Rising winter demand for fuel oil from China has pushed up Worldscale rates on the Singapore-China and Indonesia-Japan routes by w30 points over the last two days.
‘Close to seven Aframaxes have been fixed on Singapore-China voyages to move fuel oil, sources said Friday, adding that a few more vessels could have been done by charterers through private negotiations. The latest fixture heard was ST Shipping placing the Ambrosia on subjects for a Singapore-North China voyage, loading December 16 at w170. Other traders such as Vitol, Koch, Cargil, Conoco and Mercuria are reported to have moved fuel oil into China. One shipowner said that oil majors like Chevron and BP have also moved fuel oil to China. Platts assessed the Indo-Japan rate at w165 on Thursday, which is the same for Singapore-China. The Aframax segment is busy on regional activity, especially for moving fuel oil into China, a Singapore-based charterer said. “A lot [of fuel oil] is moving in to China. It seems like all the tea pot refineries have started up,” a shipping source said. In Singapore, demand for fuel oil from Chinese buyers emerged several weeks ago after fuel oil values tumbled to close to a four-year low, market participants said. Platts had assessed the utility 180 CST high sulfur fuel oil at $214.58/mt, while the bunker grade 380 CST high sulfur fuel oil stood at $204.28/mt on November 24, 2008. Both grades were assessed around these levels last in February 2005. The Chinese, who are price sensitive and typically buy fuel oil directly from the Middle East or the US Gulf Coast, are buying fuel oil from Singapore ahead of the North Asian winter and after running down their fuel oil stocks in the last few months. The Aframax rates out of the Indonesian region were also boosted by Japanese charterers Cosmo Oil and NGT fixing close to four Aframaxes on the Indo-Japan route.