Analysis

JLC China Bunker Market Monthly Report (July 2023)

China’s bonded bunker fuel sales fell back in July, due to bad weather in eastern regions; recorded 1.61 million mt of bonded bunker fuel sales with the daily sales dropping by 7.59% to 51,935 mt.

Published

2 months ago

August 11, 2023

Admin

JLC China Bunker Market Monthly Report (July 2023)

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

Bunker Fuel Demand

China’s bonded bunker fuel sales retreat in July

China’s bonded bunker fuel sales fell back in July, due to bad weather in eastern regions.

The country recorded about 1.61 million mt of bonded bunker fuel sales in the month, with the daily sales dropping by 7.59% to 51,935 mt, JLC’s data indicates. The sales by Chimbusco, Sinopec Zhoushan, SinoBunker and China ChangJiang Bunker (Sinopec) were550,000 mt, 630,000 mt, 70,000 mt and 40,000 mt, respectively. At the same time, suppliers with regional bunkering licenses sold about 320,000 mt, the data also shows.

Bunkering business in East China, especially at ports such as Ningbo Zhoushan Port, was hit hard by rains

and typhoons. Meanwhile, bonded bunker fuel supply decreased in East China, which also dragged down the sales in the region. However, the sales in North and South China, where refueling demand was largely stable, did not change much.

China’s bonded bunker fuel exports rise 8.32% in H1

China’s bonded bunker fuel exports rose by 8.32% in the first half of this year amid multiple factors, speeding up from a rise of 3.35% in January-May. The country exported a total of 10.41 million mt of bonded bunker fuel in the first six months, up from 9.61million mt in the same months in 2022, JLC estimated, with reference to data from the GeneralAdministrationof Customs of PRC (GACC).

Among these exports were 9.89 million mt of heavy bunker fuel and 522,100 mt of light bunker fuel, which respectively accounted for 94.99% and 5.01% of the total.

By supplier, enterprises with national bunkering licenses exported about 8.49 million mt of bonded bunker fuel in this period, accounting for 81.56%, and those with regional licenses exported 1.92 million mt, making up 18.44%.

China’s bonded bunker fuel exports plunged on year in January when shipping demand was seasonally weak. Meanwhile, bunkering business at Chinese ports was halted during the Chinese New Year holiday and China’s customs clearance was also affected by the holiday. However, the exports rallied in February as shipping demand recovered modestly and the operation of China’s customs returned to normal after the holiday.

Bonded bunker exports surged to a 14-month high in March, mainly because of larger low-sulfur fuel oil (LSFO) production. At the same time, bunker fuel prices at Chinese ports showed an advantage over surrounding ports, attracting more foreign shipowners. But the exports fell back in April, as domestic LSFO output hit a 17-month low, due to bad margins and unit maintenance.

Domestic supply of bonded bunker fuel increased in May-June, as Chinese refiners boosted their LSFO production amid slightly recovering margins and unit restarts. China released this year’s second batch of quotas on LSFO exports in May, encouraging refiners to expand exports.As a result, China’s bonded bunker fuel exports grew rapidly in the two months.

In June alone, China exported about 2.04 million mt of bonded bunker fuel, rising by 5.25% from the previous month and 34.96% from a year earlier. Heavy bunker fuel exports amounted to 1.93 million mt, accounting for 94.57%, and light bunker fuel exports were 110,900 mt, accounting for 5.43%.

Suppliers with national licenses exported roughly 1.67 million mt in the month, accounting for 81.58% of the country’s total, with Sinopec Fuel Oil and Chimbusco taking 76.85%. At the same time, enterprises with regional licenses exported 376,000 mt, accounting for 18.42%, with PetroChina Fuel Oil (Zhoushan, Shanghai and Guangzhou) taking 227,700 mt which occupied 11.15% of China’s exports and 60.56% of regional suppliers’ total.

Domestic-trade bunker fuel demand climbs in July

Domestic-trade heavy bunker fuel demand settled at 310,000 mt in July, a rally of 10,000 mt or 3.33% month on month, JLC’s data shows. Despite a modest bounce, heavy bunker fuel demand was still relatively tepid when typhoons forced some shipowners to suspend voyages.

Meanwhile, domestic-trade light bunker fuel demand rose to about 140,000 mt, up by 5,000 mt or 3.70% from a month earlier. The bunker fuel market improved slightly amid stronger diesel, but the improvement was capped by some buyers’ wait-and-see attitude.

Bunker Fuel Supply

China slashes its bonded bunker fuel imports in H1 2023

China slashed its bonded bunker fuel imports in the first six months of 2023, largely due to lofty import costs.

The country imported approximately 1.85 million mt of bonded bunker fuel in the first half of this year, a plunge of 24.43% from the corresponding period in 2022, slowing down from a slump of 27.66% in January-May, JLC estimated, with reference to data from the General Administration of Customs of PRC (GACC).

As the largest supplier in this period, Malaysia shipped about 952,100 mt of bonded bunker fuel to China, accounting for 51.41% of the latter’s total imports. Singapore came in second with 485,800 mt, occupying 26.24%, followed by South Korea with 310,200 mt, accounting for 16.75%. Meanwhile, inflows fromJapanwere roughly 103,700 mt, making up 5.60%.

China halved its bonded bunker fuel imports in the first quarter (Q1) of this year, with the monthly imports plunging to a historical low of 175,600 mt in March. Chinese distributors prioritized domestic bonded bunker fuel over imported one, as freight rates for imported cargoes were high and imported low-sulfur fuel oil (LSFO) lacked price advantages. Meanwhile, domestic bunker fuel supply increased when refiners boosted their LSFO production, which also dragged down the imports. The country produced a total of 3.80 million mt of LSFO in Q1, up from 3.56 million mt in the same quarter of 2022, JLC’s data shows.

However, the imports rose in the second quarter (Q2) as domestic supply tightened, though freight rates for imported cargoes were still high. In view of fewer margins and unit maintenance, refiners lowered their LSFO output to roughly 3.50 million mt in the quarter, a cut of 7.73% from the previous quarter and 8.87%fromQ22022, JLC’s data indicates. The import arbitrage window opened in Q2 when China’s bonded bunker fuel prices climbed, prompting some distributors to increase imports to fill the demand gap. Meanwhile, some traders hiked their high-sulfur fuel imports, due to the decline in domestic LSFO supply.

Into the second half (H2) of this year, high freight rates will continue to depress the imports. Domestic supply of low-sulfur bonded bunker fuel is expected to be largely stable, and importers will still favor domestic resources. China’s bonded bunker fuel imports may reach 4.00-4.50 million mt in 2023, according to JLC’s projection.

Domestic-trade bunker fuel supply increases in July

Domestic-trade heavy bunker fuel supply increased in July, as blenders raised output amid growing blendstock supply.

Chinese blenders supplied about 360,000 mt of heavy bunker fuel in the month, a boost of 30,000 mt or

9.09% from June, JLC’s data shows. Refineries supplied more low-sulfur residual oil after maintenance, enabling blenders to ramp up bunker fuel production. Meanwhile, blenders showed higher blending interest, as downstream buyers became bullish on bunker fuel prices and increased purchases.

Domestic-trade marine gas oil (MGO) supply settled at 170,000 mt in the month, jumping by 20,000 mt or 13.33% from a month earlier. Refineries supplied more light bunker fuel as coking margins grew sharply amid rising product prices.

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: 11 August, 2023

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ENGINE: Europe & Africa Bunker Fuel Availability Outlook

Analysis

ENGINE: Europe & Africa Bunker Fuel Availability Outlook (20 Sep 2023)

HSFO availability “super tight” in Gibraltar; South African authorities impound barges for tax violations; VLSFO and LSMGO supply normal in most Mediterranean ports.

Published

1 week ago

September 21, 2023

Admin

The following article regarding Europe and Africa bunker fuel availability has been provided by online marine fuel procurement platform ENGINE for post on Singapore bunkering publication Manifold Times:

HSFO availability “super tight” in Gibraltar
South African authorities impound barges for tax violations
VLSFO and LSMGO supply normal in most Mediterranean ports

Northwest Europe

HSFO availability has improved a bit in Rotterdam and in the wider ARA hub. Some suppliers can offer the grade for prompt delivery dates, unlike last month when supply was limited, a source says. Lead times of 5-7 days are still recommended for the grade to ensure full coverage from suppliers there, a source says.

Rotterdam’s HSFO price was trading around $595/mt on Wednesday, slightly down from levels of $620/mt seen last week. VLSFO and LSMGO availability remains normal in the ARA hub. Lead times of 4-6 days are recommended for VLSFO, and 1-3 days for LSMGO.

VLSFO and LSMGO availability remains normal for delivery off Skaw. Recommended lead times for both grades are around 7-10 days.

Mediterranean

HSFO availability is “super tight” in Gibraltar. Two bunker suppliers have almost run out of HSFO stock, while only one supplier has a decent amount of supply available. However, the supplier is taking advantage of the tight market by quoting prices unusually high for prompt supply, a source says. Tight supply of HSFO coupled with upward price pressure on VLSFO narrowed the port’s Hi5 spread to just $20/mt on Wednesday.

Gibraltar’s HSFO was indicated in a wide range of $35/mt on Wednesday, with indications for prompt dates often featuring towards the top of that price range. One supplier can supply the grade for delivery dates at the end of September, a source says. VLSFO and LSMGO availability is relatively better in Gibraltar. Lead times of 3-5 days are recommended for both grades.

Gibraltar, one of the biggest bunkering ports in the Mediterranean region, has experienced a lack of competition for HSFO sales. One bunker supplier in Portugal stopped offering HSFO after IMO’s 0.50% sulphur mandate came into force in 2020. Product availability has also been patchy in other bunker locations around the Mediterranean, such as Las Palmas, off Malta and Italian ports, partly because fewer suppliers offer the grade.

However, the narrowing of Gibraltar's Hi5 spread has diminished fuel cost savings against VLSFO for scrubber-fitted vessels. A Hi5 spread above $100/mt is typically considered lucrative for scrubber-fitted vessels burning HSFO.

HSFO is also almost out of stock in Livorno and Venice in Italy, a source says.

Other bunker delivery locations in the Mediterranean such as off Malta, Lisbon, Sines, Piraeus and Istanbul have normal availability of VLSFO and LSMGO, sources say.

Africa

Bunker operations have been restricted in Algoa Bay after the South African Revenue Service (SARS) recently detained five bunker barges over import duties disputes. SARS has demanded offshore bunkering companies pay excise duties for marine fuels imported into South Africa, sources say.

The bunker suppliers operating offshore have resisted SARS' demand by arguing that no import duties should be levied as the fuel is transferred via ship-to-ship (STS) operations without onshore involvement.

The disagreement between SARS and bunker suppliers has triggered concerns about a potential shutdown of offshore bunkering in Algoa Bay. One major bunker supplier in the bay has had its barges detained, while another company's barges are still operating but with limited product capacity, a source claims.

One vessel was receiving bunkers at anchorage, while two were held up waiting on Wednesday, according to Rennies Ships Agency. A total of 12 vessels are scheduled to arrive for bunkers in Port Elizabeth and Algoa Bay over the remaining days of the week.

Some ships seeking bunkers in the region have been diverted to other nearby ports, such as Durban, where the average waiting time for bunker-only calls is about 5-6 days, a source says. LSMGO availability is said to be tight in Durban and Richards Bay, with VLSFO supply also tightening in both ports.

VLSFO and LSMGO availability is good in Mozambique’s Nacala and Maputo ports, a source says. HSFO is almost out of stock in Nacala, where a replenishment cargo is only expected to arrive after 28 September.

By Nithin Chandran

Photo credit and source: ENGINE
Published: 21 September, 2023

Bunker Fuel

JLC China Bunker Market Monthly Report (August 2023)

Country sold roughly 1.80 million mt of bonded bunker fuel in the month, with the daily sales rebounding by 11.80% from the previous month to about 58,065 mt, JLC’s data indicates.

Published

2 weeks ago

September 13, 2023

Admin

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

Bunker Fuel Demand

China’s bonded bunker fuel sales rally in August

China’s bonded bunker fuel sales rallied in August, because of multiple factors.

The country sold roughly 1.80 million mt of bonded bunker fuel in the month, with the daily sales rebounding by 11.80% from the previous month to about 58,065 mt, JLC’s data indicates.

The sales by Chimbusco, Sinopec Zhoushan, SinoBunker and China ChangJiang Bunker (Sinopec) were 580,000 mt, 650,000 mt, 80,000 mt and 40,000 mt, respectively. Meanwhile, suppliers with regional bunkering licenses tallied about 450,000 mt of bonded bunker fuel sales.

Though the negative impact of bad weather lingered in Zhoushan and Ningbo, more shipowners came to refuel as bonded bunker fuel prices in the two regions were more competitive than those in Singapore. Meanwhile, the barging capacity at Shandong ports recovered to some degree, which also drove up the sales. On the other hand, however, the barging capacity at southern ports was insufficient amid tighter customs inspections, leading to a dip in the sales in South China.

China’s bonded bunker fuel exports drop in July

China’s bonded bunker fuel exports dropped in July, because of inclement weather and some other factors, despite a modest increase in domestic low-sulfur fuel oil (LSFO) production.

The country exported about 1.62 million mt of bonded bunker fuel in the month, down by 20.82% month on month and 4.63% year on year, JLC estimated, with reference to data from the General Administration of Customs of PRC (GACC).

Specifically, heavy bunker fuel exports amounted to about 1.53 million mt, accounting for 94.70% of the total, while light bunker fuel exports settled at 85,700 mt, making up 5.30%.

Regarding the exports by supplier, enterprises with national bunkering licenses exported roughly 1.30 million mt, accounting for 80.73% of the country’s total, with Sinopec Fuel Oil and Chimbusco taking 71.68%. Meanwhile, enterprises with regional licenses exported 311,500 mt, accounting for 19.27%, with PetroChina Fuel Oil (Zhoushan, Shanghai and Guangzhou) taking 194,800 mt which occupied 12.07% of China’s exports and 62.54% of regional suppliers’ total.

Bunkering business at some Chinese ports was disturbed by rains and typhoons, dragging down China’s bonded bunker fuel exports. Meanwhile, some shipowners’ refueling demand was also depressed by bad weather, which added to the downward pressure on the exports.

On the other hand, domestic bunker fuel supply increased moderately amid larger LSFO production, putting a cap on the decline in the exports. China produced about 1.35 million mt of LSFO in July, up by 61,000 mt or 4.73% month on month, with the daily output up by 1.35% to 43,548 mt, JLC’s data shows.

In the first seven months, China’s bonded bunker fuel exports totaled about 12.03 million mt, growing by 6.38% from the same months in 2022, slowing down from a boost of 8.32% in the first six months.

Domestic-trade heavy bunker fuel demand climbs further in Aug

Domestic-trade heavy bunker fuel demand climbed further in August, as most shipowners resumed voyages after typhoons and bullish sentiment popped up in the shipping market. Domestic-trade heavy bunker fuel demand increased to 330,000 mt in the month, up by 20,000 mt or 6.45% from the previous month, JLC’s data shows.

On the contrary, domestic-trade light bunker fuel demand shrank as continuously rising prices somewhat deterred buyers. Domestic-trade light bunker fuel demand settled at 130,000 mt in August, descending by 10,000 mt or 7.14% month on month.

Bunker Fuel Supply

China boosts bonded bunker fuel imports from Russia in July

China sharply boosted its bonded bunker fuel imports from Russia in July, because of large discounts on Russian cargoes.

Russia became the biggest bonded bunker fuel supplier to China in the month, supplying 275,000 mt to the latter, surging by 253.02% year on year and accounting for 82.34% of China’s total imports, JLC estimated, with reference to data from the General Administration of Customs of PRC (GACC). Chinese importers placed more orders for cargoes from Russia, because of significant price advantages for Russian cargoes.

Japan replaced Singapore as the second largest supplier by shipping 46,300 mt of bonded bunker fuel to China, rising by 18.72% month on month and accounting for 13.86% of China’s total.

South Korea remained in the third place with 10,700 mt, accounting for 3.20%, despite a plunge from 70,900 mt in June 2023. Meanwhile, inflows from Singapore tumbled to 2,000 mt, rapidly down from 140,100 mt in the previous month, sending the country to the fourth place. The imports accounted for 0.60% of the total.

Despite an upsurge in imports from Russia and Singapore, China’s total bonded bunker fuel imports dropped to 334,000 mt in July, a cut of 26.33% month on month and 5.28% year on year. Underlying the decline was an increase in domestic low-sulfur fuel oil (LSFO) output and relatively high freight rates for imported cargoes.

Domestic LSFO supply increased as Chinese refiners ramped up their production to quicken the utilization of export quotas, and production basically met demand for low-sulfur bunker fuel. China’s LSFO output settled at 1.35 million mt in the month, gaining 61,000 mt or 4.73% month on month, with the daily output up by 1.35% to 43,548 mt, JLC’s data shows.

Domestic-trade heavy bunker fuel supply increases in Aug

Chinese blenders supplied about 370,000 mt of domestic-trade heavy bunker fuel in August, an increase of 10,000 mt or 2.78% from a month earlier, JLC’s data shows. Blenders bought more low-sulfur residual oil as blendstock amid lower prices, and they continued to raise their bunker fuel output when downstream buyers increased purchases with a bullish attitude.

At the same time, domestic-trade marine gas oil (MGO) supply stabilized at 170,000 mt. Light bunker fuel supply was still relatively abundant amid good coking margins.

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]

Photo credit: JLC Network Technology
Published: 13 September, 2023

Analysis

ENGINE: China’s increased import of Russian bunker fuels in July driven by heavy discounts

Heavy discounts on Russian bunker fuels propelled Russia to become China’s biggest bonded bunker fuel supplier in July, after it delivered 275,000 mt bonded bunker fuel to China, JLC reported.

Published

1 month ago

August 28, 2023

Admin

Russia supplied 275,000 mt bonded bunker fuel to China in July, market intelligence provider JLC reported, citing data from China’s General Administration of Customs (GACC).

Heavy discounts on Russian bunker fuels propelled Russia to become China's biggest bonded bunker fuel supplier in July, JLC reported. The agency estimates that Russian bonded bunker fuel imports accounted for nearly 82% of China's total bonded bunker imports in July.

“Chinese importers placed more orders for cargoes from Russia, because of significant price advantages for Russian cargoes,” reported JLC. In July, bonded bunker fuel imports from Russia jumped by 253% from a year earlier in July, according to JLC’s estimates.

Japan became the second-biggest bonded bunker fuel supplier to China in July, and South Korea held the third position. Japan delivered 46,300 mt of bonded bunker fuel to China, accounting for 14% of the country’s total imports in July. Meanwhile, South Korea delivered 10,700 mt, accounting for 3% in July. Imports from South Korea plunged from 70,900 mt in June 2023, JLC stated in its report.

Similarly, imports from Singapore plummeted to 2,000 mt, marking a sharp decline from 140,100 mt in June. It accounted for less than 1% of China's total bonded bunker fuel imports in July, the agency added.

Despite a surge in imports from Russia, the country's total bonded bunker fuel imports fell to 334,000 mt in July, a decrease of 26% from total imports in June, and a 5% drop from a year earlier in July, the report further stated.

An increase in domestic VLSFO production coupled with high freight rates for imported cargoes prompted Chinese importers to cut down on bunker fuel imports in July, JLC said.

Chinese refineries have been ramping up production to utilise the export quotas, resulting in an increase in China’s domestic VLSFO supply. China supplied 1.35 million mt of VLSFO domestically in July, indicating a month-on-month increase of nearly 5%.

By Aparupa Mazumder

Source: ENGINE
Photo credit: David Yu from Pixabay
Published: 28 August, 2023