4 November 2020
Key Effects to Consider:
As per the graphics below, we have currently found that about 30% of stems are quoted MTW versus MTD. However, when split by low/high volumes we found 50% of all stems for this period under 500 MTs were quoted MTW, more than doubling the percentage of stems under 500 MT quoted MTW in 2019 (23%). As of October 2020, 65% of the suppliers in Singapore were quoting MTW, with 10% of those quoting exclusively MTW.
It is not only the low volume stems, there are also higher volume stems (over 500 MTs), that get a barging premium. The lumpsum barging rate can vary from $1500 to over $4500.
This impacts prices in lower quantities for VLSFO by approx. $50 and LSGO by approx. $25 per MT. There are many more small stems than before and they carry the barging premium.
Buyers and Operators need to be aware and establish stem volume plans to ensure they are delivered the correct amount, as fluctuations in volume can cause prices to be $10 - $30 per MT higher than the initial MTW quote and can range $5 - $40 per MT above suppliers quoting MTD.
It will be interesting to continue to track this trend and see if it may cause a ripple effect on other high liquidity ports like Rotterdam, Fujairah, Gibraltar.
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