Markets remained indecisive, fuel oil market sluggish, Daewoo 2012 target secured, Suezmax taking a slice of VLCC business

Singapore Summary:

  • 180FO Bal Oct traded 665.50 (-0.25)
  • 180FO Nov traded 663.50 (+0.55)
  • 180FO Bal Oct/Nov traded +2.50
  • Visco: Bal Oct value 11.25
  • 380FO Bal Oct traded 654.50 (+0.10)
  • GO Bal Oct value 128.20 (+0.50)

 

Singapore ex-wharf offers was heard to hover around $662/mt. For fuel oil contracts, balance of the month October contracts for 180 cst lost 25 cents/mt to be traded at $665.50/mt, while balance of the month October contract for 380 cst gained 10 cents/mt to be traded at $654.50/mt October 2. In the fuel oil market, bearish sentiments were seen with the influx of some 5 million mt Western-origin cargoes. Thin demand from Chinese teapot refiners.

Reuters reported October 1: "As China's economy slows, demand for refined products has decreased due to slowing industrial demand for power generation fuels." The publication added: "China's slowdown has largely been attributed to the flatlining global economy which has seen a steep drop in overseas orders for exports from China's large factory base. As China is expected to be closed for business for the next 7 days due to the week-long mid-autumn holidays, purchases by refiners are expected to remain capped at around 1.2 million tonnes in October versus about 1.8-2 million tonnes in September."

A bunker spill was reported in Barangay Banago, Bacolod City, Philippines, said Ship & Bunker October 2. The spill is estimated to have leaked 300 liters of bunker fuel reported to be from a submarine pipe during bunkering. The article said: "Recovery of spilled bunker fuel oil continued Sunday by scooping and using absorbent pads, resulting in the recovery of approximately four drums of oily mixture."

Singapore's Maritime and Port Authority has announced enhancement sto its Maritime Cluster Fund scheme, said in the MPA website Sept 28. The increase in co-funding support is expeted to cost the agency $2 million/year. The enhancements aim to encourage more maritime companies to train local employees, and the programme is extended to include non-maritime employees seeking to attend maritime-related certifiable programmes.

Japanese Mitsui OSK Lines has changed its business outlook for H1 of FY2012 from a net income of Yen 2 billion ($25.6 million) April 1 forecast to a loss of $13.5 billion ($172.9 million), said Ship & Bunker October 2. The factors contributing to this is the sluggish bunker market, steep bunker prices.

TradeWinds News said October 1 that Suezmax tankers are taking the slice of the usual VLCC and aframax routes. This was reportedly on account of expanding fleet in the vessel type by 10% so far this year.

In the report from Poten & Partners: “Although the pace of VLCC fleet growth has punished earnings, VLCCs have enjoyed an organic demand benefit from increased Arabian Gulf production and from Asian crude import sourcing trends. The rising supply of light/sweet crude in the Atlantic Basin has tightened the Brent-Dubai crude price spread, which has encouraged Asian refiners to lift additional volumes of West African and other Brent-linked Atlantic Basin crudes, typically on VLCCs. Moreover, the continued demand from other Asian refiners for heavier crudes, in order to support growing upgrading capacity, has supported VLCC demand for Caribs, Mexican and Brazilian stems."

South Korean Daewoo Shipbuilding & Marine Engineering has recently sealed contracts for four drillships from Transocean and from Atwood, marking that it has hit its order target for 2012, TradeWinds said October 2. The Korean shipbuilder's target was $11 billion. The recent contracts mean that the company has secured deals worth $11.7 billion in 2012.

In a move to aid Chinese shipyards and ensure energy security, a group of Chinese state-owned shipping companyes has placed a $4.5 billion order for 50 VLCCs, said TradeWinds News September 28. Currently, the country's VLCC fleet only has 60 vessels and this expansion would increase the country's crude-carrying capacity.

Singapore's PSA Singapore Terminals stated October 1 that it will spend $2.85 billion to develop Pasir Panjang Terminal's Phases 3 and 4, according to Ship & Bunker October 2. The stated phases will construct a total of 15 new berths and with almost 6 km of quay length and up to 18 meters draft. The development is expected to increase Singapore's capacity to 50 million TEUs/year.

Dubai-based Atlantic Navigation lists on SGX, becoming the latest offshore vessel operators listed on the exchange, reported TradeWinds News October 2.

TradeWinds News said October 1 that Singaporean Ezra Holdings has sealed a deal to build a $47 million-worth subsea construction contract for Vietnam’s Petroleum Technical Services Corp Mechanical and Construction. Installation is expected to start in Q1 2013.