Asia's front-month viscosity spread, the price differential between front-month 180-cst and 380-cst high-sulphur fuel oil (HSFO) swaps, hit a record low on Tuesday amid ample supplies of low viscosity materials in the Singapore trading hub, traders said.
Weak regional demand for low viscosity, low density materials has diverted cargoes of the residual fuels to the Singapore hub, weighing on prices of the lower viscosity 180-cst HSFO, the traders said.
The viscosity spread for February slipped to $2 a tonne on Monday, down from $2.25 a tonne in the previous session and its lowest since records began in 2013, Refinitiv Eikon data showed.
No high-sulphur fuel oil (HSFO) cargo trades were reported in the Singapore trading window. No 0.5 percent low-sulphur fuel oil (LSFO) cargo trades, bids or offers were reported.
Kuwait's KPC has offered a four HSFO cargo for January loading totalling up to 80,000 tonnes of heavy 380-cst fuel oil with a maximum 4.2 percent sulphur content for Jan. 27-28 loading in a tender closed on Jan. 15 with same day validity.
Bahrain's Bapco sold 60,000-80,000 tonnes of 380-cst fuel oil with a maximum 4 percent sulphur content for Feb. 5-8 loading from Sitra to Gunvor at an unknown price level.
Singapore bunkers: Sales of marine fuels in Singapore, the world's biggest ship fuelling port by volume, totalled 49.8 million tonnes in 2018, down 2 percent from a record the year before, the Maritime and Port Authority of Singapore (MPA) said on Monday.
December sales volumes of marine fuels, also known as bunkers, reached an 11-month high of 4.308 million tonnes, up 10 percent from November and the second-highest for the year, the data showed.
For 2019, many analysts expect a downturn in economic growth amid a trade war between the United States and China, which could potentially weigh on fuel demand, including for bunkers.
Should the Sino-US trade dispute be resolved, however, "bunker sales will be slightly better again this year," said Mike Beviss, a consultant for shipping brokerage Eastport Maritime in Singapore.
Changing rules on marine fuel emissions may also help Singapore keep its bunkering traffic, analysts have said. "Singapore will be one of the few ports where all the different VLSFO (very low-sulphur fuel oil) grades will probably be available," said Beviss.