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JLC China Bunker Market Monthly Report (February 2023)

China’s bonded bunker fuel sales continued to drop in February as shipping demand slackened; sold about 1.46 million mt in the month, JLC’s data indicates.

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Beijing-based commodity market information provider JLC Network Technology Co. recently shared its JLC China Bunker monthly report for February 2023 with Manifold Times through an exclusive arrangement:

Bunker Fuel Demand

China’s bonded bunker fuel sales continue to drop in February

China’s bonded bunker fuel sales continued to drop in February, as shipping demand slackened amid flabby economy. The country sold about 1.46 million mt of bonded bunker fuel in the month, dipping by 34,000 mt or 2.28%month on month, JLC’s data indicates. In detail, the sales by both Chimbusco and Sinopec Zhoushan slid to 550,000 mt, down from 560,000 mt and 580,000 mt respectively. By contrast, the sales by SinoBunker and China ChangJiang Bunker (Sinopec) rose to 60,000 mt and 40,000 mt, up from 50,000 mt and 35,000 mt respectively. Meanwhile, suppliers with regional licenses sold roughly 260,000 mt, down from 269,000 mt in the previous month.

Bearish sentiment in China’s bonded bunker fuel market persisted and foreign shipowners still held await-and-see attitude. Meanwhile, bunker fuel supply in South China descended, which also contributed to the drop in sales. Still, China boosted its low-sulfur fuel oil (LSFO) production in the month, capping the drop in sales to some degree.

China cuts its bonded bunker fuel exports in Dec

China exported 1.20 million mt of bonded bunker fuel in the last month of 2022, a decline of 7.21%month on month and 13.42% year on year, JLC estimated, with reference to data from the General Administration of Customs of PRC (GACC).

Among these, heavy bunker fuel exports were 1.13 million mt, accounting for 94.19%, while MGO exports were 69,800 mt, making up 5.81%. The exports by suppliers with national licenses were 910,300 mt, accounting for 75.78% of the total exports, with Sinopec Fuel Oil, Chimbusco, SinoBunker and China ChangJiang Bunker (Sinopec) taking 404,000 mt, 444,900 mt, 49,800 mt and 11,600 mt respectively. At the same time, companies with regional licenses exported about 291,000 mt, making up 24.22%.

Chinese refiners cut their bonded bunker fuel exports, as demand in the shipping market remained weak when the negative impact of the epidemic lingered. Meanwhile, most refineries cut their LSFO production when they found fewer margins amid a fall in China’s bonded bunker fuel prices.

Given an outlook of recovering demand, China is expected to expand its bonded bunker fuel exports in 2023. Also, the country is likely to hike its LSFO production this year, making efforts to expand its bonded bunker fuel market. (Note: There is no update on export and import data for January, as the General Administration of Customs of the PRC is expected to combine January and February data instead of providing data for a single month. The combined data for January-February are expected to be released in late March, and JLC will update the data in the March version report.)

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Domestic bunker fuel demand recovers in February

Domestic-trade bunker fuel demand recovered in February, but the recovery was slower than expected due to relatively tepid shipping demand. Some shipowners showed low buying interest, as bunker fuel prices in East and South China were relatively high amid tightening supply.

Domestic demand for heavy bunker fuel gained 30,000 mt or 8.82% to 340,000 mt in February, and that for light bunker fuel jumped by 20,000 mt or 18.18% to 130,000 mt.

Bunker Fuel Supply

China’s bonded bunker fuel imports plunge in Dec 2022

China’s bonded bunker fuel imports plunged on month in December 2022, due to a decrease in Chinese buyers’ import interest coupled with a relatively high base in the previous month.

China tallied 414,300 mt of bonded bunker fuel imports in the month, tumbling by 34.24% month on month, JLC estimated, with reference to data from the General Administration of Customs of PRC (GACC).

Malaysia still led all suppliers in December, exporting 288,400 mt of bonded bunker fuel to China, accountingfor 70% of China’s total imports. Meanwhile, South Korea and Singapore ranked second and third with80,690 mt and 39,000 mt, occupying 21% and 9% respectively.

Domestic buyers sharply reduced their bonded bunker fuel imports, amid relatively steep international bunker fuel prices and high freight rates. Prices of China’s bonded bunker fuel with the maximum sulfur content at 0.5% averaged $605/mt in the month, a drop of 11.68% from a month earlier, more significant than a fall of 9.20% in Singapore’s prices. Domestic bunker fuel prices were still relatively competitive than imported ones.

Also underlying the plunge in the imports was a relatively high level in November. Chinese buyers had hiked their bonded bunker fuel imports to a 12-month high in November, and they lacked enthusiasm to further expand imports in December, with the year-end drawing near.

On a year-on-year comparison, however, the imports gained 2.02% in December.

The country imported an accumulation of 5.11 million mt of bonded bunker fuel in 2022, plummeting by 38.88% year on year, accelerating from a slump of 30.91% in 2021. The plunge was mainly due to booming domestic LSFO production. China produced about 15.90 million mt of LSFO last year, soaring 41.90%year on year, JLC’s data indicates. (Note: There is no update on export and import data for January, as theGeneral Administration of Customs of the PRC is expected to combine January and February data instead of providing data for a single month. The combined data for January-February are expected to be released in late March, and JLC will update the data in the March version report.) 

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Domestic bunker fuel supply increases in February

Domestic bunker fuel supply increased in February, as more ships came back online after the Chinese New Year holiday. Chinese blenders supplied about 360,000 mt of heavy bunker fuel in February, growing by 40,000 mt or 12.5% from a month earlier. Meanwhile, the supply of marine gas oil (MGO) settled at 145,000mt, a rise of 5,000 mt or 3.57%, JLC’s data shows.

Most of the blend stocks such as residual oil, light coal tar and coal-based diesel were delivered to North China, resulting in abundant bunker fuel supply and relatively high inventories in the region. However, the supply of blend stocks and bunker fuel was tight in South China, putting a cap on the increase in domestic-trade bunker fuel supply.

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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 (January 2023)
Related: JLC China Bunker Market Monthly Report (December 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: 16 May, 2023

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Incident

Singapore: Bunker spill leads to checks on all fuel pipes at other Police Coast Guard bases

Police said fuel pipes at the other three bases at Loyang, Lim Chu Kang and Gul are also being checked with inspections expected to be wrapped up on 10 February.

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The recent oil leak incident at Police Coast Guard (PCG) Brani Regional Base has prompted checks on all fuel pipes at PCG’s three other bases for leaks, according to The Straits Times on Monday (10 February). 

Responding to queries from the local news provider, the police said all fuel pipes at Brani Regional Base were inspected on 6 February while fuel pipes at the other three bases at Loyang, Lim Chu Kang and Gul are also being checked with inspections expected to be wrapped up on 10 February. 

The police also said that a preliminary assessment on the cause of the leak might be due to micro cracks in a damaged fuel pipe as a result of repeated twisting of the pipe due to the movement of the pontoons caused by tidal changes.

On 6 February, Singapore authorities confirmed that a diesel oil leak was discovered at the Brani Regional Base on 5 February, at around 11.40am (Singapore Time). 

According to a joint statement by Singapore Police Force, Maritime and Port Authority (MPA) and National Environment Agency (NEA), about 23 metric tonnes had leaked from a damaged shore fuel hose used to refuel patrol craft at Selat Sengkir. 

The leak was eventually isolated at about 3.40pm and there were no oil slicks observed.

Related: Singapore confirms bunker spill from damaged shore fuel hose at Brani Regional Base

 

Photo credit: Manifold Times
Published: 11 February, 2025

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Biofuel

NYK conducts first Japan bio bunker fuel trial on coal carrier for domestic power utility firm

Firm said it has started a biofuel test run on Noshiro Maru, operated by Tohoku Electric Power, marking the first time in Japan that a coal carrier has been used to test biofuel for a domestic power utility firm.

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NYK conducts first Japan bio bunker fuel trial on coal carrier for domestic power utility firm

Japanese shipping firm NYK on Monday (10 February) said it has started a biofuel test run on its coal carrier Noshiro Maru, which is operated by Tohoku Electric Power on 9 February.

This is the first time in Japan that a coal carrier has been used to test biofuel for a domestic power utility company. Mitsubishi Corporation Energy in the Keihin area facilitated the supply of biofuel for the vessel.

Biofuels are made from organic resources (biomass) of biological origin, such as agricultural residues and waste cooking oil, and are considered to produce virtually zero carbon dioxide (CO₂) emissions when combusted.

“Since they can be used in heavy-oil-powered ship engines, which are common on large merchant ships, biofuels are considered a key means of reducing greenhouse gas (GHG) emissions in the transition period from heavy oil to zero-emission fuels,” NYK said. 

“Using biofuel to reduce GHG emissions during sea navigation also contributes to reducing Scope 3 GHG emissions generated by transporting customers’ cargo.”

NYK added it will continue to focus on introducing biofuels and other next-generation fuels, and will contribute to reducing GHG emissions in our customers' supply chains while promoting decarbonisation in marine transport.

 

Photo credit: NYK
Published: 11 February, 2025

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Biofuel

IBIA welcomes IMO move to draft guidance change on carriage of bio bunker fuels

IBIA welcomed agreement by IMO’s Sub Committee on PPR 12 to draft Interim Guidance on the carriage of blends of biofuels and MARPOL Annex I cargoes by conventional bunker ships.

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The International Bunker Industry Association (IBIA) on Monday (10 February) said it submitted a document to IMO on the carriage of biofuels for supply to a ship for use as fuel oil on board that ship in November 2023.

This highlighted that as conventional bunker vessels were limited in carrying fuel oil of no more than 25% biofuel it presented a potential impediment to the global adoption of biofuels as fuel oil for ships and so to the ambition for the decarbonization of international shipping in the short term, as set out in the 2023 IMO GHG Strategy.

“IBIA therefore welcomes the agreement by IMO’s Sub Committee on Pollution Prevention and Response (PPR 12) to draft Interim Guidance on the carriage of blends of biofuels and MARPOL Annex I cargoes by conventional bunker ships,” it said on its website. 

The guidance allows conventional bunker ships certified for carriage of oil fuels under MARPOL Annex I to transport blends of not more than 30% by volume of biofuel, as long as all residues or tank washings are discharged ashore, unless the oil discharge monitoring equipment (ODME) is approved for the biofuel blend(s) being shipped. 

“The Interim Guidance is expected to be approved by IMO’s Marine Environment Protection Committee (MEPC 83) in April,” IBIA added. 

“IBIA’s membership represents stakeholders from across the global marine fuel value chain, and being able to draw on this technically strong and credible resource will, in its role of having consultative status to the IMO, mean that IBIA will continue to bring important matters to the attention of the wider IMO membership for due consideration.”

 

Photo credit: International Bunker Industry Association
Published: 11 February, 2025

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