Durban’s Hi5 spread blows out as VLSFO price surges

Durban's Hi5 spread has widened sharply over the last month, as the port's VLSFO price has climbed while its HSFO price has held broadly flat.

The Hi5 spread in Durban stood at $308/mt today, up from $80/mt on 1 September, according to ENGINE's price data.

Durban's VLSFO price has risen by $245/mt to $1,177/mt today, from $932/mt on 1 September. By comparison, the port's HSFO price has gained only $17/mt to $869/mt today, from $852/mt on 1 September.

Fuel availability is extremely tight in Durban, and buyers are advised to allow lead times of 10-15 days to secure deliveries of any fuel grade, a trader told ENGINE.

The steep Hi5 spread significantly increases the economic benefit for scrubber-fitted ships calling in Durban to bunker HSFO in the port. There is only one supplier delivering HSFO in Durban currently, a source said.

Meanwhile, there are around three suppliers offering VLSFO in Durban, and a trader has reported stronger demand for VLSFO than for HSFO in the port.

Durban's VLSFO is the most expensive among South Africa's main bunker ports and its nearby alternatives. At current levels, it is priced at premiums of around $217/mt over Cape Town, $143/mt over Richards Bay and $127/mt over Algoa Bay.

Durban's VLSFO is also priced at premiums of $193/mt over Mauritius's Port Louis and $300/mt over Namibia's Walvis Bay.

By Nachiket Tekawade

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