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Japan bunker market braces for delays, congestion on approach of Typhoon Lan

TINNews |

The Japan bunker fuel market is bracing for a disruption in bunker operations as Typhoon Lan approaches the mainland, traders said Friday. Vessels and barges will not be able to carry out bunkering activities if the weather conditions worsen, they said, adding that the typhoon was predicted to hit the mainland October 23.

With regional media reporting that mainland Japan is expected to experience the greatest weather impact from Typhoon Lan this weekend and going into early next week, Japan-based traders have been making arrangements to reschedule vessels that may be affected by the typhoon.

“We’ve been busy rescheduling vessels that might be affected by the typhoon … vessel schedules may be delayed until October 24, but we need to check if they [the vessels] can wait, if not, they have to go on to the next port,” a trader said earlier this week, adding however that some orders have already been canceled.

Traders said they were also busy Friday morning as they had to check with customers about the status of their bunkering orders.

“In the event of bad weather on Monday, we had to ask customers if they wanted to wait, or if they are not able to wait, then they would have to decide to cancel [their orders] by today,” a trader said Friday afternoon, adding that most market participants were also rushing to secure bookings for berths as well as custom clearances for loading next week.

Even as Typhoon Lan is expected to disrupt bunkering activities, most traders said they do not expect the storm to have any impact on bunker fuel prices.

“I don’t think there will be any impact [on prices] at all,” a trader said Friday. “The typhoon will affect vessels that are already [have existing bunker fuel orders] … for now, we are dealing with inquiries for new orders for delivery from around October 26 onwards, and by then the situation should be back to normal,” he said.

Still, other traders said Friday that the spot bunker fuel market has been fairly muted in recent days.

“It was very quiet yesterday [Thursday] for the Japan bunker market due to the typhoon,” a source said Friday morning. “Some vessels are already diverting to South Korea and China to take bunkers there due to delays here [in Japan] … and also, because of barge congestion issues in Japan, nobody can offer [into new inquiries],” he said.

Another trader agreed, saying that he had had to turn down a few bunker fuel inquiries.

“I had to decline a few [inquiries] as the vessel ETAs were quite close to October 25 and barging companies are reluctant to guarantee [delivery] or take on new orders for that date,” he said, adding that with Japan expecting the typhoon on October 23, many existing orders for barge companies have been pushed to October 24-25. “But after October 26 or 27, they [the barge companies] should be OK by then,” he said.

At the Asian close Thursday, 380 CST bunker fuel for delivery at Japan was assessed at $360/mt. The same product for delivery at South Korea and Shanghai was assessed at $359/mt and $361.50/mt, respectively.

Typhoon Lan is currently situated east of the Philippines, and is expected to curl north towards Japan over the next few days. The Japan Meteorological Agency at 0345 GMT reported that Typhoon Lan was moving north at 15 kph, with a maximum sustained wind speed of 35 meters/second and maximum wind gusts of 50 meters/second.

The JMA described the scale of the typhoon as large, and its intensity as strong.

According to the JMA, the typhoon is expected to intensify over the next two days with increases in wind as well as movement speeds, and is forecast to be “very strong” over October 22.

 

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