Business

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.

Published

2 years ago

January 12, 2023

Admin

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.

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.

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.

Bunker Prices, Profits

Editor
Yvette Luo
+86-020-38834382
[email protected]

Sales (Beijing)
Tony Tang
+86-10-84428863
[email protected]

Sales (Singapore)
Ginny Teo
+65-31571254
[email protected]
[email protected]

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.

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

Financial Result

CBL International gross profit down 32.2% on year for 1H 2024

Decline primarily driven by reduction in premium sold to customers; leading to lower gross profit per tonne even though there was an increase in volume sold, says CBL.

Published

2 days ago

September 13, 2024

Admin

CBL International Limited (CBL), the listing vehicle of Banle Group (Banle), a marine fuel logistic company in the Asia-Pacific region, on Thursday (12 September) announced its unaudited financial results for the six months ended 30 June.

CBL said its gross profit for the period was approximately USD 2.72 million, a decrease of 32.2% compared to USD 4.01 million for 1H 2023.

The firm said the decline was primarily driven by the reduction in premium sold to customers and led to lower gross profit per tonne, which was partially offset by an increase in volume sold.

CBL also reported its Consolidated revenue for 1H 2024 increased by 44.4% to approximately USD 277.23 million, compared to USD 191.96 million in the same period in 2023.

“This significant growth was driven by a 39.4% year-over-year increase in sales volume, attributed to the expansion of the Company's global supply network and higher marine fuel demand due to geopolitical factors,” it said.

The company announced the pricing of its initial public offering on Nasdaq Capital Market on 22 March last year.

“We are pleased with the robust growth in our revenue and sales volume during the first half of 2024, despite the challenging market conditions. Our strategic initiatives, including the expansion of our service network and our focus on sustainable fuel solutions, have positioned us well to navigate these challenges and capitalise on emerging opportunities,” said Teck Lim Chia, Chairman & CEO of Banle Group.

“While the current market environment has pressured our margins, we remain confident in our long-term strategy and our ability to deliver value to our shareholders.”

Other Financial Highlights:

Operating Expenses: Operating expenses rose by 64.0% to approximately USD 4.12 million, up from USD 2.51 million in 1H 2023. This increase was attributed to higher selling and distribution expenses related to our sales growth, strategic expansion in the Company's supply network to new geographic areas, and the development of our biofuel operations.
Net Income: The company reported a net loss of approximately USD 1.62 million, compared to a net income of USD 1.15 million in 1H 2023. The loss was driven by lower gross margin and higher operating costs.
Cash Flow: Net cash provided by operating activities was approximately USD 2.30 million, a significant improvement from a cash outflow of USD 7.24 million in 1H 2023, reflecting better management of working capital.
Cash position: As of June 30, 2024, Banle's consolidated cash balance increased by approximately USD 2.29 million, or 30.9%, to USD 9.69 million, compared to USD 7.40 million as of December 31, 2023. This increase was primarily driven by improved working capital management. The Company also reported a significant increase in accounts receivable and accounts payable balances, reflecting the growth in its sales activities.

Operational Highlights:

Global Network Expansion: As of June 30, 2024, Banle expanded its global service network from 36 ports at our IPO in March 2023 to over 60 ports across Asia, Europe and Africa. This strategic expansion has enabled the Company to secure new bunkering business opportunities, particularly in European markets where environmental regulations are increasingly stringent. The opening of the Company's new office in Ireland in late 2023 has bolstered our market coverage and enhanced local sourcing capabilities. Notably, the Company completed inaugural bunkering services through a local physical supplier in Mauritius in May 2024, further strengthening our market presence.
Biofuel Initiatives: Banle continued its commitment to sustainability by expanding its B24 biofuel operations, obtaining ISCC EU and ISCC Plus certifications in 2023. The Company successfully commenced biofuel bunkering services through local physical suppliers in Hong Kong, China, and Malaysia, positioning itself as a pioneer in sustainable fuel solutions. The B24 biofuel blend, which includes 24% UCOME (used cooking oil methyl ester), offers a 20% reduction in greenhouse gas emissions compared to conventional marine fuels, aligning with global decarbonisation efforts.
Response to Macroeconomic Environment: The global economy has shown signs of moderate growth in 2024, with emerging markets, particularly in Asia, driving this recovery. However, the shipping industry continues to face challenges such as fluctuating freight rates, port congestion, and disruptions in major trade routes due to the ongoing Red Sea Crisis. Banle has proactively adapted to these conditions, coordinating increased fuel supplies in Asian ports to meet heightened demand, ensuring that our customers' needs are met despite logistical challenges.

Looking ahead, Banle said it remains focused on expanding its market presence, particularly in the biofuel sector, and continuing to enhance its global supply network.

Photo credit: Essow on Pexels
Published: 13 September, 2024

Alternative Fuels

KPI OceanConnect expands Asia footprint with new Tokyo office

New office will help existing and new clients navigate increasing operational complexity in the marine energy sector, from new alternative bunker fuels to tightening environmental regulations.

Published

2 days ago

September 13, 2024

Admin

KPI OceanConnect expands Asia footprint with new office in Japan

Marine energy solutions provider KPI OceanConnect on Thursday (12 September) announced the opening of its new office in Tokyo, Japan, to strengthen its regional presence and support to local customers.

The office is KPI OceanConnect’s fifth in Asia, reflecting an increasing commitment to strategic growth in the region.

Japan is a leading innovator in the maritime industry, operating the third largest merchant fleet and is an important market for KPI OceanConnect.

The new office, led by Ken Kobayashi, Head of Japan, will help existing and new clients navigate increasing operational complexity in the marine energy sector, from new alternative fuels to tightening environmental regulations.

The announcement follows KPI OceanConnect’s recent publication of robust financial results for the year 2023/2024 and demonstrates its continued commitment to investing in building strong partnerships across the marine fuels value chain worldwide.

The expansion of the local team in Japan will enable KPI OceanConnect to actively engage with Japanese buyers and suppliers on a daily basis to exchange knowledge and expertise to support the development of innovative energy transition strategies for its clients.

The launch of the new office was celebrated with an opening reception on 10 September. The event was attended by the group’s owner, Nina Østergaard Borris and the Executive Management team of KPI OceanConnect, including Anders Grønborg, CEO, Dorthe Bendtsen, COO, and Jesper Sørensen, Global Head of Alternative Fuels and Carbon Markets.

To celebrate this milestone, KPI OceanConnect hosted an opening reception at the XEX Tokyo restaurant, just steps away from its new office in the Burex building. The event also featured music by DJ Yumi.

Anders Grønborg, CEO of KPI OceanConnect, said: “KPI OceanConnect has worked closely with clients in Japan for a very long time. As a key market for our sector and our business, this new office allows us to be closer to our customers and other important local stakeholders.”

“It is a time of transformation in the maritime value chain, and we are ready to work with our partners to identify opportunities for further collaboration and innovative solutions. We believe that our values of decency, good governance, transparency and long-term sustainability resonate well in this market.”

Ken Kobayashi, Head of Japan, KPI OceanConnect, said: “KPI OceanConnect is here to support its clients in turning today’s challenges and future uncertainties into opportunities for growth and innovation. From new fuels to new regulations, our network of experts is focused on delivering tailored, value-adding services to clients to future-proof their decision making, no matter the complexity.

“With a partnership-driven approach, we’re enabling greater transparency and innovation and are helping rewrite the bunkering playbook to support clients through the energy transition.”

Photo credit: KPI OceanConnect
Published: 13 September, 2024

Alternative Fuels

European shipowners and bunker fuel producers launch Clean Maritime Fuels Platform

Members of the initiative include ECSA, FuelsEurope, eFuel Alliance, European Waste-based & Advanced Biofuels Association, HydrogenEurope and Methanol Institute.

Published

2 days ago

September 13, 2024

Admin

European shipowners and bunker fuel producers launch Clean Maritime Fuels Platform

The European Community Shipowners’ Associations (ECSA) on Thursday (12 September) announced the launch of the Clean Maritime Fuels Platform.

The new Clean Maritime Fuels Platform is a bottom-up industry initiative aiming to enhance communication between the shipping sector and fuel producers and to identify common challenges and possible solutions, considering the implementation of the Fit for 55 package and the transition to a net-zero economy by 2050.

Members of the initiative include ECSA, FuelsEurope, eFuel Alliance, European Waste-based & Advanced Biofuels Association (EWABA), HydrogenEurope and Methanol Institute.

According to ESCA, access to clean maritime fuels is a top priority for the decarbonisation of the shipping sector.

The recently published Draghi report on the Future of European Competitiveness identifies shipping as one of the most difficult sectors to decarbonise, requiring around 40 billion in annual investments between 2031 and 2050.

The report highlighted that, while the EU is a world leader in sustainable renewable and low-carbon fuels for the decarbonisation of transport, it has limited installed capacity and planned production. The EU needs to start building a supply chain for clean fuels, or the costs of meeting its targets will be significant.

Representatives of ECSA, FuelsEurope, eFuel Alliance, EWABA, HydrogenEurope and Methanol Institute held their first meeting on 12 September and agreed on the objectives and the working principles of the new platform. Members also started to discuss the key topic of infrastructure gaps.

The platform will focus on policies and tools to support the production and uptake of clean maritime fuels in Europe including areas such as maritime in EU ETS and funding opportunities.

The platform will hold regular meetings with ECSA taking care of the secretariat’s tasks.

“Today, the shipping and energy industry join forces and launch a dialogue platform that can facilitate better flow of information about the common challenges we are facing. We need all hands on deck to make the energy transition happen. In order to meet our targets, we need clean fuels available in the market in sufficient quantities and at an affordable price. European shipowners are proud to launch with the fuel producers the Clean Maritime Fuels Platform”, said Sotiris Raptis, ECSA Secretary General.

“We are very excited to launch the Clean Maritime Fuels Platform today. Our 55+ members from across the EU are working tirelessly to produce waste-based and advanced biodiesel of the highest quality requirements and GHG savings to bring a new era of clean shipping to Europe. We believe that a closer collaboration between renewable fuel suppliers and ship owners will significantly reduce technical, operational, and financial barriers across the supply chain for the development and uptake of renewable maritime fuels”, said Angel Alvarez Alberdi, Secretary General of EWABA.

“The energy transition is a gradual journey, not an overnight change. It demands a robust regulatory framework and collaboration among all stakeholders involved to drive effective decarbonization. As we work alongside our 100 members through the complexities of this transition, the Clean Fuels Maritime Platform will play a crucial role in accelerating our shift to cleaner fuels and innovative technologies. By combining our collective expertise and efforts, we are not only tackling the pressing need for emission reductions but also laying the groundwork for a more resilient and sustainable maritime industry”, said Greg Dolan, CEO of Methanol Institute.

Photo credit: European Community Shipowners’ Associations
Published: 13 September, 2024