Beijing-based commodity market information provider JLC Network Technology Co. recently shared its JLC China Bunker monthly report for September 2023 with Manifold Times through an exclusive arrangement:

Bunker Fuel Demand

China’s bonded bunker fuel sales retreat in September

China saw a drop in its bonded bunker fuel sales in September, due to tightening supply and  some policy factors.

The country sold approximately 1.67 million mt of bonded bunker fuel in the month, with the daily sales decreasing by 4.23% to 55,610 mt from August, JLC’s data shows. The sales by Chimbusco, Sinopec Zhoushan, SinoBunker and China ChangJiang Bunker (Sinopec) were respectively 550,000 mt, 620,000 mt, 75,000 mt and 35,000 mt, while those by suppliers with regional bunkering licenses dropped to 388,300 mt.

Despite relatively stable shipping demand, China’s bonded bunker fuel sales fell back amid tightening supply. Meanwhile, the barging capacity at ports in Shenzhen, Guangzhou and Xiamen became inadequate, adding to the downward pressure on the sales.

China’s bonded bunker fuel exports rally in August

China’s bonded bunker fuel exports rallied modestly in August, mainly due to a slight increase in domestic fuel oil output.

The country exported roughly 1.63 million mt of bonded bunker fuel in the month, inching up by 0.84% month on month, JLC estimated, with reference to data from the General Administration of Customs of PRC (GACC).

Among these exports were 1.55 million mt of heavy bunker fuel and 79,600 mt of light bunker fuel, which accounted for 95.12% and 4.88% of the total, respectively.

Enterprises with national bunkering licenses exported about 1.17 million mt of bonded bunker fuel in the month, accounting for 71.99% of the country’s total, with Sinopec Fuel Oil and Chimbusco taking 64.35%. Meanwhile, suppliers with regional licenses exported 456,600 mt, occupying 28.01%, with PetroChina Fuel Oil (Zhoushan, Shanghai, Guangzhou and Shenzhen) supplying 234,600 mt, accounting for 14.39% of China’s exports and 51.38% of regional enterprises’ total.

Larger bonded bunker fuel exports were ascribed to faster fuel oil production. China’s daily fuel oil output settled at 146,839 mt in August, a boost of 3.31% month on month, according to data from the National Bureau of Statics (NBS). Meanwhile, bunkering business at Chinese ports recovered to some degree when typhoons weakened, which also lent some support to the exports.

Capping the upside, however, some refiners and traders ran short of quotas on low-sulfur fuel oil (LSFO) exports.

On a year-on-year comparison, China’s bonded bunker fuel exports plunged by 19.65% in August. Underlying the slump was a relatively high base in August 2022 when refiners hiked exports sharply amid new quotas.

China recorded a total of 13.66 million mt of bonded bunker fuel exports in the first eight months of this year, growing by 2.42% from the corresponding months in 2022, decelerating from a boost of 6.38% in January-July.

Heavy bunker fuel exports totaled 12.97 million mt in the eight months, making up 94.97%, while marine gas oil exports amounted to 687,400 mt, accounting for 5.03%. Enterprises with national bunkering licenses tallied about 10.97 million mt of bonded bunker fuel exports in this period, accounting for 80.32%, while those with regional licenses exported 2.69 million mt, nearly one fifth of the country’s total exports.

Domestic-trade bunker fuel demand rises in September

Domestic-trade bunker fuel demand rose in September, amid lingering bullish sentiment and pre-holiday restocking.

Domestic-trade heavy bunker fuel demand climbed to 360,000 mt in the month, an increase of 30,000 mt or 9.09% from August, JLC’s data shows. In the meantime, domestic-trade light bunker fuel demand rose to 140,000 mt, up by 10,000 mt or 7.69% from the previous month. 

Though downstream buyers increased purchases to meet rigid demand, their acceptance of high prices was still limited.

Bunker Fuel Supply

China sees a drop in its August bonded bunker fuel imports

China’s bonded bunker fuel imports dropped in August, as import costs surged and domestic fuel oil production sped up.

The country imported approximately 306,500 mt of bonded bunker fuel in the month, a cut of 8.23% from the previous month and 8.48% from a year earlier, JLC estimated, with reference to data from the General Administration of Customs of PRC (GACC).

South Korea became the largest supplier to China by exporting about 111,600 mt of bonded bunker fuel, accounting for 36.4% of the latter’s total imports. Oman ranked second with 100,600 mt, accounting for 32.8%, while Russia slipped to the third place with 91,300 mt, making up 29.8%. There were also 3,000 mt of bonded bunker fuel coming from Singapore, occupying 1.0%.

Domestic importers showed lower buying interest, as high-sulfur bunker fuel prices in Asia soared amid surging international crude and imported low-sulfur bunker fuel prices still lacked price advantages. Meanwhile, freight rates for imported cargoes stayed firm, adding to the downward pressure on the imports.

The drop in the imports was also because of larger domestic production. Chinese refiners raised their daily fuel oil output to 146,839 mt in August, an increase of 3.31% month on month, according to data from the National Bureau of Statics (NBS).

China’s bonded bunker fuel imports totaled about 2.49 million mt in January-August, diving by 20.58% from the same months in 2022, slowing down from a plunge of 22.02% in January-July.

Chinese blenders supply more domestic-trade heavy bunker fuel in Sept

Chinese blenders supplied more domestic-trade heavy bunker fuel in September, as they raised output when refineries increased low-sulfur residual oil supply. Meanwhile, terminal buyers placed more orders for bunker fuel towards the public holiday for the Mid-Autumn Festival and the National Day.

Chinese blenders supplied about 390,000 mt of domestic-trade heavy bunker fuel in the month, a boost of 20,000 mt or 5.41% from August, JLC’s data shows.

On the contrary, domestic-trade marine gas oil (MGO) supply dropped to 160,000 mt, a cut of 10,000 mt or 5.88% month on month. Coking margins were squeezed by rising feedstock prices, forcing refineries to reduce their light bunker fuel supply.

Editor
Yvette Luo
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Sales (Beijing)
Tony Tang
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Sales (Singapore)
Ginny Teo
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JLC Network Technology Co., Ltd is recognized as the leading information provider in China. We specialized in providing the transparent, high-value, authoritative market intelligence and professional analysis in commodity market. Our expertise covers oil, gas, coal, chemical, plastic, rubber, fertilizer and metal industry, etc.

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

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Note: China-based commodity market information provider JLC Technology has been providing Singapore bunkering publication Manifold Times China bunker volume data since 2020. Data from that period is available here.

Photo credit: JLC Network Technology
Published: 13 October, 2023