Asia's low-sulfur fuel oil market has climbed on less supply of low-sulfur wax residue (LSWR) from Indonesia this month and growing demand, C1 learned from market sources.
The FOB premiums of LSFO from Southeast Asia have risen to around US$125/mt, up about US$5/mt from June, C1 learned. In addition, one fuel oil cargo from South Korea has recently been traded with FOB premium above US$120/mt, for loading in the first half of August.
Indonesia is scheduled to export 120,000mt of LSWR in four cargoes this month, down by about 20% or 30,000mt from the previous month, according to a major trader of LSFO. Three of these cargoes are for Mitsui under a long-term contract, while one cargo is for the spot market, also expected to flow to Japan.
When supply drops, LSFO demand from Japan, South Korea and Taiwan has increased amid peaking power consumption. All the three cargoes that Mitsui bought would be supplied to domestic power plants, said a source with Mitsui.
