Bunker price trends in Latin America

Transcription

1 Bunker price trends in Latin America Lucretia Cardenas, Team Leader June 12, Platts, McGraw Hill Financial. All rights reserved.

2 Overview Introduction An overview of low-sulfur premiums and availability in Latin America Benchmark Panama bunker spreads narrowing relationship to resupply Shifting sands in Latin America bunkers markets 2

3 Low-sulfur Bunkers and Latin America Bunker price trends in Latin America

4 Low-Sulfur bunkers and Latin America Countries supplying low-sulfur bunker fuel include: Panama Chile Argentina (only has LSFO due to crude) Colombia Brazil Venezuela 4

5 Low-Sulfur bunkers and Latin America Premiums seen recently Panama: $70-80/mt (down from $125/mt in August 2012) Chile Valparaiso: ~$125/mt (began offering in Fall) Colombia Cartagena: ~$120/mt (began offering in August) Brazil - $8/mt (low premium due to more low-sulfur available than high-sulfur, similar to Buenos Aires) Venezuela - +$200/mt (began offering in November) 5

6 Panama Bunkers and Resupply Bunker price trends in Latin America

7 Panama bunkers and resupply Source: EIA 7

8 Panama bunkers and resupply Demand has been lower than normal this year due to global dynamics Limited demand relative to resupply during Q1 and into Q2 caused suppliers to be more competitive Panama suppliers say they need $30-40/mt bunker premium to Houston to cover costs, buyers say $20-30/mt Source: Platts 8

9 Panama bunkers and resupply In February, total bunkers sold was up but the number of ships bunkering was down - Panama Maritime Authority US fuel oil exports to Panama down 850,000 barrels in March - EIA Market sources suggest combination of lower demand and competition from other countries supplies Also, storage was full in February and demand was not great IFO 380, was assessed at its narrowest premium this year to the US Gulf Coast 3%S fuel oil wholesale on March 18, at a $7.84/mt premium 9

10 Panama bunkers and resupply $70.00 Houston 3% Fuel Oil - Panama 3.5% IFO 380 ($/mt) $60.00 $50.00 $40.00 $30.00 $20.00 $10.00 $ Oct-12 1-Nov-12 1-Dec-12 1-Jan-13 1-Feb-13 1-Mar-13 1-Apr-13 1-May-13 Source: Platts 10

11 Montevideo and Buenos Aires bunkers Bunker price trends in Latin America

12 Montevideo and Buenos Aires Argentina is selling some of the cheapest low-sulfur bunker fuel in the world as a result of the country's export tax and the residual fuel it produces The price has averaged nearly a $100/mt discount to bunker fuel in nearby Montevideo, Uruguay, during the past year This is despite the bunker fuel being sold in Buenos Aires having a sulfur level of 0.7% compared to Uruguay remaining at 3% 12

13 Montevideo and Buenos Aires $ IFO 380 $ $ $ $ $ Montevideo Buenos Aires $ Aug-12 1-Sep-12 1-Oct-12 1-Nov-12 1-Dec-12 1-Jan-13 1-Feb-13 1-Mar-13 1-Apr-13 1-May-13 Source: Platts 13

14 Valparaiso and El Callao bunkers Bunker price trends in Latin America

15 Valparaiso and El Callao Another development during Q1 and Q2 is the inversion of the relationship between bunker prices in Chile compared to Peru In early March, a large amount of supply in Chile and a decrease in demand has forced suppliers to lower bunker prices Only lasted a week due to ENAP export Inversion occurs again in May on poor weather, lasting several weeks Swells keep resupply from getting to El Callao Swells cause port and terminal closures in Valparaiso 15

16 Valparaiso and El Callao 50 IFO 380 Valpraiso-El Callao ($/mt) Source: Platts 16

17 Colombia MGO Bunker price trends in Latin America

18 Colombia diesel tax and MGO The government implemented additional taxes on the sale of certain petroleum products, including diesel marine, in January The marine diesel tax rose $1.050/gallon - Colombia s National Aceite Combustible para Motores Tax law. The tax resulted in a significant jump in bunker prices If they are going to charge us 20%, we re not going to suck up 20%, a bunker source said at the time Bunker prices jumped initially and continued to increase as more suppliers moved prices up with the tax 18

19 Colombia diesel tax and MGO $1,300 $1,250 Cartagena MGO $1,200 $1,150 $1,100 $1,050 $1,000 $950 $900 $850 $800 19

20 Conclusion Bunker price trends in Latin America

21 In Conclusion Keeping watch of Panama bunker prices relative to resupply costs other ways to cover costs? Continue to monitor the relationship of 1%S and 3.5% sulfur in Latin America Tracking global port relationships to see if that tells us about any shift in demand 21

22 Questions/Comments