In August, Hong Kong’s bunker fuel demand is expected to fall about 10% month-on-month as the port imposed a new 14-days quarantine rule.
Previously on July, 26, Hong Kong’s Centre for Health Protection announced that cargo ships getting at its port for purposes other than loading or discharging cargoes would be subject to 14 days mandatory quarantine to restrict the spread of coronavirus.
Vessels are still able to come for bunkering only but the vessel crews have to be quarantined for two weeks. The policy does not fare well to shipowners.
Market sources in Hongkong elaborated that since the announcement, there have been requests for cancellations of bunkering stems from vessels that had originally planned bunker-only calls.
Roughly 10% of the bunker demand is now seen swaying away to China’s developing bunkering hub of Zhoushan and southern ports of Shekou and Xiamen. Bunker prices there are often cheaper than in Singapore, in particular Zhoushan.
Data showed that on August 3, marine fuel 0.5%S bunker in Zhoushan and Singapore was traded at USD335/mt and USD330 mt respectively, while the same grade in Hong Kong was assessed at USD340/mt.
However, in Shekou and Xiamen, low sulfur bunker fuel prices are normally higher from Hong Kong, likely by USD10/mt according to the market sources. Most vessels do not have any choice but to bunker there, resulting in a tightened supply due to the increase in demand.
Looking ahead, sources predicted this demand shift to persist until Hong Kong eases the quarantine measures.
Nevertheless, a Hong Kong market source estimated the shortfall from bunker-only calls in the port should not be too significant as most bunker suppliers there still have some orders from container lines operating in Hong Kong.
