Ample supply of HSFO in NW Europe widens ‘scrubber spread’ between price of 3.5pc sulphur product and IMO-compliant 0.5pc fuel oil

Courtesy Argus Media

Argus Media reports on 4/14/2021 that the Ample supply of high-sulphur fuel oil (HSFO) in northwest Europe has widened the “scrubber spread” between the price of 3.5pc sulphur product and IMO-compliant 0.5pc fuel oil. Excerpts below. Here’s the full article.

“The price of delivered HSFO in Rotterdam has declined by nearly $20/t since 26 March, but 0.5pc fuel oil has risen by $5/t over the same period, broadening the spread between the two grades from under $90/t in late March to $111/t yesterday, the widest in a month. 

“Abundant supply has weighed on HSFO margins to crude in recent weeks, with the notional discount to front-month Ice Brent futures hitting an 11-month low of $10.96/bl on 9 April. A flurry of cargoes taking HSFO from the Baltic Sea to the Amsterdam-Rotterdam-Antwerp (ARA) trading and refining hub has piled pressure on margins because export opportunities remain limited. Baltic Sea fuel oil exports to ARA reached a 17-month high of 1.33mn t in March, up from 915,000t in February, according to Vortexa data.

“Fading transatlantic demand for Russian Baltic fuel oil drove the cargoes to northwest Europe. And this rise in inflows from the Baltics coincided with fewer arbitrage departures from ARA to Singapore, the world’s largest buyer of marine fuels. Meanwhile, Middle East demand was the main supporter of European HSFO margins in March, with around 610,000t of fuel oil exported from ARA to the Middle East last month, the highest since at least 2018 according to Vortexa.”


“HSFO consumption in Rotterdam was strong in the last quarter of 2020 after ships retrofitted with scrubbers during the year returned to sea. But with few scrubber-fitted ships set to return to service this year, HSFO bunker demand may have peaked. Bunker demand in Europe has been weak this year, with HSFO supply in Dutch ports more than a third lower in January than in December, according to the latest data from Statistics Netherlands.

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