Singapore (Platts)--23Mar2011/946 am EDT/1346 GMT

The volume of bunker fuel sold in Singapore fell by more than 50% to around 670,000 mt last week from about 1.36 million mt in the previous week despite the massive March 11 earthquake in Japan, according to Platts' estimates based on weekly data released by IE Singapore.

For the week ended March 16, IE Singapore statistics showed a 32% week on week decline in the volume of fuel oil imports to around 930,000 mt, while exports jumped 64% to around 650,000 mt. Commercial stockpiles of heavy distillates during the week slipped to 18.46 million barrels from 18.89 million barrels in the previous week.

Meanwhile, refineries in Singapore are estimated to produce about 30% of fuel oil from their overall refined capacity of around 1.0 million mt/week. Taking into account IE Singapore data and local production estimates, it appears that Singapore -- the biggest bunkering port in the world in terms of sales -- did not see any incremental demand in the aftermath of the earthquake in Japan which has dramatically reduced bunker fuel supplies at Tokyo Bay.

Bunker fuel suppliers in the Tokyo Bay area -- JX Nippon Oil, Idemitsu Kosan and Kyokuto Petroleum Industries -- have not resumed sales since the March 11 earthquake.

JX, which restarted its 270,000 b/d Negishi refinery Monday, has yet to resume seaborne shipments from the refinery and is not accepting new orders for bunker fuel delivery at Tokyo Bay.

Idemitsu is also not accepting new orders for March-delivery bunker fuel at Tokyo Bay, even though its 220,000 b/d Chiba refinery was not affected by the earthquake, while Kyokuto Petroleum has not resumed bunker sales yet despite its sole 175,000 b/d Chiba refinery having reached full production Tuesday.

JX Nippon and Idemitsu typically sell about 40,000 mt/month of bunker fuel each, while Kyokuto Petroleum supplies about 20,000 mt/month. In Singapore, bunker suppliers said there has not been any incremental demand due to the Japan quake.

"Demand in Singapore has been pretty consistent these two weeks, before and after the quake," said one major supplier Tuesday.

Major shipping lines have not changed their buying patterns, several sources with shipowners told Platts, with one Japanese shipper saying it was keeping to its term arrangements.

"We have managed to [maintain] our bunker supply [and] are not in an extreme situation that we have to shift all demand for Japanese ports to overseas, including Singapore," an official in charge of bunker procurement at NYK said.

Another industry source pointed out that a ship buys bunker fuel based on the route it has to take and although the price of bunker fuel is most attractive in Singapore, it does not necessarily mean they will buy from Singapore.

"It depends on the ships' routes and how well they plan their routes so that they maintain their supply of bunker fuel," the source said, especially since they now know they are unable to buy marine fuel from Japan.

As a result, ships would most likely fulfill their bunker requirements from various ports like China, South Korea, Taiwan, and the Philippines which are along their routes.

Platts assessed the Japan delivered 380 CST grade at $683/mt on Tuesday, while the Singapore delivered 380 CST grade was assessed at $636.50/mt and the ex-wharf 380 CST grade at $634.50/mt.

--Goh Shu Hui, shu_hui_goh@platts.com

--Norazlina Juma'at, nora_jumaat@platts.com

Similar stories appear in Bunkerwire. See more information at http://bit.ly/Bunkerwire