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CFR Shandong premiums for SRFO cargoes down on weak demand

https://www.chemnet.com   Jul 21,2011
The CFR premiums for straight-run fuel oil (SRFO) to be delivered to Shandong in August-September have declined from levels for July, because of weak demand, C1 learned from SRFO traders.

Most traders estimated the CFR premiums for August-delivery M100 fuel oil at about US$55/mt, down by US$3/mt from those for July. "The market for August-delivery M100 fuel oil is very sluggish and I wonder whether a deal can be settled with premiums at around US$55. No demand from power plants has been heard about, and the CFR premium for delivery to Japan is also below US$60/mt," said a major trader of M100 fuel oil.

The premiums for September-arrival cargoes have dropped even further. One cargo of September-arrival low-sulfur SRFO from Kazakhstan has been traded with CFR premiums below US$85/mt, down by US$5-10/mt on month, C1 learned from a trader. This cargo is scheduled for loading on Aug 1, to reach North China port in the first half of September before being supplied to Shandong, C1's shipping schedules indicated.

The premiums for Kazakhstan fuel oil is usually at around US$25/mt over those for M100 fuel oil, both for delivery to Shandong, said a source with Kazakhstan's state-owned company KMG.

The premiums for blended SRFO from Singapore and Malaysia have also fallen, said an importer in Shandong. Buyers in Shandong are willing to pay only about US$20/mt of CFR premiums for such resources for August arrivals, down by US$2/mt on month, the importer said.

The trading of blended SRFO for delivery to Shandong has been very sparse, said traders.
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