is 300-400 mt,” a company source at Mitsui told Platts this week.
Toyota Tsusho will also be supplying 0.5% sulfur bunker fuels at Japan from mid-October onwards.
While current demand for LSFO is mainly from major Japanese shipowners who had secured term contracts, spot market fundamentals were likely to remain robust, the sources said.