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JLC China Bunker Fuel Market Monthly Report (May 2024)

Country sold about 1.62 million mt of bonded bunker fuel in May, with the daily sales slipping by 3.42% month on month to 52,416 mt due to tepid bunkering demand, according to JLC’s data.

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JLC China Bunker Market Monthly Report (May 2024)

Beijing-based commodity market information provider JLC Network Technology Co. recently shared its JLC China Bunker monthly report for May 2024 with Manifold Times through an exclusive arrangement:

Bunker Fuel Demand

China sees another fall in bonded bunker fuel sales in May

China saw another fall in its bonded bunker fuel sales in May, due to tepid bunkering demand, despite larger LSFO production.

The country sold about 1.62 million mt of bonded bunker fuel in the month, with the daily sales slipping by 3.42% month on month to 52,416 mt, JLC’s data indicates.

Bonded bunker fuel sales by Chimbusco and SinoBunker dropped to 480,000 mt and 55,000 mt in May, while those by Sinopec (Zhoushan) and China Changjiang Bunker (Sinopec) climbed to 590,000 mt and 36,000 mt, respectively. In the meantime, suppliers with regional bunkering licenses sold 463,900 mt of bonded bunker fuel, sliding from 468,100 mt in April, the data shows.

Though refiners ramped up LSFO production, the barge capacity at domestic ports was relatively tight amid lingering supervision of bunker barges, which dragged down the country’s bonded bunker fuel sales.

China’s bonded bunker fuel exports increase in April, but sales decline

China’s bonded bunker fuel exports continued to increase in April, but the actual sales decreased as bunkering demand was relatively weak and domestic refiners cut LSFO production.

The country exported 1.73 million mt of bonded bunker fuel in April, jumping by 321,100 mt or 22.74% month on month, with the daily exports significantly up by 26.83% to 57,777 mt, JLC estimated, with reference to data from the General Administration of Customs of PRC (GACC).

Heavy bunker fuel exports were about 1.64 million mt in the month, accounting for 94.41% of the total, while light bunker fuel exports were 96,900 mt, accounting for 5.59%.

However, the country’s bonded bunker fuel sales dropped in April, as domestic LSFO supply tightened when refineries’ unit maintenance peaked. Meanwhile, Chinese customs strengthened the supervision of bunker barges, dampening ports’ bunkering business to some extent. The country sold about 1.63 million mt of bonded bunker fuel in the month, with the daily sales down by 7.48% month on month to 54,270 mt, JLC’s data shows.

Bonded bunker fuel exports are not equal to bonded bunker fuel sales, as the exports refer to the volume of cargoes flowing into bonded tanks while the sales refer to the actual volume of bunkering.

On a year-on-year comparison, China’s bonded bunker fuel exports soared by 21.08% in April.

China exported a total of 6.17 million mt of bonded bunker fuel in January-April, slipping by 4.07% from the corresponding period in 2023. Specifically, heavy bunker fuel exports were roughly 5.80 million mt, accounting for 93.98%, while light bunker fuel exports were 371,400 mt, accounting for 6.02%.

JLC China Bunker Market Monthly Report (May 2024)

JLC China Bunker Market Monthly Report (May 2024)

Domestic-trade heavy bunker fuel demand contracts in May

Domestic-trade heavy bunker fuel demand contracted in May, as the shipping market remained lukewarm. Domestic-trade heavy bunker fuel demand was estimated at 390,000 mt in the month, falling by 30,000 mt or 7.14% from the previous month, JLC’s data shows.

In contrast, domestic-trade light bunker fuel demand came in at 140,000 mt in May, up by 10,000 mt or 7.69% month on month. Shipowners increased their purchases as power generation demand picked up amid warmer weather.

Bunker Fuel Supply

China’s bonded bunker fuel imports fall in April

China’s bonded bunker fuel imports fell in April, as most distributors showed lower buying interest in bonded high-sulfur fuel oil (HSFO) when their inventory was relatively high.

The country imported about 341,000 mt of bonded bunker fuel in the month, a cut of 11.04% month on month and 17.61% year on year, JLC estimated, with reference to data from the GACC.

As Chinese Customs strengthened the supervision of bunker barges, the barge capacity at ports in East China declined and most companies saw a drop in their bonded bunker fuel sales, leading to a build-up of HSFO. In this case, distributors reduced purchases of bonded HSFO in April, dragging down the country’s total bonded bunker fuel imports.

However, certain distributors imported LSFO to meet demand when domestic supply tightened amid a traditional maintenance season. Chinese refiners produced about 1.23 million mt of LSFO in the month, with the daily output at 41,033 mt, down by 8.81% month on month, JLC’s data shows.

Singapore topped all bonded bunker fuel suppliers to China with 204,100 mt in April, accounting for 59.84% of the total. Malaysia and South Korea ranked second and third by exporting 105,700 mt and 31,300 mt of bonded bunker fuel to China, which accounted for 31.99% and 9.17% respectively.

China tallied a total of 1.31 million mt of bonded bunker fuel imports in January-April, soaring by 24.83% from the corresponding months in 2023, slowing down from a 52.60% surge in January-March.

JLC China Bunker Market Monthly Report (May 2024)

Domestic-trade bunker fuel supply continues to tighten in May

Domestic-trade bunker fuel supply continued to tighten in May, as low-sulfur residual oil supply decreased further and blenders’ blending interest was depressed by tepid shipping demand.

Chinese blenders supplied about 410,000 mt of heavy bunker fuel in the month, descending by 20,000 mt or 4.65% from the previous month, JLC’s data shows.

At the same time, domestic-trade MGO supply settled at 150,000 mt, a loss of 10,000 mt or 6.25% from a month earlier, the data shows. Refineries’ enthusiasm for MGO production was hit by falling diesel prices.

Bunker Prices,Profits

JLC China Bunker Market Monthly Report (May 2024)JLC China Bunker Market Monthly Report (May 2024)
JLC China Bunker Market Monthly Report (May 2024)

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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.

All rights reserved. No portion of this publication may be photocopied, reproduced, retransmitted, put into a computer system or otherwise redistributed without prior authorization from JLC.

Related: JLC China Bunker Market Monthly Report (April 2024)
Related: JLC China Bunker Market Monthly Report (March 2024)
Related: JLC China Bunker Fuel Market Monthly Report (February 2024)
Related: JLC China Bunker Market Monthly Report (January 2024)

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 earlier periods are available here.

 

Photo credit: JLC Network Technology
Published: 12 June 2024

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Bunker Fuel

Cargo ship “Tony Stark” detained in Spain for bunker fuel spill

Authorities have not allowed the Antigua & Barbuda-flagged ship to leave the port on Africa’s north coast until the owners pay bail of EUR 120,000.

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Marine Traffic / Raul Buque

Spain detained a cargo ship for causing a spill during a bunkering operation near the Spanish enclave of Ceuta, according to Reuters on Tuesday (23 July). 

Authorities have not allowed the Antigua & Barbuda-flagged Tony Stark ship to leave the port on Africa's north coast until the owners pay bail of EUR 120,000 (USD 130,129), Reuters reported, citing comments from Spain’s Merchant Fleet. 

Trails of fuel oil were found in front of Benitez beach, the breakwaters of the port and San Amaro beach in Ceuta, in the Alboran sea.

The Merchant Fleet estimated the size of the fuel spill was one metric tonne. It opened a disciplinary procedure that will determine the final fine.

 

Photo credit: Marine Traffic / Raul Buque
Published: 24 July 2024

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Decarbonisation

DNV: Leading maritime cities driving decarbonization of shipping

Dr Shahrin Osman, Business Development Director, DNV Maritime Advisory and co-author of Leading Maritime Cities report, explains the central importance that decarbonization and digitalization occupy within shipping.

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Dr Shahrin Osman, Business Development Director, DNV Maritime Advisory

Dr Shahrin Osman, Business Development Director, DNV Maritime Advisory and co-author of the Leading Maritime Cities report, explained the central importance that decarbonization and digitalization occupy within shipping in this article published on Tuesday (23 July). 

He outlined how maritime cities are the centres of gravity driving this forward, facilitating innovation and coming up with the solutions which are needed for shipping to reach its ambitious decarbonization goals:

The Leading Maritime Cities report shines a light on the key cities driving the maritime industry forward. With decarbonization and digitalization key factors in today’s maritime world, the report’s co-author explains how these are being advanced by activities in the leading maritime cities.

The latest edition of the Leading Maritime Cities (LMC) report was published in April this year. The collaboration between DNV and Menon Economics delivers fresh insights into the maritime cities which offer the best policy measures, infrastructure and supporting institutions, and how these are driving advancements in the maritime industry.

Leading maritime cities in a world of transition

The LMC report recognizes the central importance that decarbonization and digitalization occupy within shipping. The impact of these two dimensions cuts across the traditional pillars that cities are benchmarked on. To address their transformative effect, this year’s report introduces new indicators – such as capabilities in the adoption of digital technologies and automated processes for port operations, and proactivity in implementing green and sustainable financing practices.

“The maritime industry is in the midst of a major transformation,” says Dr Shahrin Osman, Business Development Director, DNV Maritime Advisory and co-author of the report. “Decarbonization targets mean that the entire industry is looking at how it can undergo a transformation of technologies and fuels to reduce emissions, all of this being supported by advances in digitalization.”

Singapore dominates rankings with strong decarbonization efforts

“Maritime cities are the centres of gravity driving this forward. This is where the leading companies and talents are residing and where the real transformations are taking place. They provide platforms for progress and serve as conduits, linking the industry with the wider global economy.”

Like in the previous edition of this report in 2022, a combination of objective and subjective indicators are used to rank the different cities. Singapore was once again recognized as the leading maritime city, followed by Rotterdam and London, with Shanghai and Oslo making up the remainder of the top five. The Asian city-state hit the top spot in three out of the report’s five pillars, retaining its position as leader in Attractiveness and Competitiveness and overtaking Athens and Shanghai in Shipping Centres and Ports and Logistics. Much of this is due to Singapore’s strong positioning towards decarbonization.

The Silicon Valley of the maritime industry

“Driven by key bodies like the Maritime and Port Authority of Singapore and the Global Centre for Maritime Decarbonization, Singapore has a forward-leaning, future-ready approach. They look at things not just for the next few years, but for the next decade,” says Shahrin. “This includes policies towards building up a multi-fuel infrastructure, the electrification of harbour craft, and the promotion of green shipping corridors.”

“Overall, this has made Singapore an attractive location for shipping businesses, to the point where we now regard it as the Silicon Valley of the maritime industry.”

Government policies driving the green transition in key cities

As the example of Singapore has shown, strong, progressive government policy is one of the key factors behind the evolution of maritime cities, underpinning a forward-leading approach. This can attract companies and top talent to a city, while creating a competitive economic environment with well-developed infrastructure can encourage these actors to stay.

“This is especially relevant for decarbonization initiatives, where returns on investments take longer, and are dependent on wider infrastructure being in place,” says Shahrin. “Government support mechanisms can be crucial in facilitating innovation, so that new products and solutions can be developed.”

Shahrin points to the Norwegian Green Shipping Programme as a prime example of good government policy in action. This brings together public and private actors to overcome key decarbonization barriers, supported by funding from the Norwegian parliament.

Attraction of talent to cities key to progress

Central to the attractiveness and competitiveness of a maritime city is its ability to attract and retain top talent. The presence of research and educational institutions can help to develop talent within that location. The availability of professional opportunities and general high standards of living will encourage leading talents to relocate.

“Achieving technological progress is dependent on aggregating available knowledge that could otherwise be located in silos, and bringing it all together in clusters,” says Shahrin.

Note: DNV’s full Maritime Impact can be viewed here

 

Photo credit: DNV
Published: 24 July 2024

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Research

New study shows real world complexities and shortcomings of IMO CII formula

If IMO aims to maintain CII as a meaningful measure to incentivise shipping’s decarbonisation, a thorough review of the formula is necessary, says Royal Belgian Shipowners’ Association and AMS study.

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RESIZED IMO Building

The Royal Belgian Shipowners' Association (KBRV) released a study that investigated issues with the International Maritime Organization’s (IMO) Carbon Intensity Indicator (CII) formula. 

The study, titled Evaluating the Carbon Intensity Indicator: Challenges and Recommendations for Improvements, was done in collaboration with four master’s students from the Antwerp Management School (AMS). 

As part of their thesis project, the research conducted by the students included a comprehensive literature review, a qualitative analysis, and a quantitative analysis using data from Belgian-controlled ships.

The following are the key findings and recommendations of the study:

Key Findings 

Both literature review and qualitative analysis identified three variables with the most adverse impact on CII ratings:

  • Waiting Time: Time spent idling or waiting in ports or awaiting orders.
  • Number of Ports of Call: The frequency with which a ship docks at different ports.
  • Distance Travelled: The total nautical miles covered by the vessel.

The quantitative analysis confirmed the significant impact of these variables. However, a deeper dive into different shipping segments revealed a complex interplay of factors affecting CII ratings, making it difficult to pinpoint the main adverse variables universally.

For example, container vessels are highly affected by the number of port calls. An increased number of stops results in a worsened CII rating.

When comparing three Very Large Crude Carriers (VLCC) with similar distances travelled, waiting times, and number of port calls, differences in CII ratings still occurred. This could be attributed to external factors beyond anyone's control, such as adverse weather conditions.

For LPG carriers, there was a clear correlation between waiting days and CII ratings. Carriers that traded on routes with major port congestions - thus longing waiting time - scored lower than a sister ship with identical design efficiencies on less busy operating routes.

Recommendations

These findings underscore the multifaceted nature of CII ratings. If the IMO aims to maintain the CII as a meaningful measure to incentivise shipping's decarbonisation, a thorough review of the formula is necessary, taking into account the various factors beyond the control of both shipowners and charterers that influence the CII ratings. At a higher level, the scope and goal of the CII within the basket of measures needs to be reassessed as well.

Shipping is the most efficient way of transporting goods, emitting the lowest GHG per ton of transported cargo. Addressing the carbon efficiency of the sector requires the effort of every stakeholder involved, from shipowners and charterers to port authorities and customers. Placing the responsibility for a ship's efficiency solely on the shipowner does not accurately address the complexities and other influencing factors that exist.

Note: The study titled Evaluating the Carbon Intensity Indicator: Challenges and Recommendations for Improvements can be downloaded here

Manifold Times has covered several parties calling for the amendment of CII in the past including:

Related: INTERCARGO joins shipping industry in calls for IMO to amend CII flaws
Related: IBIA pursues amendment to Carbon Intensity Indicator for bunker vessels

 

Photo credit: International Maritime Organization
Published: 24 July 2024

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