HSFO, high-sulphur fuel oil volumes that were traded in Singapore price assessment process were almost decreased in half during 2018 in comparison to the previous year. This, according to Reuters, is a sign of the market altering because of the restricted 2020 sulphur cap that’s awaiting.
Specifically, the 2020 sulphur cap regulations focus on banning ships from using fuel oil with a sulphur content more than 0.50%, compared to today’s 3.50%.
According to Mrs Roslan Khasawneh, as quoted by Reuters, a total of 11.786 million tonnes of HSFO was traded in Singapore in 2018, which was decreased to 46 % from 21.935 million tonnes in 2017 and 34 % from 17.834 million tonnes in 2016.
Also, Singapore is the world’s top fuel oil trading hub and operates as Asia’s pricing centre for refined oil products, including gasoline, diesel and marine fuels. Until now, because Singapore is home to the world’s largest bunkering or ship refuelling port, it primarily sold HSFO for ships’ bunkers.
However, the 2020 sulphur cap regulations limit the use of HSFO. To this result, oil price reporting agencies are working to introduce new price benchmarks for low-sulphur fuel oil (LSFO) bunker fuels ahead of time.
Starting from October, Argus launched several new assessments for low-sulphur marine fuels in bunkering hubs in Singapore, Europe and the United States.
Finally, even though trade liquidity was rare, it made a major step to price discovery for the fuel.
