Weaker Demand Pressures Singapore April Bunker Prices

Why It Matters

The price movements highlight tightening margins for ship operators and underscore how geopolitical tensions and demand softness can quickly reshape bunker cost structures, affecting global shipping profitability.

Key Takeaways

• VLSFO April price fell 16% month‑on‑month, still 52% YoY
• Backwardation narrowed to $15/t, reducing cargo‑price discounts
• HSFO up 55% YoY, down 10% from March
• LSMGO doubled YoY, but slipped 10% after March peak
• Weak downstream demand drives sellers to offload inventories

Pulse Analysis

The April bunker market in Singapore showed a clear shift as very‑low sulphur fuel oil (VLSFO) prices slipped 16% from March, settling at $746.98 per tonne. Despite the drop, the level remains 52% higher than a year ago, reflecting lingering cost pressure from tighter blend‑stock supplies. Sellers trimmed offers to stay competitive, narrowing the VLSFO backwardation to just $15 per tonne by late April. This reduced the premium that physical traders could capture over cargo prices, signalling weaker downstream demand and a more cautious buying stance among vessel operators.

High‑sulphur fuel oil (HSFO) prices rose 55% year‑on‑year to $665.11 per tonne, buoyed by Iran’s blockade of the Strait of Hormuz that constrained Middle‑East shipments. Nevertheless, the market corrected 10% month‑on‑month as existing inventories and floating storage eased supply concerns. Low‑sulphur marine gasoil (LSMGO) experienced a dramatic year‑on‑year jump to $1,481.65 per tonne, yet fell 10% from March as panic over Asian shortages faded. Diversions from Colombia, Mexico and Venezuela added to Singapore’s HSFO pool, while Chinese ports offered cheaper LSMGO alternatives.

The combined effect of weaker demand and geopolitical volatility is reshaping bunker economics for ship owners. With VLSFO blend‑stock still tight, price support may re‑emerge if inventories dwindle in May, prompting operators to lock in fuel ahead of anticipated spikes. Meanwhile, the discount of Singapore LSMGO against Zhoushan benchmarks gives charterers leverage to negotiate lower bunkering costs, especially on non‑urgent voyages. Monitoring backwardation trends and regional supply flows will be crucial for budgeting and route planning as the industry navigates a post‑war, demand‑softening environment.