14 October 2020
Since 2005, the ISO standards have provided bunker suppliers and vessels specification levels to ensure safety, quality, and monitoring with many choices of ports, suppliers, and grades of fuel.
The latest, ISO 2017, follows previous ISO dated 2005, 2010, and 2012 with each including finer differences and improvements that have been introduced as an outcome of new fuels and regulations. One assumption was that these changes would cost more to source and blend and as a result the 2017 standard would carry a premium over 2005, 2010 or 2012.
We tested this assumption based on the largest port, Singapore, using our ClearLynx price index and transactional volume for September (about 13% of annual Singapore demand) our main observations are:
1) ISO 2010 is the most popular ISO spec ordered. ISO 2010 accounted for 80% or higher of all MT across HSFO, VLSFO, & LSMGO.
2) The price of ISO 2017 was lower than ISO 2005, 2010, or 2012. While ISO 2010 accounted for the most MT, the best deals were done on ISO 2017 fuel. When comparing versus the ClearLynx pricing index owners lifting LSMGO with ISO 2017 spec would have been, on average, $2.30 better than the index, but for ISO 2010 only $0.76 above the index. For VLSFO, owners lifting ISO 2017 would have been $8.47 better than the index versus $4.50 better than the index if lifting ISO 2010.We will continue to monitor other ports on price and availability which also impacts choice.
Through our bunker procurement, pricing and analytics platform, we have unique visibility of actual and indicative pricing, product requirements, availability and completed transactions across the market. By aggregating this anonymized data, coupled with over a decade of historical data, we can provide insight into market activity, current trends and commentary on potential future outcomes.
ClearLynx Market Insights brings you the latest thoughts and findings from our team based on real data.