Beijing-based commodity market information provider JLC Network Technology Co. on Thursday (11 June) shared its JLC China Bunker monthly report for May with Manifold Times through an exclusive arrangement: 

JLC China Bunker Market Monthly Report (May, 2020)
Highlights

Demand and Supply

Bunker Oil Demand

Bonded bunker fuel sales stay high in May on improving demand

In May, China’s bonded bunker fuel sales were about 1.45 million mt, JLC data showed. The bonded bunker fuel demand was buoyed by recovering shipping demand and advantageous prices. Countries took actions to shore up economy upon easing COVID-19 in May. More ships were incentivized to refuel at Chinese ports amid low prices of low-sulfur bunker fuel supplied by domestic refiners. In addition, bunker fuel markets in Singapore were hit by the bankruptcy of Hin Leong Trading and some traders shifted focus to Chinese ports for bunker fuel oil consumption. As a result, sales of bonded bunker fuel in May stayed high. Chimbusco and Sinopec sold about 525,000 mt and 678,000 mt of bonded bunker fuel, respectively. New enterprises in the China (Zhejiang) Pilot Free Trade Zone sold 136,000 mt. Bonded bunker fuel sales were about 79,000 mt for China ChangJiang Bunker (Sinopec) and 42,000 mt for SinoBunker. 

China’s bonded bunker fuel sales surged to 1.56 million mt in April, up by 41.26%% month on month and up by 56.11% year on year, according to GAC data. Major Chinese ports saw low-sulfur bunker fuel prices equivalent to or lower than those in Singapore amid domestic mass production and short distance of supply. With more shares in the market, China’s bonded bunker fuel sales went up in April. PetroChina ramped up exports of low-sulfur bunker fuel oil by direct supply from its refineries, and thus topped Chimbusco in bonded bunker fuel sales, ranking the first. Specifically, bonded bunker fuel sales were 544,600 mt for Chimbusco, 70,400 mt for Sinopec, 75,500 mt for China ChangJiang Bunker (Sinopec), 40,500 mt for SinoBunker and 130,000 mt for new enterprises in the China (Zhejiang) Pilot Free Trade Zone.

Domestic bunker fuel demand grows in May

Domestic bunker fuel demand rose in May. With temperature rising and coronavirus-related protection loosened, bulk demand continued to rally, among which demand for coal, metal ore and grain recovered markedly. Freight capacity was tight in some routes. End-users who shut down their operation before began to purchase bunker fuel. Driven by improving coastal transport demand, bunker fuel demand went up. The demand for domestic-trade heavy bunker fuel was about 300,000 mt in the month, up by 40,000 mt or 15.38% from the previous month. The demand for light bunker fuel was 105,000 mt in May, up by 20,000 mt from April on rising demand amid stable trades when fishers made purchases mainly based on needs.

Bunker Oil Supply

Bonded bunker fuel imports rise 37.76% in April

China’s bonded bunker fuel imports were 1,029,400 mt in April, a rise of 37.76% month on month and a drop of 22.43% year on year, GAC data showed. Bonded bunker fuel traders stocked up amid low prices resulted from the collapse of international crude and high inventories at some ports in April. Driven by large purchases, China’s bonded bunker fuel imports were higher in April than the previous month.

Specifically, the largest import source for China was Malaysia with 529,000 mt of bunker fuel, followed by South Korea with 179,000 mt. The imports were 178,500 mt from Singapore and 60,000 mt from Japan. Besides, there were imports of 37,500 mt and 44,000 mt from Russia and Indonesia, respectively.

Domestic blended bunker fuel supply grows in May 

Chinese blended producers supplied a total of around 330,000 mt of heavy bunker fuel in May, a rise of 30,000 mt or 10% month on month, JLC data showed. With the effective control of COVID-19 in May, coastal bulk demand turned better along with a gradual recovery of the economy. Meanwhile, Some blended producers made more purchases when blended costs rebounded. However, blended producers in Northeast China halted operation on a lack of fuel oil invoices. Therefore, domestic trade bunker fuel supply was still below the normal level of last year, despite a month-on-month rise. Light bunker fuel supply was about 110,000 mt, up by 10,000 mt from April. Despite the surge of international crude prices, the improvement in light bunker fuel supply was not significant due to lackluster fisher demand.

Bunker Profits, Prices

JLC Network Technology Co., Ltd is recognised as the leading information provider in China. We specialise in providing transparent, high-value. authoritative market intelligence and professional analysis in commodity markets. Our expertise covers oil, gas. coal, chemical, plastic, rubber. fertilizer and metal industry, etc.

JLC China Bunker Oil Market Monthly Report is published by JLC Network Technology Co., Ltd every month on China bunker market’s, demand, supply, margin, freight index. forecast and so on. The report provides full-scale & concise insight into China’s bunker oil market. 

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Photo credit: JLC Network Technology Co., Ltd
Published: 12 June, 2020