Japan bunker price slips below Singapore for first time in three years

The price of 380 CST bunker fuel in Japan, which is typically higher than in Singapore, flipped into negative territory Tuesday for the first time since May 28, 2008, due to weak demand and ample supply, Platts data showed.
In the Platts Market on Close assessment process Tuesday, trader Petrosummit offered 300 mt of 380 CST grade at $710/mt for Tokyo Bay delivery, which was taken by Itochu.
Japan 380 CST grade was assessed at $710/mt Tuesday, down $17.50/mt from the previous day. Singapore-delivered 380 CST grade was assessed at $712.50/mt, down $7.25/mt over the same period, in line with declines in Western crude benchmarks.
"There is surplus supply," a trader said Wednesday. Demand has been weak even after Japan prices fell compared with other Asian countries in the second half of October, the trader added.
Japan's monthly bunker sales peaked at 338,104 kl (2.13 million barrels) in July, but have fallen for the last two months in a row.
Sales in September totaled 298,178 kl (1.88 million barrels), below 300,000 for the first time since April. Sales in October would be lower than September, industry sources said.
One of the reasons might be sluggish cargo movements in maritime transportation amid signs of a global economic slowdown, especially in the eurozone. Weak demand was in part caused by high prices in Japan up until H1 October, according to traders.
Meanwhile, sellers were expecting higher demand as prices fell to the lowest in Asia.
"If the prices stay low for a while, demand will increase. Then supply might tighten," a trader said.
Source: Platts