Singapore's consumption of biofuels blended bunkers fell to its lowest for more than a year in February with a slowdown in demand from shipowners and charterers, according to statistics from the Maritime and Port Authority of Singapore (MPA).
Consumption of B24 — made of 24pc used cooking oil methyl ester (UCOME) and 76pc very low sulphur fuel oil (VLSFO) — was seen at 15,600t in February, down by 65.5pc on a month on month basis and the lowest compared with monthly volumes consumed throughout 2023.
"Many SMEs are still testing biofuels, but the larger players aren't increasing their demand because they are meeting their CO2 reductions through other energy saving devices in the short term," a London-based broker said.
A key buyer in Singapore confirmed that its purchases have been limited for Singapore and a key Malaysian port in February, corroborating the sharp reduction in demand for bio-bunkers in February.
Singapore's consumption of B24 stood at 60,800t for January and February this year, up slightly compared with the same period in 2023. The steady and dramatic rise in demand throughout 2023, that ended with the record-high 518,000t of consumption, has stagnated, with spot sales dipping.
"No one is prepared to pay the premiums," a key international trader said, referring to the average of $189/t spread on B24 over VLSFO in the past year, calculated based on Argus' data.
"Owners were doing trials on different volumes, but charterers are not paying premium and so owners are not lifting much," the trader added.
It remains to be seen when demand will pick up, a key Singapore-based trader said, despite the pressure on shipowners to meet CII ratings by reduction in greenhouse gas (GHG) emissions from this year.
Among other emerging alternative marine fuels, demand for liquefied natural gas (LNG) touched the record highest at 26,900t as key players have explored the option of bunkering LNG in Singapore in the past couple of months.
Singapore's VLSFO consumption dipped to 2.55mn t for February, down from 2.86mn t seen in January.
Demand for marine gasoil (MGO) also dipped, from 317,000t in January to 296,800t in February.
But consumption of high sulphur fuel oil (HSFO) was maintained at 1.6mn t for January and again February.
Total bunker consumption in Singapore year to date stood at 9.4mn t, up from 8.1mn t in the same period last year. Overall consumption of bunkers in 2023 rose sharply through the year and hit a record high of 51mn t.
