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Argus Media: China’s INE launches VLSFO futures

Financial market participants like hedge funds are expected to be the most active participants, while interest from physical market participants like bunker suppliers is less clear.

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Global energy and commodity price reporting agency Argus Media on Monday (22 June) published an analysis on the performance of China’s first VLSFO futures and the strategies adopted by each stakeholder in the VLSFO market from hedge funds to oil producers. 

Trading in China’s first very-low-sulphur fuel oil (VLSFO) contract started today, with volumes in the most-active contract exceeding 1mn t.

The front-month January 2021 contract on the International Energy Exchange (INE) opened at 2,489 yuan/t ($352/t) and closed up by 7% at RMB2,665/t or $377/t. Trading volumes in the January contract were 1.3mn t (8.4mn bl), with open interest at about 250,000t.

Argus assessed its spot VLSFO bunker price in Zhoushan at $333.70/t today.

The Shanghai-based INE list 12 monthly contracts, starting from January next year. The list price for all 12 contracts was set at RMB2,368/t. The contract is traded in 10t lots and deliveries must have viscosity of 100-380cst, maximum density of 0.991kg/m³ and maximum 0.5% sulphur content.

The decision to set the first contract expiry at more than six months away is designed to encourage more market participants to trade the new contract. Financial market participants, such as hedge funds and futures companies that mostly cannot take delivery of the underlying product, are expected to be the most active participants as a result.

The level of interest from physical market participants, including Chinese VLSFO producers, licensed bunker suppliers, bunker trading firms and shipowners, is less clear.

One bunker supplier in the major Chinese hub of Zhoushan said it is concerned that hedging on the INE would expose it to price volatility, as financial traders may bid prices to levels at a wide spread with the physical market. The company may instead use the futures contract as a marginal source of bunker supply.

Chinese shipowners — the main consumers of bunker fuel — mostly do not trade derivatives and instead buy on a fixed-price basis. And many bunker trading firms are taking a more cautious stance after banks started to tighten their credit.

Domestic refineries have the option of using the INE to hedge their sales prices. But most are state-controlled companies that are either reluctant to participate in the derivatives market, or in some cases banned from doing so by their risk-averse parent companies.

The contract launch comes after China introduced export tax rebates on VLSFO earlier this year, prompting domestic refineries to increase production and exports of the fuel.

The INE’s parent company the Shanghai Futures Exchange has listed a 380cst high-sulphur fuel oil (HSFO) futures contract since July 2018. The contract attracted turnover of 236mn lots, or 23.6bn t, in January-May this year, but only about 300,000t was delivered.


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Argus Media
Published: 23 June, 2020

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Biofuel

BHP and GCMD trial multi-feedstock B100 bio bunker fuel on bulk carrier

Bio-blend in the BHP and GCMD pilot is being used on a BHP-chartered bulk carrier “Berge Lyngor”, which was bunkered in Singapore in early May.

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BHP and GCMD trial multi-feedstock B100 bio bunker fuel on bulk carrier

BHP and the Global Centre for Maritime Decarbonisation (GCMD) on Wednesday (3 June) said they have blended biofuels from two distinct feedstocks—used cooking oil and waste animal fats —and introduced the lower-emissions marine fuel into a BHP-chartered bulk carrier as part of a pilot project.

The bio-blend in the BHP and GCMD pilot is being used on a BHP-chartered bulk carrier Berge Lyngor, owned and operated by Berge Bulk, transporting BHP iron ore from Western Australia to China. When run on bio-blend, the vessel has the potential to reduce well-to-wake greenhouse gas emissions by approximately 79 per cent per voyage compared to sailing on very low sulphur fuel oil (VLSFO).

The vessel bunkered in Singapore in early May with a B100 bio-blend comprising 50 percent tallow-derived biodiesel, sourced and supplied by HAMR Energy, and 50 per cent used cooking oil (UCOME) supplied by Mitsui & Co Energy Trading Singapore (METS).

Mitsui also blended the fuel and Dan-Bunkering coordinated and executed the bunkering operation, which was performed by Global Energy’s barge MT Maple.

The BHP and GCMD pilot will assess how biofuels from multiple feedstocks can be blended, handled, and introduced under real-world operating conditions using existing used cooking oil bunkering infrastructure.

At the same time, insights from this pilot will help identify solutions to challenges related to fuel quality, handling, traceability, and onboard vessel performance.

Biofuels for global shipping today rely heavily on used cooking oil – a feedstock whose availability is approaching its projected limits. Biofuel from waste animal fats presents a promising option to expand the supply of lower-emissions marine fuels.

The outcomes of the pilot are expected to shed light on the practical steps to integrate biofuel blends from different feedstocks into existing supply chains. The diversity of biofuels will provide shipowners and operators with greater flexibility to optimise fuel procurement based on cost, availability, and lifecycle emissions performance.

Biofuels derived from different feedstocks can exhibit varying properties that may impact operations, including potential corrosion from oxidation, fuel system clogging caused by wax formation, which this pilot aims to assess.

The pilot will trace and verify the biofuel blend’s integrity aimed at bolstering confidence in emissions reductions reporting. The pilot will also provide insights into how robust tracing can support future marine fuel supply chains where biofuels from multiple feedstocks with varying lifecycle greenhouse gas emissions footprints are blended together.

This project is co-funded by the Maritime and Port Authority of Singapore under the Maritime Innovation and Technology Fund (MINT).

 

Photo credit: Global Centre for Maritime Decarbonisation
Published: 3 June, 2026

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Biofuel

NYK starts one-year B100 bio bunker fuel trial on car carrier

In this trial, NYK will operate a car carrier continuously on B100 for one year to evaluate the impact on engines, fuel supply systems, and operational practices.

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NYK starts one-year B100 bio bunker fuel trial on car carrier

Japanese shipping firm NYK on Tuesday (2 June) said it has commenced a one-year long-term trial involving the continuous use of 100% biofuel (B100) on an NYK-operated car carrier. 

In this trial, NYK will operate a car carrier continuously on B100 for one year to evaluate the impact on engines, fuel supply systems, and operational practices. High-purity biofuels such as B100 are known to be susceptible to degradation from oxygen, light, and heat, raising concerns about the stability of such fuels during long-term use.

In this trial, the biofuel primarily comprises FAME (Fatty Acid Methyl Ester) derived from used cooking oil and similar feedstocks.

The initiative is designed to evaluate the fuel’s effects on the vessel’s equipment and verify operational safety under real-world conditions. 

Through this effort, NYK seeks to accumulate technical expertise that will support the broader use of high-purity biofuels and further accelerate efforts to reduce greenhouse gas (GHG) emissions.

NYK has been advancing the use of biofuels through various initiatives. In 2024, the company conducted a trial using biofuel blend B24 and subsequently expanded practical usage to B30. However, the company said there remains limited global experience with the long-term continuous use of B100.

“By collecting long-term operational data through this trial, NYK aims to accumulate valuable technical insights to support both the safe operation of vessels and the wider adoption of high-purity biofuels,” it said. 

 

Photo credit: NYK
Published: 3 June, 2026

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Ammonia

AM Green plans to build green ammonia plant at Indian port

Initiative also includes development of green ammonia handling, storage and bunkering infrastructure, pilot bunkering operations, safety procedures and training programmes, says VOC Port Authority.

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VO Chidambaranar (VOC) Port Authority on Friday (29 May) said it has signed a Memorandum of Understanding (MoU) with India’s ammonia producer AM Green Ammonia to collaborate in the development of a green ammonia production plant.

The plant will have a capacity of one million tonnes per annum (MTPA) at Tuticorin.

The initiative also includes development of green ammonia handling, storage and bunkering infrastructure, pilot bunkering operations, safety procedures and training programmes. 

The project is expected to support the development of green fuel corridors connecting VOC Port with major ports in Europe and Asia, thereby strengthening India’s position in the global green fuels value chain.

VOC Port also signed a Memorandum of Understanding (MoU) with Bureau Veritas (India) Pvt. Ltd., to collaborate on Green Port certification, emissions accounting, ESG reporting, safety validation, development of green bunkering practices, and establishment of a Centre of Excellence for green fuels and sustainability.

The port also plans for an upcoming 750 m³ green methanol bunkering facility.

 

Photo credit: Naveed Ahmed on Unsplash
Published: 3 June, 2026

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