Singapore bunker prices eased on Monday in line with weaker outright cargo values. Prices for 380-centistoke (cst) bunker fuel were pegged at $312-$314 a tonne, down $5 from Friday's close. Prices for 180-cst bunker fuel were at $327-329 a tonne, down $8 from Friday's settlement price.
"The slide seen in bunker prices simply reflects suppliers adjusting prices in relation to the fall seen in cargo values, but it doesn't change fundamentals, because the market remains tight as there is a problem sourcing ex-wharf barrels," a trader said.
"Cargo players have been holding their barrels for sale into the cargo market because the premiums there are at record levels and that is putting a squeeze on us," the trader added.
Demand on the day was heard to be moderate, as shipowners came off the sidelines looking to conclude some small requirements in the spot market. However, suppliers offered cautiously.
"This is always the case when prices go up one day and fall off drastically the next, and in a way it's good because even from a supplier's point, we would rather hold back selling into the spot market until we can figure out what is going on with prices," a trader said.
Market players added that at least one major and some prominent independents are concentrating on their term and contractual commitments, reducing their play in the spot market.
Suppliers contend that as supplies tighten on increased Chinese demand and lower fuel oil arbitrage arrivals, the 380-cst bunker premium - the difference between Singapore cargo values and delivered bunker prices - will likely to remain firm.
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