7 OCTOBER 2020
With the final quarter of 2020 now among us, ClearLynx looked at some of the current market trends that developed in September and how these trends may affect owners for the rest of 2020 and going forward.
In the chart above, you will see a trending of weekly MT broken down by lift percentage. You can see HSFO at 20.34% of all lifts in the early part of September, bottoming out with less than 15% of total lifts in week 38, before jumping to just under 30% of all lifts by the end of the month. This uptick in HSFO lifts also coincided with an increase in spread between HSFO & LSFO and the fall of LSFO lift from 73.2% in week 38 to 55.29% in week 40. When HSFO lifts were at their lowest, (14.72% of total volume), the spread between HSFO and LSFO in ClearLynx’s top ports began to increase, jumping from $41 in week 37 up to $48, and eventually $53 on average by the end of the month. The decrease in spread that momentarily occurred in the middle of the month was following a downtrend that began in August when on average, the HSFO/VLSFO spread in our top ports was around $55. Month over month there was a $10 jump in spread from September 1st to October 1st.
Another trend taking shape has been a sharp decline in the spread between VLSFO & LSMGO. If you look at the VLSFO/LSMGO comparison below, from week 36 to week 40, the drop-off is quite noticeable with the spread falling nearly $20. This decrease in spread coincided with a decrease in VLSFO volume from nearly 75% of all stems in the middle of September down to just 55% of all stems by October. As the spread decreased, LSMGO lifts increased slightly from ~12% in weeks 36 – 38, growing to ~15% in weeks 39 and 40.
When looking at the VLSFO/LSMGO spread in individual ports for September, Singapore and Rotterdam having a spread less than $30 stands out as, as for August the spread in these ports was $36 (now $15) and $51 (now $28) respectively. This decrease in spread was seen across our top ports during the period.
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.
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