0.5 EW and arb, naphtha vs HSSR

380 Jan/Feb weakened further to essentially flat now. At the same time, our supply-side pricing-based model continues to suggest a fair value of $2/MT (dark blue line) which implies a greater level of divergence (light blue area) currently.

On the other hand, there seems to be less divergence for low sulphur with our model suggesting almost $1/MT for Sing 0.5 Jan/Feb while market currently hovers around 25-50c.

Rott-Sing 0.5 Arb, EW & Freight

The chart above shows the Rott-Sing 0.5% arbitrage for a rolling M+1’2D Suezmax loader (red dotted line) and also a breakdown of the different components that make up that arb.

Slight better Sing premiums, weaker Rott cargo premiums and firmer EW paper have made the arb look slightly better than when we last looked at it 2 weeks back but front month is still very much unworkable at the moment.

Part of that of course has to do with freight. The chart below shows how strong TD20 is relative to historical. On a $/MT basis, we are some $7-8 and $12-13 higher than the same time in 2023 and 2024 respectively!

Hoa brings extensive experience, having led fuel oil analysis at Trafigura and worked across crude, diesel, and APAC power markets. Hoa now leads the development of Sparta’s forward-looking tools for fuel oil and feedstocks.

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