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JLC China Bunker Market Monthly Report (January 2022)

China’s bonded bunker fuel sales dropped in January because of Chinese New Year holidays and the recurrence of COVID-19 in Ningbo, showed JLC data.

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Bonded bunker fuel sales in Zhoushan Jan 2022

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

Bunker Fuel Demand

Bonded bunker fuel sales drop in January

China’s bonded bunker fuel sales dropped in January because of the holiday for the Chinese New Year and the recurrence of COVID-19 in Ningbo, despite China’s price advantage and fair demand from surrounding countries’ ships.

China’s bonded bunker fuel sales dropped to 1.55 mln mt in January, falling by 12.8% month on month, JLC’s data showed.

Chimbusco and Sinopec sold about 610,000 mt and 660,000 mt of bonded bunker fuel in the month, JLC’s data shows. Bonded bunker fuel sales for SinoBunker and China ChangJiang Bunker (Sinopec) were about 80,000 mt and 35,000 mt, respectively. Suppliers with the Zhoushan license recorded 157,000 mt of sales and those with the Shenzhen license sold 11,000 mt of bonded bunker fuel.

China exported 1.39 mln mt of bonded bunker fuel in December 2021, down 25.23% month on month, the GAC data shows.

The country’s heavy bunker fuel exports were 1.3 mln mt and light MGO exports were 88,100 mt in December 2021, accounting for 93.65% and 6.35%, respectively.

Bonded bunker sales for state-owned enterprises were 1.22 mln mt, accounting for 87.68%. Specifically, bonded bunker fuel sales were 586,300 mt for Sinopec, 568,400 mt for Chimbusco, 40,400 mt for SinoBunker and 21,400 mt for China ChangJiang Bunker (Sinopec). Sales for independent enterprises were 171,000 mt, accounting for 12.33%.

China Bunker Exports by Region Jan 2022
China Major Blending Producers Sunker Supply Jan 2022

Domestic bunker fuel demand slips in January

Domestic bunker fuel demand edged down in January as trade atmosphere weakened toward the Chinese New Year. As the previous replenishment for rigid demand gradually came to an end, end-users took a wait-and-see attitude toward the market. The demand for domestic-trade heavy bunker fuel was about 330,000 mt in January, down 10,000 mt month on month. The demand for light bunker fuel was 130,000 mt in month, also down by 10,000 mt from December.

Bunker Fuel Supply

Bonded bunker fuel imports plunge in December

China’s bonded bunker fuel imports plunged in December, mainly because of ample supply of domestic low-sulfur resources and low bunker fuel demand in the year end. In addition, traders cut their imports in December as imported fuel still lacked price advantage. The country imported about 406,100 mt of bonded bunker fuel in December, falling by 54.69% month on month and 63.01% year on year, GAC data showed.

Specifically, Singapore ranked first among the suppliers by exporting 199,000 mt of bunker fuel to China, accounting for 49% of the total volume. Imports from the UAE, South Korea and Russia were 85,200 mt, 78,200 mt and 43,600 mt, accounting for 21%, 19% and 11% respectively.

Bonded bunker fuel imports by source Jan 2022

Domestic blended bunker fuel supply flat with December

Chinese blending producers supplied a total of around 340,000 mt of heavy bunker fuel in January 2022, flat with a month before, JLC’s data showed. In north China, the operating rates stayed low with the advent of the Beijing Winter Olympics. Refiners in east China supplied only a small amount of bunker fuel in the month.

Shale oil and light coal tar supply was tight and the overall supply was not adequate. There was rigid demand in the market near the Spring Festival, so blenders based their production on sales. As for light oil, overall supply slipped amid shortage of feedstocks. Domestic light bunker oil supply was about 130,000 mt in January, down by 10,000 mt from the previous month, JLC’s data shows.

Arrival of imported fuel oil cargoes Jan 2022

Bunker Prices, Profits

China Main oil blending feedstock prices Jan 2022
China Domestic Trading 180 cSt bunker fuel price Jan 2022
China blendding profit by region Jan 2022

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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.

Photo credit: JLC Network Technology
Published: 14 March, 2022

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Research

Yamna identifies five potential global ammonia bunkering hubs

Unlike methanol, ammonia is not constrained by biogenic CO2 availability, and its production process is relatively simple.

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Yanma projected ammonia bunkering hubs

Specialised green hydrogen and derivatives platform Yamna in early December identified several potential ammonia bunkering hubs around the world.

The hubs are Port of Rotterdam, Port of Algeciras, Suez Canal, Jurong Port, and Port of Salalah.

“The shipping industry faces an ambitious challenge: reducing emissions by 20% by 2030 (compared to 2008 levels) and achieving net-zero emissions by 2050, in alignment with IMO targets,” it stated.

“Achieving these goals in the medium to long term depends on the adoption of alternative low-emission fuels like green ammonia and methanol.

“Among these, ammonia is attracting growing interest as a viable option. Unlike methanol, it is not constrained by biogenic CO2 availability, and its production process is relatively simple.”

However, the firm noted kickstarting ammonia bunkering on a large scale required four enablers to align:

  • Ammonia fuel supply
  • Application technology
  • Bunkering infrastructure
  • Safety guidelines and standards

It believed ammonia bunkering hubs will first emerge where affordable and scalable ammonia supply is available.

Yanma Why use ammonia for bunkering fuel

 

Photo credit: Yanma
Published: 31 December 2024

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Research

Port of Long Beach releases Clean Marine Fuels White Paper

Document intended to prepare and position the port and its stakeholder for adopting low carbon alternative fuels.

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Clean Marine Fuels Port of Long Beach (December 2024)

The Port of Long Beach (PLB) in late December released the Clean Marine Fuels White Paper as part of efforts to identify solutions capable of reducing emissions from ships.

“To understand the opportunities and challenges related to the adoption of clean marine fuels, the Port of Long Beach hired ICF Consulting to develop this white paper as an educational resource and guidance document,” stated PLB

“This document is also intended to prepare and position the port and its stakeholder for adopting low carbon alternative fuels.

“The white paper provides high level information on the array of currently available low carbon marine fuels, along with an exploration of the potential infrastructure needs for their deployment.”

The document covers the use of different types of clean bunker fuels such as green hydrogen, green methanol, green ammonia, renewable LNG and biofuels for shipping.

“The shift to clean marine fuels is no longer optional but a necessity for the sustainability of the maritime industry,” stated PLB in its closing remarks.

“This transition, while presenting challenges such as high costs, limited fuel availability, and the need for extensive infrastructure development, is advancing due to evolving policy frameworks and growing industry commitment.

“Addressing these obstacles will require targeted initiatives and robust collaboration between public and private sectors. Continued policy support, government funding, and sustained industry commitment will be essential to driving this progress and ensuring the long-term sustainability of maritime operations.”

Editor’s note: The 123-page Clean Marine Fuels White Paper may be downloaded from the hyperlink here.

 

Photo credit: Clean Marine Fuels White Paper
Published: 26 December 2024

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Port & Regulatory

Clyde & Co: FuelEU Maritime Series – Part 6: Legal issues

Bunker purchasers should consider the wording of their bunker supply contracts carefully and ensure that they are comfortable with the contractual provisions.

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CHUTTERSNAP MT

Global law firm Clyde & Co on Thursday (19 December) released the final instalment of its six-part series uncovering the FuelEU Maritime Regulation.

In it, the firm looked at the legal issues that could potentially arise between various parties, such as owners, charterers, ship managers, bunker suppliers, and ship builders, as a result of the compliance requirements imposed by the Regulation.

The following is an excerpt from the original article available here:

Bunker supply contracts - legal issues

Both vessel owners and bunker purchasers will want to ensure that they are able to take advantage of the preferential treatment provided under the FuelEU Regulation for consuming renewable fuels, including biofuels and renewable fuels of non-biological origin (RFNBOs) (such as methanol and ammonia).

Article 10 of the FuelEU Regulation states that such fuels must be certified in accordance with the Renewable Energy Directive (RED) 2018/2001. If the fuel consumed by the vessel does not meet the applicable standards or have the appropriate certification, then it “shall be considered to have the same emissions factors as the least favourable fossil fuel pathway for that type of fuel[1].

In order to confirm that the fuel complies with greenhouse gas (GHG) intensity and sustainability requirements, the vessel owner and bunker purchaser will want to ensure that the bunker supplier provides the appropriate certification required under the FuelEU Regulation. The EU has required certification of such fuels, with the aim of guaranteeing “the environmental integrity of the renewable and low-carbon fuels that are expected to be deployed in the maritime sector.”[2]

The FuelEU Regulation provides that the GHG intensity of fuel is to be assessed on a “well-to-wake” basis, with emissions calculated for the entire lifespan of the fuel, from raw material extraction to storage, bunkering and then use on board the vessel.

Vessel owners and bunker purchasers will, therefore, need to be mindful of the importance of establishing how “green” the fuel actually is, and of the risk of bunker suppliers providing alternative fuels that will not allow for preferential treatment under the FuelEU Regulation.

It would, therefore, be advisable for bunker purchasers to consider whether the wording of their bunkering supply contracts is sufficient to ensure that the fuel is properly certified under the FuelEU Regulation. This could include contractual provisions that require the supplier (i) to provide a bunker delivery note (BDN), setting out the relevant information regarding the supply (such as the well-to-wake emission factor), and (ii) to provide the necessary certification under a scheme recognised by the EU.

Bunker purchasers should also be mindful that bunkering supply contracts often contain short claims notification time bars and provisions restricting claims for consequential loss. Issues could therefore arise where a purchaser tries to advance a claim against the supplier for consequential loss due to a lack of certification, but the bunker supplier argues that such losses are excluded under the terms of the bunker supply contract.

Bunker purchasers should therefore consider the wording of their bunker supply contracts carefully and ensure that they are comfortable with the contractual provisions.

 

Photo credit: CHUTTERSNAP from Unsplash
Published: 26 December 2024

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