Mumbai, Hong Kong bunker fuel demand steady since OW Bunker collapse

Singapore (Platts)--19Nov2014/406 am EST/906 GMT Some traders expected Mumbai demand to jump as much as 25%, but sources said they have not seen that level of increase.Demand remains slow for some traders, while others had increases of 10-15% at most."October was really a slow month, so November isn't looking so bad, even though it is still slow," one Mumbai-based seller said.Traders said it was hard to tell whether the slight increase was a result of vessels avoiding Singapore and deciding to bunker elsewhere in the wake of OW Bunker's announcement that it was filing for bankruptcy protection."We won't know the full picture until the end of the month as we are only one-third into the month of November so far," another Mumbai-based source said.Mumbai bunker fuel demand is typically 10,000 mt/month.Offers for the delivered 380 CST grade in Mumbai were around $480/mt Tuesday, traders said.In comparison, Fujairah sellers were offering $449.50-470/mt, sources in the Middle East said.Singapore sellers were offering $465-480/mt.At those offer levels, shipowners were unlikely to switch plans and head to Mumbai solely for bunkering, trade sources said.Fujairah would be a better alternative to Singapore unless shipowners had cargoes to load or discharge in Mumbai, they added.HONG KONG VOLUMES UNCHANGEDIn Hong Kong, traders said there was a surge in urgent spot bunker inquiries over November 13-14, when buyers were first seeking cargoes to replace orders that belonged to OW Bunker.But the market had since fizzled."Inquiries were more initially, but total sales volumes didn't change," a Hong Kong trader Tuesday.Hong Kong demand is typically around 550,000-600,000 mt/month.Bunker fuel buyers in Hong Kong also faced similar credit issues seen in the Singapore market, a supplier there said.Traders said bunker fuel sellers have been reviewing their credit policies, with many now requiring buyers to pay cash in advance or cash on delivery instead of the usual open credit terms.Bunker fuel trading houses in South Korea have been meeting much of the supply gap created in North Asia by the OW Bunker collapse."South Korean trading will be able to digest the excess bunker volumes," a Tokyo-based trader said.A source from a South Korean refinery said that despite the disruption, there was no change in sales volumes in South Korea planned for November, as other traders have bought the quantity that OW Bunker would have bought.Traders do not expect to see a permanent shift in bunker sales volumes in Asia as each port serviced different pools of vessels on specific shipping routes."Hong Kong cannot compete with Singapore, so the vessels taking bunker fuel in Hong Kong are the ones that won't call at Singapore," a trader said.On November 7, OW Bunker filed for bankruptcy protection, two days after it announced a loss of at least $275 million due to a combination of fraud by senior employees at Singapore subsidiary Dynamic Oil Trading and mark-to-market losses in the wake of collapsing global crude prices.The Danish company claimed 7% of global bunker market share.The company was publicly listed in Copenhagen in March and has since halted trading and been removed from the stock exchange listing.Dynamic and OW Bunker Far East, another Singapore entity, have since gone into liquidation, according to Singapore's Accounting and Corporate Regulatory Authority. --Goh Shu Hui, --Ronald Shi, --Edited by Meghan Gordon,