Singapore, Feb 16: Mangalore Refinery and Petrochemicals Ltd (MRPL) has sold seven fuel oil cargoes

Singapore, Feb 16: Mangalore Refinery and Petrochemicals Ltd (MRPL) has sold seven fuel oil cargoes totalling 560,000 tonnes to Cargill International at unexpectedly high prices, traders said on Friday.

The 380-centistoke (cst) cargoes, for March-September loading from the refiner's New Mangalore terminal, were done at discounts of $3-$7 a tonne to Singapore spot quotes on a free-on-board (FOB) basis.

''The strike price for the first cargo is shocking and that's putting it mildly. The price idea for most players would be at a discount of around $5-$6 a tonne, especially with the market already coming off,'' a Singapore-based Western trader said.

The first 80,000-tonne parcel, for March 18-20 loading, was done at a discount of $3-$4 a tonne to spot quotes, up from a $6-discount for a February-loading lot previously.

The second parcel, for April 5-10 loading, was done at a discount of $4-$5 a tonne to spot quotes while the other five lots, for loading on the 5th to 10th day of each month, were done at discounts of $6-$7.

Interest in MRPL cargoes is typically keen because of their low-density that makes them ideal for blending into Chinese and Vietnamese specification utility-grade parcels.

The market has been tight on density cutters to the point where Singapore suppliers were unwilling to produce 0.98-density Chinese-specification fuel oil cargoes at less than a $10-a-tonne premium to spot quotes, FOB.

Although density remains at a high premium, the overall supply situation has eased as Western February cargoes, delayed by bad weather in Europe, begin flowing in.

March is expected to see heavy supplies, with Western volumes at above-average levels of around 2.7-2.8 million tonnes, and premiums are expected to fall from current levels of $4-$6 a tonne.

Table of MRPL's loading schedule product tonne loading/port

Fuel oil 80,000 March 18-20/New Mangalore
80,000 April 5-10/New Mangalore
80,000 May 5-10/New Mangalore
80,000 June 5-10/New Mangalore
80,000 July 5-10/New Mangalore
80,000 Aug 5-10/New Mangalore
80,000 Sept 5-10/New Mangalore

Reuters