Bunker prices on the decline since the start of 2014
Time：2014-05-06
Browse：110
Global benchmark grade Singapore 380 cst high-sulphur fuel was indicated at $587 per metric tonne on Friday, according to data from Ship & Bunker.
Prices for the bunker grade have fallen steadily since $615.50 per metric tonne at the start of this year. The Singapore 380 cst price rose to a high of $628.50 per metric tonne on 30 January before falling 7.4% to $582.50 per metric tonne on 3 April.
Last Friday’s bunker price was 3.1% lower compared to $606 per metric tonne recorded on the same day of 2013, the data showed.
Price volatility, a hallmark of bunker prices, has also been mild over the course of this year as price fluctuations were limited to a $10 gap.
Singapore-based bunker traders noted that bunker fuel sales have been rather active recently, and demand is expected to continue to pick up due largely to the softening market. The stockpile of fuel has also increased, creating adequate supplies into the market, traders said.
“There have been quite a number of cargoes ordered at the end of last month and early this month, and fuel availability appears to be healthy in this [Asian] region,” a trader told Seatrade Global. Traders, however, cautioned that there were no major indications to show that bunker prices will continue a downward trend in the long run.
The softening of bunker prices this year to-date, even if shortlived, would be a welcome relief for operators and charterers, whom have been troubled by high fuel prices for the last few years. Bunker fuel prices typically account for at least 30% or a high of 70% of a vessel’s single voyage operating expenditures, significant enough to slash the already slim profit margin for operators amid the low freight rate environment.
While Singapore 380 cst fuel prices have been softening, prices for the low-viscosity marine gas oil (MGO) grade were lacking a clear direction. Singapore MGO prices started climbing upward since the beginning of 2014, reaching $936.50 per metric tonne on 3 March before plunging to $906.50 per metric tonne on 19 March, according to Ship & Bunker’s data.
The MGO market continued to display wild swings, with prices touching $935 per metric tonne last Monday, before plunging to $919 per metric tonne last Thursday and rebounding to $923.50 per metric tonne last Friday.
Meanwhile, Asia’s bunker market is expected to continue its tame mood this week, with South Korea and Japan both observing a public holiday on Monday, putting bunker sales on hold.