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Marine biofuel premiums soften at prime bunker hub Singapore -sources.
Spot premiums of marine biofuel fell at world’s largest bunker hub Singapore in early 2024, a number of market sources mentioned, weighed by lukewarm demand, decrease biofuel feedstock prices and a stronger underlying benchmark for residual gas oil.
The marine biofuel market has seen progress during the last two years as shippers discover lower-carbon options for soiled gas oil, however broader demand stays sluggish as shippers have a tendency to purchase for sporadic trials and time period contracts.
The B24 mix, the present benchmark grade for marine biofuel, combines 24% used cooking oil methyl ester (UCOME) with 76% very low sulphur gas oil (VLSFO). The cargoes usually commerce at a premium to Singapore VLSFO quotes.
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Spot delivered premiums of B24 traded to as little as round $140 a metric ton over Singapore VLSFO quotes in January, bunker market sources mentioned, down from between $145 and $170 a ton in direction of end-2023 and above $200 a ton in Q3 2023.
The worth unfold has narrowed this yr after typical VLSFO bunker costs strengthened, as delivery disruptions within the Pink Sea led to firmer demand for VLSFO marine gas.
In the meantime, Asia UCOME costs have been capped since This fall 2023 as a result of sluggish demand and ample provides, on prime of a mushy European market, biofuel merchants mentioned.
Singapore marine biofuel gross sales breached 520,000 tons in 2023, greater than tripling from 2022 however making up only one% of complete bunker volumes, port authority knowledge confirmed.
Bio-blended volumes hit a contemporary month-to-month document excessive final October earlier than easing in November and December.
Sellers are banking on the European Union’s emissions buying and selling system for the delivery business to carry world demand for lower-carbon marine fuels from this yr.
The Worldwide Maritime Organisation additionally permitted interim pointers final yr that helped make clear how licensed sustainable biofuels can be utilized to enhance a ship’s carbon depth indicator ranking.
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Marine biofuel premiums soften at prime bunker hub Singapore -sources, SINGAPORE, February 7 2024