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

China’s bonded bunker fuel sales fall in September

China’s bonded bunker fuel sales fell in September, as port operation in East China was dampened by typhoons, also due to tighter low-sulfur fuel oil (LSFO) supply.

The country sold roughly 1.66 million mt of bonded bunker fuel in the month, with the daily sales inching down by 0.02% month on month to 55,333 mt, JLC’s data shows.

Bonded bunker fuel sales by Chimbusco, Sinopec (Zhoushan), SinoBunker and China Changjiang Bunker (Sinopec) settled at 490,000 mt, 610,000 mt, 60,000 mt and 30,000 mt, respectively. In the meantime, suppliers with regional bunkering licenses sold 470,000 mt, the data indicates.

Overall bunkering demand was relatively flat in September, though it used to be seasonally strong. 

Meanwhile, ports in East China were hit hard by two strong typhoons, and certain ports suspended their bunkering operation temporarily. In addition, domestic LSFO supply continued to decline as export quota tightness lingered, which also weighed down China’s sales.

China’s bonded bunker exports decrease in August

China’s bonded bunker fuel exports decreased in August, due to lower domestic production and ship congestion at Zhoushan Port.

The country exported about 1.55 million mt of bonded bunker fuel in the month, with the daily exports at 49,994 mt, a decline of 12.15% month on month and 4.91% year on year, JLC estimated, with reference to data from the General Administration of Customs of PRC (GACC).

Among the exports, heavy bunker fuel took about 1.46 million mt, accounting for 94.44% of the total, while light bunker fuel exports settled at 86,200 mt, making up 5.56%.

Dragging down the exports, Chinese refiners continued to cut their LSFO output amid quota tightness. These refiners produced about 1.16 million mt of LSFO in the month, with the daily production at 37,258 mt, a loss of 12.37% from the prior month and 9.62% from a year earlier, JLC’s data shows.

In addition, the explosion of a container ship at Ningbo-Zhoushan Port on August 9 and a surge of fishing vessels caused congestion of ships in Zhoushan, depressing the port’s bunkering operation and adding to the downward pressure on China’s exports.

China exported a total of 12.91 million mt of bonded bunker fuel in the first eight months of this year, with the daily exports at 52,901 mt, down by 5.89% from the same months in 2023. Heavy bunker fuel exports stood at 12.17 million mt in the period, accounting for 94.32%, while light bunker fuel exports settled at 733,800 mt, accounting for 5.68%.

China’s bonded bunker fuel exports are expected to plunge in September and the fourth quarter, because of tight quotas on LSFO exports. The country has recently released this year’s third batch of LSFO export quotas, setting the quotas on only 1.0 million mt, sources said. The release brought the total 2024 quotas to 13.00 million mt, dropping by 1.29% from those for 2023 (13.17 million mt for 2023 after conversion).

Domestic-trade heavy bunker fuel demand rallies in September

Domestic-trade heavy bunker fuel demand rallied in September, boosted by pre-holiday restocking before the National Day holiday.

Domestic-trade heavy bunker fuel demand climbed to 390,000 mt in the month, up by 30,000 mt or 8.11% from the prior month, JLC’s data shows.

Capping the upside, however, some ports were briefly closed amid strong typhoons.

On the contrary, domestic-trade light bunker fuel demand slipped to 140,000 mt in September, down by 10,000 mt or 6.67% month on month. Continuous drops in diesel prices triggered bearish sentiment in the light bunker fuel market, and many shipowners still stood on the sidelines.

Bunker Fuel Supply

China’s bonded bunker fuel imports plunge in August

China’s bonded bunker fuel imports plunged in August, as imported LSFO lacked price advantage and domestic HSFO inventory was relatively high.

The country imported about 352,900 mt of bonded bunker fuel in the month, a cut of 23.10% month on month, JLC estimated, with reference to data from the GACC.

Though domestic LSFO production fell on tighter export quotas, bonded distributors did not import any LSFO in the month, as the economic efficiency of imported LSFO stayed relatively low. Meanwhile, these distributors cut their HSFO imports, as their stockpiles were relatively high. The imports of MGO held largely stable in August.

Regarding the imports by source, Malaysia remained the largest bonded bunker fuel supplier to China with 175,000 mt, accounting for 49.60% of the latter’s total imports. South Korea climbed to the second place with 94,400 mt, accounting for 26.77%, followed by Iraq with 83,400 mt, occupying 23.63%.

On a year-on-year comparison, however, China’s bonded bunker fuel imports grew by 15.14% in August.

In January-August, China imported approximately 2.79 million mt of bonded bunker fuel, an increase of 11.86% year on year, accelerating from an 11.40% boost in January-July.

China’s bonded bunker fuel imports are expected to jump in the coming months of this year, as domestic LSFO supply will further tighten amid a shortage of export quotas. China has recently issued quotas on only 1.0 million mt of LSFO exports for this year’s third batch, much lower than previously expected.

Domestic-trade heavy bunker fuel supply grows in September

Domestic-trade heavy bunker fuel supply grew in September, as the availability of blendstock rose and downstream replenishment increased, but the supply growth was limited to some degree by worse blending margins.

Chinese blenders supplied about 400,000 mt of heavy bunker fuel in the month, a boost of 20,000 mt or 5.26% from a month earlier, JLC’s data shows.

At the same time, domestic-trade MGO supply settled at 170,000 mt, unchanged month on month, the data shows. Refineries maintained relatively high operating rates, and domestic oil product supply remained relatively abundant.

Bunker Prices, Profits

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Yvette Luo
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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 earlier periods are available here.

Photo credit: JLC Network Technology
Published: 14 October, 2024