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JLC China Bunker Market Monthly Report (December 2022)

China tallied a dip in its bonded bunker fuel sales in December, amid dwindling consumption, a weak global economy and tightening supply in northern regions.

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Beijing-based commodity market information provider JLC Network Technology Co. recently shared its JLC China Bunker monthly report for December 2022 with Manifold Times through an exclusive arrangement:

Bunker Fuel Demand

China tallies a dip in bonded bunker fuel sales in December

China tallied a dip in its bonded bunker fuel sales in December 2022, amid dwindling consumption, a weak global economy and the tightening supply of bonded resources in northern regions.

The country sold about 1.53 million mt of bonded bunker fuel in the month, edging down by 0.65% month on month, JLC’s data shows. Specifically, the sales by Chimbusco, SinoBunker and China ChangJiang Bunker (Sinopec) slipped to 550,000 mt, 50,000 mt and 40,000 mt in the month respectively, while those by Sinopec Zhoushan climbed to 590,000 mt. In addition, suppliers with local licenses sold approximately 300,000 mt.

China saw a rebound in its bonded bunker fuel exports in November, owing to an uptick in domestic low-sulfur fuel oil (LSFO) production, also because of a relatively low base in October. The country exported about 1.29 million mt of bonded bunker fuel in November, a bounce of 4.95% month on month, according to the data from the General Administration of Customs of PRC (GACC).

Among the exports were close to 1.23 million mt of heavy bunker fuel and 68,300 mt of light marine gas oil (MGO), accounting for 94.72% and 5.28% of the total respectively.

Bonded bunker fuel exports by enterprises with national licenses amounted to 994,200 mt in the month, occupying 78.37% of the total, while those by enterprises with local licenses climbed to 280,000 mt, making up 21.63%, the data shows.

Some Chinese refineries continued to boost their LSFO production in the month, as state-owned refiners still had sufficient export quotas, resulting in a rise in bonded bunker fuel exports. China tallied about 1.40 million mt of LSFO output by Chinese refiners in November, growing by 5.34% month on month and 37.25% year on year, JLC’s data shows.

However, with domestic bonded bunker fuel prices falling, it was less profitable for refineries to produce LSFO. Under the interplay of abundant export quotas and fewer margins, most refineries maintained largely stable LSFO production in the month, putting a cap on the monthly margin growth.

Also underlying the increase in the exports was the relatively low base in the previous month. China’s bonded bunker fuel exports plunged to 1.23 million mt in October 2022, hitting a 31-month low, GACC data shows.

On a year-on-year comparison, however, the exports plunged by 30.23% in November, GACC data shows. The plunge mainly came as demand from the global shipping market had been strongly hit by the epidemic recurrence over the year.

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Domestic bunker fuel demand shrinks further in December

Domestic-trade bunker fuel demand shrank further in December as most downstream buyers still held a wait-and-see attitude when the negative impact of the epidemic lingered, though China gradually removed its virus-related restrictions.

The demand for heavy bunker fuel contracted to 340,000 mt in the month, down by 20,000 mt or 5.56% from November, JLC’s data indicates. Meanwhile, domestic-trade light bunker fuel demand slid to around 120,000 mt, a drop of 10,000 mt or 7.69% month on month. Light bunker fuel demand also moved lower, as buyers who were bearish on the bunker fuel market continued to base their purchases on rigid demand, despite a decline in prices of marine gas oil (MGO).

Bunker Fuel Supply

China’s Nov bonded bunker fuel imports rise to 12-month high

China’s bonded bunker fuel imports extended gains and hit a 12-month high in November when domestic supply stayed relatively tight, despite a rise in domestic low-sulfur fuel oil (LSFO) production.

The country imported approximately 630,000 mt of bonded bunker fuel in November, a leap of 25.02% from the previous month, according to data from the General Administration of Customs of PRC (GACC).

Malaysia became the largest supplier in the month, with 361,900 mt of bonded bunker fuel imports from the country, accounting for 57% of the total. Singapore ranked second by exporting 161,500 mt of bonded bunker fuel to China, making up 26%. South Korea took the third place with 106,700 mt, occupying 17%.

Chinese refiners continued to expand their bonded bunker fuel imports in the month as domestic supply was still relatively tight. Although some refineries raised their LSFO production amid sufficient export quotas, others still lacked production enthusiasm as production margins were further squeezed by falling bunker fuel prices.

Tracking a slump in international crude prices, international bunker fuel prices dropped rapidly in the month, and the drop was more significant than that in China’s bonded bunker fuel prices. Therefore, certain market participants were incentivized to increase their bonded bunker fuel imports.

On a year-on-year comparison, China’s bonded bunker fuel imports tumbled by 29.70%, GACC data shows. Underlying the plunge was a boost in domestic LSFO production. The country tallied about 1.40 million mt of LSFO output in November, surging by 37.25% year on year, JLC’s data shows.

China imported an accumulation of about 4.70 million mt of bonded bunker fuel in the first eleven months of 2022, a nosedive of 40.93% year on year, decelerating from a slump of 42.39% in January-October, GACC data shows.

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Domestic blended heavy bunker fuel supply decreases in December

Chinese blenders supplied 370,000 mt of heavy bunker fuel in December 2022, a fallback of 20,000 mt or 5.13% from the previous month, JLC’s data indicates.

Domestic blended heavy bunker fuel supply continued to tighten in the month, as blenders preferred low inventory with the year-end drawing near and dared not to make deals easily, though blendstock prices went down. In addition, some small oil suppliers exited the market ahead of the Spring Festival, which also contributed to the supply decline.

Conversely, the supply of domestic blended marine gas oil (MGO) climbed to 170,000 mt, gaining 20,000 mt or 13.33%, the data shows. As Chinese refiners had achieved their oil product export targets for 2022, the supply of diesel that flowed into the bunker field increased. 

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Bunker Prices, Profits

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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.

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 (November 2022)
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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: 12 January, 2023

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Fuel Testing

Singapore: CTI-Maritec shares testing protocols ahead of mandatory enhanced bunker fuel checks

In light of mandatory enhanced checks for marine fuel delivered at Singapore port coming into effect on 1 June, CTI-Maritec shares recommendations for fuel testing protocols, primarily focused at COCs and SAN detection for bunker supply in Singapore.

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With mandatory enhanced checks for marine fuel delivered at Singapore port coming into effect on 1 June, bunker fuel testing and marine surveying business Maritec Pte Ltd (CTI-Maritec) has published a newsletter providing recommendations on vital pre-emptive fuel testing measures vessels should be taking as part of their routine fuel testing and also recommendations on optimal testing options available when deep-dive analysis is required to determine a root cause: 

Introduction

On 8 February 2024 the Maritime and Port Authority of Singapore (MPA) issued a Port Marine Circular No 3 of 2024 regarding the implementation of enhanced testing parameters for marine fuel batches intended to be delivered as bunkers in the Port of Singapore in addition to the existing quality assurance measures.

In accordance with the MPA’s Port Marine Circular No 3 of 2024, from 1 June 2024 onwards, bunker suppliers in the Port of Singapore must ensure that:

  • Residual & Bio-residual bunker fuel do not contain Chlorinated Organic Compounds (COC) above 50mg/kg and are free from inorganic acids.
  • COC must be tested using the EN 14077 accredited test method and shall be reported in the “Certificate of Quality” (COQ) provided to receiving vessels.
  • Inorganic acids must use the ASTM D664 accredited test method as prescribed in ISO 8217 and the Strong Acid Number (SAN) (in addition to the Total Acid Number (TAN) shall be reported in the COQ (i.e. SAN = 0) provided to receiving vessels. For distillate / bio-distillate bunker marine fuel batches, SAN must be tested as per ASTM D664 test method and reported in the COQ.
  • Residual marine fuels are free from polystyrene, polypropylene & polymethacrylate. These can be tested by filtration, microscopic examination, & Fourier-Transform Infrared spectroscopy analysis.

Testing Recommendations in line with MPA Enhanced Parameters to Protect Your Vessels:

In view of the above, CTI-Maritec recommends fuel testing protocols as depicted in the chart below (as routine pre-emptive measures and/or for deep dive requirements to detect the root cause) to help safeguard vessel health.

Our recommendations are primarily focused at COCs and SAN detection for bunker supply in Singapore, while recommendations for testing Polymers are advised for requirements of reported problem cases or when highly abnormal GCMS findings of chemical compounds like Styrene, DCPD and Indene are detected.

COC & SAN GCMS testing Packages A to E

Related: Singapore: CTI-Maritec publishes whitepaper on upcoming mandatory enhanced bunker fuel tests
Related: Singapore: Marine fuel quality testing agencies applaud move for mandatory enhanced bunker fuel tests
Related: Singapore: MPA tightens testing parameters to reduce contaminated bunker fuels
Related: MPA: Glencore and PetroChina supplied contaminated bunkers to about 200 ships in the Port of Singapore

 

Photo credit: Louis Reed from Unsplash
Published: 29 May 2024

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Methanol

VPS conducts assessment on first SIMOPS methanol bunkering op in Singapore

Firm was appointed by OCI Methanol Europe to conduct a quantity and quality assessment of a methanol bunker fuel delivery to “Eco Maestro” in Singapore.

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VPS conducts assessment on first SIMOPS methanol bunkering op in Singapore

Marine fuels testing company VPS on Tuesday (28 May) said it was appointed by OCI Methanol Europe, part of the OCI Global Group, to conduct a quantity and quality assessment of a methanol fuel delivery to Eco Maestro in Singapore.

Captain Rahul Choudhuri, President Strategic Partnerships, VPS, said VPS survey experts Rafael Theseira and Muhd Nazmi Abdul Rahim were at hand during the methanol bunkering to ensure the 300 metric tonnes of methanol transfer was carried out smoothly, having been involved in the first methanol bunkering a year ago. 

Manifold Times recently reported X-Press Feeders, Global Energy Trading Pte Ltd (GET), and PSA Singapore (PSA) successfully completing the first simultaneous methanol bunkering and cargo operation (SIMOPS) in Singapore.

A X-Press Feeder container vessel, Eco Maestro, on its maiden voyage from Asia to Europe was successfully refuelled with close to 300 mt of bio-methanol by GET, a MPA licensed bunker supplier, using MT KARA

The ISCC-certified bio-methanol used for the SIMOPS was produced by green methanol producer OCI Global and supplied via GET, a ISCC-certified supplier.

Captain Choudhuri said the role of the marine, petroleum or bunker surveyor has evolved over the years in shipping and maritime affairs, but the principles have not - and that is to provide independent assessment of the quality and quantity of the product transfer. 

“This may seem obvious but this quality and quantity control is crucial to avoid commercial discrepancies, shortages or fraud,” he said.

“Safety training is critical and we have been on top of this having completed the required MPA fire-fighting course and the IBIA Methanol training course. We will work more with the Singapore Maritime Academy for trainings in future,” he added.

In August last year, Singapore-headquartered independent common carrier X-Press Feeders launched its first ever dual-fuel vessel Eco Maestro in China.

Manifold Times previously reported VPS stating it was the first company to complete a methanol bunker quantity survey (BQS) operation in Singapore on 27 July last year.

VPS was appointed by Maersk and Hong Lam Marine Pte Ltd, to undertake the very first bunker quantity survey (BQS) of a methanol fuel delivery, supplied by Hong Lam to the Maersk vessel on its maiden voyage to Europe. 

Related: First SIMOPS methanol bunkering operation completed in Singapore
Related: VPS completes quantity survey on Singapore’s first methanol bunkering op
Related: Singapore bunkering sector enters milestone with first methanol marine refuelling op
Related: X-Press Feeders launches its first methanol dual-fuel vessel “Eco Maestro” in China

 

Photo credit: VPS
Published: 29 May 2024

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LNG Bunkering

Gasum and Equinor ink continuation of long-term LNG bunkering agreement

Agreement builds on the success of the previous contract Gasum has had with Equinor; Gasum’s bunker vessels “Coralius”, “Kairos” and “Coral Energy” will be used for the bunkering operations.

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Gasum and Equinor ink continuation of long-term LNG bunkering agreement

Nordic liquefied natural gas (LNG) bunker supplier Gasum on Tuesday (28 May) said it signed a long-term contract with Norway-based global energy company Equinor whereby Gasum continues to supply LNG to Equinor’s dual-fuel chartered fleet of vessels. 

The agreement builds on the success of the previous contract Gasum has had with Equinor. Gasum’s bunker vessels Coralius, Kairos and Coral Energy will be used for the bunkering operations.

The agreement also includes additional support services such as cooling down and gassing up, which has also been a part of Gasum’s previous collaboration with Equinor. 

Gasum has organised three separate LNG cool down operations for Equinor in Skagen so far this year.

Both Gasum and Equinor have committed to sustainability goals to enable a cleaner energy future. Equinor’s ambition is to become a net-zero emissions energy company by 2050.

Using LNG in maritime transport means complete removal of sulfur oxides (SOx) and particles, and reduction of nitrogen oxides (NOx) emissions of up to 85 percent as well as a reduction in CO2 emissions by at least 20%. LNG is interchangeable with liquefied biogas (LBG/bio-LNG), which reduces carbon dioxide emissions by 90% compared to conventional fuel such as marine gasoil (MGO).

With LNG and bio-LNG the maritime industry can reduce emissions already today, instead of waiting for future solutions. Gasum’s strategic goal is to bring yearly seven terawatt hours (7 TWh) of renewable gas to market by 2027. Achieving this goal would mean combined carbon dioxide reduction of 1.8 million tons per year for Gasum’s customers.

Related: Equinor Energy AS extends LNG bunkering agreement with Gasum
Related: Gasum expands LNG bunkering business to ARA region through partnership with Equinor

 

Photo credit: Gasum
Published: 29 May 2024

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