Singapore Spot Biofuels Premiums Decrease on Slow Demand

Premiums for spot shipping biofuels in Singapore have decreased due to slow demand, according to market sources. The flagship B24 marine biofuel blend was trading between $120 and $130 per tonne over 0.5% low-sulfur fuel oil. This marks a decline from previous levels, with premiums previously reaching $145 to $170 at the end of 2023. Despite some sellers maintaining offers at $140 to $150, there has been limited buying interest in recent days.

Shippers are mainly purchasing marine biofuels for trials rather than regular procurement as they seek to reduce carbon emissions. The B24 blend, which combines 24% used cooking oil methyl ester (UCOME) with 76% very low sulfur fuel oil (VLSFO), is the current benchmark grade for marine biofuels. Singapore has seen a significant increase in biobunker volume in 2023, but monthly volumes have slowed in 2024, with sales in February reaching their lowest level since August 2022.

The data from the Ports Authority of Singapore shows a decline in biobunker sales in recent months. Despite efforts to maintain premiums, slow demand has led to decreased interest in purchasing marine biofuels. Shippers are exploring alternative fuels like biofuels to reduce their carbon footprint, and the market continues to adjust to changing demand dynamics.

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