Hong Kong April marine gasoil premium settles higher on lower sulfur level


Hong Kong bunker fuel suppliers have settled April-loading marine gasoil premiums to the Mean of Platts Singapore Gasoil assessments at $19-20/mt, up from March's $15-16/mt, after a reduction in MGO sulfur content in compliance with new government regulations, Hong Kong bunker suppliers said Monday.

The Hong Kong government has mandated that, from April 1, local suppliers will only be able to sell MGO with a maximum sulfur content of 0.05%, compared with a cap of 0.5% previously.

Meanwhile, Hong Kong suppliers said they have settled 380 CST bunker fuel premiums at $16.50-18/mt to MOPS 380 CST high sulfur fuel oil assessments for April-loading product, down from $17.50-20/mt for March, in line with lower premiums for Singapore HSFO cargoes.

Suppliers attributed the weaker premiums to lower cash differentials in the Singapore HSFO market in March.

The Singapore 380 CST HSFO cash differential is taken into consideration when settling ex-wharf premiums for bunker fuel in Hong Kong, as Singapore is the main supply source for Hong Kong.

The Singapore 380 CST HSFO cash differential averaged a premium of $0.33/mt over March 1-28, compared with an average of minus $3.69/mt in February, Platts data showed.

The Singapore HSFO market has weakened in March amid expectations the city state would receive more fuel oil in April.

The Hong Kong 180 CST bunker fuel premium was settled at $17-19/mt for April-loading cargoes, down from $18-20/mt for March, suppliers said.

HSFO is imported into Hong Kong by ExxonMobil, Chevron, Sinopec and Chimbusco Pan Nation, mainly from Singapore, and sold on an ex-wharf basis as bunker fuel to local traders and major suppliers like Chimbusco Pan Nation, Vermont, Feoso, Sinopec and Soaring Dragon.

Importers negotiate the price of ex-wharf bunker fuel with suppliers as a differential to the monthly average of the Mean of Platts Singapore 380 CST HSFO assessment. Suppliers then deliver the bunker fuel to ships using their own barges on a delivered-price basis.

Hong Kong suppliers sell about 500,000 mt/month of bunker fuel, and the port has the capacity to store 450,000-500,000 mt of fuel oil.

Of the total storage capacity, ExxonMobil owns 310,000 mt, of which 250,000-260,000 mt has been leased out to Chimbusco Pan Nation since February 2012. The rest of the storage capacity is owned by Sinopec (100,000 mt) and Chevron (60,000 mt), bunker suppliers said.

Source from : Platts