China: Zhoushan faces bonded bunker fuel supply crunch

The following article published by Manifold Times on 25 May was sourced from China’s domestic market through a local correspondent. An online translation service was used in the production of the current editorial piece:

The supply of bonded bunker fuel in Zhoushan- China’s biggest bunkering port – has been tight with more than half of the local suppliers reporting that the latest delivery date is estimated to be 26 May. 

Quotes for bunker fuel at Zhoushan in May have been considered as extremely high, and has recently passed the USD 1,000 per metric tonne (pmt) mark. 

Conditions for bunkering are expected to improve in June; however, the price of 0.5% sulphur fuel oil is forecast to hover between USD 970 to 990 pmt.

According to some Chinese suppliers, the China bonded bunker fuel supply is tight with uncompetitive prices.

To explain, the bonded oil quota for domestic refineries is limited and the distribution of avails is uneven. 

Further, most domestic refineries rely heavily on two or three major suppliers and are operating in a scenario where international oil prices are high, leading to an increase in import costs.

The rise in import costs, in turn, causes less profit margins resulting in low willingness to import oil cargoes for supporting bunkering operations.

Manifold Times on 11 May reported a local supplier on the Chinese mainland saying the supply of bunker fuel will be increasingly tight from May to June with all suppliers struggling to meet demand.

Related: China: Bonded bunker fuel avails to remain tight between May to June
Related: JLC China Bunker Market Monthly Report (March 2022)

Photo credit: Manifold Times
Published: 25 May, 2022