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By Roslan Khasawneh
SINGAPORE, Sept 25 (Reuters) - S&P Global Platts on
Wednesday reported the first physical cargo trade for
low-sulphur fuel oil (LSFO) with a maximum 0.5% sulphur content
in Singapore ahead of a sulphur cap by the International
Maritime Organization (IMO) next year.
The milestone trade comes ahead of the IMO regulations that
will reduce the permissible sulphur content in marine fuels
globally from 3.5% currently to 0.5% from the start of 2020.
Shell sold 20,000 tonnes of LSFO marine grade fuel to P66 at
$19 per tonne to Singapore 0.5% marine fuel quotes for October
for delivery on Oct. 16-20, according to trade data collected by
Reuters.
"This first trade signifies that the market is ready and
willing to transit to cleaner fuels earlier than most people had
anticipated," said Matt Stanley, oil broker at StarFuels in
Dubai.
S&P Global Platts, the agency that publishes benchmark fuel
oil price assessments, introduced LSFO cargo trading in its
so-called market-on-close (MOC) price assessment process in
Singapore at the start of the year.
While limited supply and scarce demand has so far kept a lid
on trade liquidity for physical cargoes of the lower-sulphur
fuel, trade activity in the relatively new marine fuel is
expected to increase as the IMO's deadline nears.
"Liquidity on 0.5% marine fuel will gradually pick up over
the course of the coming weeks as transparency increases," said
Stanley.
Singapore is the world's top fuel oil trading hub and serves
as Asia's pricing centre for refined oil products, including
gasoline, diesel and marine fuels.
The city-state is also home to the world's largest bunkering
or ship refuelling port. Until now, that has meant primarily the
sale of high-sulphur fuel oil (HSFO) for ships' bunkers.
(Reporting by Roslan Khasawneh; Editing by Louise Heavens and
Mark Potter)
