Singapore Marine Biofuel Premiums Drop Further on Soft Demand

Spot marine biofuel premiums have weakened further at the world's largest bunker hub Singapore, weighed by slow demand, market sources said this week.

Premiums for the flagship B24 marine biofuel blend recently traded between $120 to $130 a metric ton over 0.5% low sulphur fuel oil quotes, on a delivered Singapore basis, according to sources from bunker suppliers, trading firms and shipowners.

The premiums extended declines from early first quarter when the product traded down to about $140 a ton, and between $145 and $170 in end-2023.

Some sellers were trying to hold offers at premiums of $140 to $150 in recent days, but these were met with muted buying interest, sources said.

Shippers mostly buy marine biofuel for trials rather than for regular procurement. Biofuel is among several alternative fuels that shippers are exploring to reduce carbon emissions.

The B24 blend, which is the current benchmark grade for marine biofuel, combines 24% used cooking oil methyl ester (UCOME) with 76% very low sulphur fuel oil (VLSFO).

Singapore's annual bio-bunker volumes more than tripled in 2023 but monthly volumes have slowed in 2024 so far. Sales in February 2024 hit its lowest since August 2022, latest available data from Singapore's port authority showed.

(Reuters - Reporting by Jeslyn Lerh; Editing by Varun H K)