Beijing-based commodity market information provider JLC Network Technology Co. recently shared its JLC China Bunker monthly report for June 2022 with Manifold Times through an exclusive arrangement:
Bunker Fuel Demand
Bonded bunker fuel sales continue downtrend in June
China’s bonded bunker fuel sales still went downhill in June when most ports remained short of fuel. China’s bonded bunker fuel sales moved lower to around 1.55 mln mt in the month, down 2.5% from May, JLC’s data shows.
Chimbusco and Sinopec sold about 580,000 mt and 660,000 mt of bonded bunker fuel in June, JLC’s data indicates. Bonded bunker fuel sales for SinoBunker and China ChangJiang Bunker (Sinopec) were 65,000 mt and 35,000 mt, respectively. Around 193,800 mt of of sales were made by suppliers who held local licenses, with PetroChina accounting for 75,400 mt.
An insufficiency in supply still hampered bonded bunker fuel sales during the month, causing a drop-off in sales at ports including Zhoushan and Dalian. In addition, sky-high fuel oil prices and low freight rates also made the Southern barge market run tight, limiting the sales volume.
China’s bonded bunker fuel exports rallied in May amid increasing production of low-sulfur fuel oil (LSFO) and a new batch of LSFO quotas.
China’s bonded bunker fuel exports climbed to 1.48 million mt in May 2022, up 14.9% month on month but down 9.18% year on year, according to data from the General Administration of Customs of the People’s Republic of China (GACC).
Among May’s exports were approximately 1.40 million mt of heavy bunker fuel and 72,900 mt of light MGO, accounting for 95.07% and 4.93% respectively.
State-owned enterprises exported about 1.26 million mt of bonded bunker fuel in the month, accounting for 85.37% of the total, while exports by independent enterprises settled at 216,100 mt, accounting for 14.63%.
Domestic bunker fuel demand holds steady in June
Domestic bunker fuel demand remained largely stable in June, owing to a mix of conditions when buyers raised their bids amid robust crude prices and tight supply but some ship owners suspended shipping due to high costs and excess shipping capacity.
The demand for domestic-trade heavy bunker fuel was around 320,000 mt in the month, growing by 10,000 mt or 3.23% month on month. Meanwhile, due to higher electricity consumption in the southern regions during hotter weather and more shipping of the fuel for power generation, demand for light bunker fuel increased by 10,000 mt, or 7.14%, to roughly 150,000 mt.
Bunker Fuel Supply
Bonded bunker fuel imports rise on stock shortage in May
China’s bonded bunker fuel imports saw a bounce in May as some Chinese bonded bunker suppliers were running out of their inventories.
The country imported about 354,200 mt of bonded bunker fuel in May 2022, rising 15.64% from a month before, according to the data from the General Administration of Customs of PRC (GACC).
Although the imported sources still lacked price advantages, some buyers had to purchase imported low-sulfur resources after using up their inventories as home-produced low-sulfur resources struggled to meet domestic demand. The supply of bonded bunker fuel was even suspended in certain places.
Despite a month-on-month rise, however, the arrivals of the imported bunker fuel were still relatively dull. On a year-on-year comparison, the bonded bunker fuel imports plunged 57.84% in May, GACC data shows.
Underlying the slump were steep import costs amid excessive freight rates for the cargoes and high premiums for imported bonded bunker fuel. In addition, the supply of low-sulfur fuel oil (LSFO) continued to tighten in Singapore and Malaysia, the two critical suppliers of LSFO to China, forcing most domestic buyers to give priority to domestic low-sulfur resources.
In terms of the source country, the UAE maintained its first place by exporting 202,800 mt of bonded bunker fuel to China, accounting for 57% of China’s total bonded bunker fuel imports. Malaysia climbed to the second place with 82,900 mt, accounting for 24%. The followings were Russia and South Korea, with 40,000 mt from Russia and 28,000 mt from South Korea, accounting for 11% and 8% respectively. The imports from Singapore tumbled to merely 500 mt, accounting for 0.14%.
Domestic blended bunker fuel supply remains in rise in June
Chinese blenders supplied around 380,000 mt of heavy bunker fuel in total in June 2022, a buildup of 50,000 mt or 15.15% from the previous month, JLC’s data shows. As for light bunker fuel, the domestic marine gas oil (MGO) supply stood at around 170,000 mt in the month, rising by 20,000 mt or 13.33% from May.
The blended bunker fuel supply expanded from the month before on the strength of improving demand following the easing of virus-related limitations and the increased restarts of refinery production in June.
In detail, the supply of low-sulfur asphalt had indeed shrunk, since profits from the coking and low-sulfur bonded bunker fuel sectors looked more encouraging. Meanwhile, available resources of shale oil and light coal tar were also under a cut during the month, albeit not a sharp one when market activity remained fair with blenders’ stable procurement. Going against the others, coal-based diesel supply was bumped up amid remarkable unit margins, by which a marked uplift was seen in the overall oil product output throughout the month.
Bunker Prices, Profits
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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.
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Related: JLC China Bunker Market Monthly Report (May 2022)
Related: JLC China Bunker Market Monthly Report (April 2022)
Related: JLC China Bunker Market Monthly Report (March 2022)
Related: JLC China Bunker Market Monthly Report (February 2022)
Related: JLC China Bunker Market Monthly Report (January 2022)
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: 13 July, 2022
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