Reuters reports that Sinopec’s Guangzhou refinery has produced its first batch of VLSFO and GP Global has started a new bunker operation in Jebel Ali, the United Arab Emirates.
Sinopec has said that it intends to produce some 10 million tonnes of VLSFO this year, increasing its volumes to 15 million tonnes by the close of 2023, while GP Global has deployed two 4,800tonne barges to its new operation in the Middle East.
It is difficult to ascertain if the news of new supply options in two critical bunkering regions has been reflected substantially in the price of oil as the prices for most fuel types in most regions continues to decline. There is a global downturn in 380HFO, VLSFO and MGO, according to the latest MABUX report.
A further decline of US$7.92/tonne for 380HFO on the global scale was surpassed in North Europe which recorded the largest drop of US$27.5/tonne. At the same time, VLSFO fell US$9/tonne globally, while Africa & The Middle East saw the largest fall for this fuel of US$31.5/tonne. Furthermore, MGO decreased by US$15.89/tonne with a huge fall of US$62.25/tonne in Africa & Middle East.
That means that the spread between HFO and VLSFO is now under US$100/tonne and the shift in price of VLSFO relative to HFO remains a great concern for those owners that fitted expensive exhaust gas cleaning system (scrubber).
