Bunker price volatility grips market in first half of 2014
Time：2014-07-08
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The global benchmark Singapore 380 cst grade closed at $609.50 per metric tonne (pmt) on 30 June 2014, not too far off from $615.50 pmt recorded about six months ago on 2 January this year, according to data from Ship & Bunker. But the highs and lows over the six-month period reflected the unpredictability of the market, and prices have remained at costly levels for shipowners even during brief periods of market lows.
The scare to bunker purchasers came early in the year in January when Singapore 380 cst prices climbed steadily to $628.50 pmt, closing in onto the high of $638 pmt registered in January 2013.
The market, fortunately for owners, took a dive and declined for two months before hitting a six-month low of $582.50 pmt on 3 April. A short period of rebound followed as prices moved up to a relatively stable level of about $590 pmt from mid-April to mid-May.
The upward trend came again as Singapore 380 cst prices jumped to $598.50 pmt on 19 May and continued inching up to $602 pmt on 26 May. Apart from a few days of market dips during the last week of May, the market rebounded strongly to $609.50 pmt on 13 June and surged again to $621.50 pmt on 23 June, representing the second highest point during the six-month period.
Relief for shipowners followed as the market softened steadily to $609.50 pmt on 30 June, and it remains to be seen how the second half of the year would unfold.
Buying sentiments in the bunker market, meanwhile, have been largely weak even as prices have tumbled, according to Singapore-based bunker traders.
Shipowners have held back from confirming their bunker stems as prices crept up over the last couple of months, and the more cautious buyers continued to stay on the sidelines despite the weakening market in the past week, traders observed.