Prices for low-sulphur fuel grades in Singapore soared to edge out marine gas oil (MGO) prices out of the top spot on Friday as pressure mounts on the bunker markets ahead of the IMO 2020 implementation date.

With less than a month to go before non-scrubber fitted ship are required to switch from 380 CST fuel oil to 0.5%-sulphur fuel, prices have climbed rapidly over the past two weeks, reaching record highs since the fuels first became available in the market.

Very low sulphur fuel oil (VLSFO) was selling in Singapore for $552.50 per tonne at the beginning of December, but on Friday the price had climbed to $613 per tonne, according to Ship & Bunker data. It last peaked at $608.50 per tonne in September.

Regular marine gas oil (MGO) was trading at $603 per tonne in Singapore last Friday.

The market development came as demand for 380 CST fuel oil with 0.5%-sulphur contents began to increase rapidly in Singapore, the world’s largest bunkering hub.

Data from Maritime and Port Authority of Singapore showed sales of this grade rose to nearly 1.29m tonnes in November from 459,300 tonnes in October, while those of MGO rose to 431,000 tonnes from 345,000 tonnes.

Sales of 380 CST fuel oil with 3.5%-sulphur contents collapsed to 1.52m tonnes from 2.23m tonnes.

The spike in 0.5%-sulphur blends was not just a Singaporean phenomenon, according to Ship & Bunker. The marine fuels market intelligence company’s data shows similar spikes elsewhere, including Hong Kong, where VLSFO was trading at $604 per tonne and Fujairah at $614.50 per tonne.

European and North American prices also climbed, but remained lower than in Asia and the Middle East. VLSFO traded on Friday at $527 per ton in Rotterdam, $591.50 per ton in Houston, and $592.50 per ton in Los Angeles.

Ship & Bunker’s Global 20 Ports average for VLSFO stood at $599.50 per tonne on Friday, while the average for MGO came in at $660.50 per tonne, with the highest prices being in the Middle East and the Americas.

Market sources said the spike in VLSFO demand and pricing was expected to peak in the weeks leading up to 1 January, and prices should remain very firm for the remainder of the month.

“It is a commodity-based product and when demand is high, so is the price,” a Singapore-based bunker trader told TradeWinds.

“On a positive note, nobody has been turned away at the major bunkering ports because of a lack of supply. I don’t think supply is going to be as big a problem as was first thought.”

Other Singaporean bunker industry sources said that the bunker delivery crunch experienced earlier in the month due to bunker tankers undergoing tank cleaning in preparation for carrying IMO 2020 compliant fuels is starting to ease and delivery times are starting to improve.

Most bunker trading sources predict that VLSFO pricing should begin to moderate after the initial procurement rush dies down.

Max Tingyao Lin contributed to the article.