Analysis

JLC China Bunker Market Monthly Report (June 2023)

China’s bonded bunker fuel sales rebounded rapidly in June; sold about 1.69 million mt of bonded bunker fuel in the month, with the daily sales rising by 13.48% to 56,200 mt.

Published

5 months ago

July 14, 2023

Admin

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

Bunker Fuel Demand

China’s bonded bunker fuel sales rebound in June

China’s bonded bunker fuel sales rebounded rapidly in June, due to multiple factors.

The country sold about 1.69 million mt of bonded bunker fuel in the month, with the daily sales rising by 13.48% to 56,200 mt, JLC’s data shows.

Bonded bunker fuel sales by Chimbusco, Sinopec Zhoushan, China ChangJiang Bunker (Sinopec) and SinoBunker were 570,000 mt, 630,000 mt, 40,000 mt and 70,000 mt, separately. Meanwhile, suppliers with regional bunkering licenses sold about 376,000 mt, the data also indicates.

Bonded bunker fuel prices at Chinese ports showed an advantage over neighboring ports, as the competition in China’s bonded bunker fuel market intensified. Meanwhile, the release of Shanghai Bonded Bunker Fuel Quotation enhanced the competitiveness of local ports and attracted more ships to refuel. In addition, the sales at some northern ports, including Qingdao Port and Rizhao Port, increased after the supply tightness of ships in North China basically eased.

China boosts its bonded bunker fuel exports in first five months

China boosted its bonded bunker fuel exports in the first five months of this year, because of larger low-sulfur fuel oil (LSFO) production and a low base a year before.

The country tallied about 8.37 million mt of bonded bunker fuel exports in January-May, a gain of 3.35% from the same months in 2022, reversing a decline of 2.89% in January-April, JLC estimated, with reference to data from the General Administration of Customs of PRC (GACC).

Heavy bunker fuel exports were 7.96 million mt in this period, making up 95.09% of the total, while light bunker fuel exports were 411,200 mt, occupying 4.91%.

Regarding the exports by supplier, enterprises with national bunkering licenses exported about 6.83 million mt of bonded bunker fuel in the five months, accounting for 81.56%, and those with regional licenses exported about 1.54 million mt, accounting for 18.44%.

Domestic supply of bonded bunker resources increased as Chinese refiners raised their LSFO output. China produced a total of 6.01 million mt of LSFO in the five months, a modest rise of 0.72% year on year, JLC’s data shows.

Larger exports were also ascribed to a low base a year earlier when global bunkering demand was dampened by new outbreaks of the virus. China’s bonded bunker fuel exports totaled 8.10 million mt in January-May 2022, down from 8.65 million mt in the same period of time in 2021.

China exported about 1.94 million mt of bonded bunker fuel in May, soaring by 35.49% month on month and 31.28% year on year. The exports of heavy bunker fuel and MGO were 1.85 million mt and 87,400 mt, accounting for 95.49% and 4.51% respectively.

Suppliers with national bunkering licenses recorded about 1.61 million mt of bonded bunker fuel exports last month, accounting for 82.87%, with Sinopec Fuel Oil and Chimbusco taking 75.32%. Meanwhile, enterprises with regional licenses exported 332,300 mt, accounting for 17.13%, with PetroChina Fuel Oil (Zhoushan, Shanghai and Guangzhou) taking 163,000 mt which occupied 8.40% of China’s exports and 49.05% of regional suppliers’ total.

Domestic-trade heavy bunker fuel demand decreases further

Domestic-trade bunker fuel demand decreased further in June, as bearish sentiment lingered.

Domestic-trade heavy bunker fuel demand dipped to 300,000 mt in the month, down by 10,000 mt or 3.23% from a month earlier. Shipowners showed low buying interest and there were not many newly-signed orders.

Conversely, domestic-trade light bunker fuel demand ascended to 135,000 mt in June, up by 5,000 mt or 3.85% month on month. The inland shipping market perked up slightly amid the hot weather, giving a modest boost to light bunker fuel demand.

Bunker Fuel Supply

China’s bonded bunker fuel imports retreat in May

China’s bonded bunker fuel imports retreated in May, as domestic supply increased and freight rates for imported cargoes stayed exorbitant.

The country imported about 352,000 mt of bonded bunker fuel in May, a cutback of 14.95% month on month and 0.62% year on year, JLC estimated, based on data from the General Administration of Customs of PRC (GACC).

Among all suppliers, Malaysia took the lion’s share by sending 129,500 mt of bonded bunker fuel to China, which accounted for 36.79% of the latter’s total imports. At the same time, Singapore ranked second with 128,900 mt, accounting for 36.62%, while South Korea slid to the third place with 68,300 mt, making up 19.40%. In addition, arrivals from Japan amounted to 25,300 mt, occupying 7.19%.

Chinese refiners raised their low-sulfur fuel oil (LSFO) production modestly in the month, leading to an increase in domestic supply of bonded bunker resources. The country produced about 1.15 million mt of LSFO in May, with the daily output at 36,968 mt, up by 3.84% from the previous month, JLC’s data indicates.

Distributors still gave priority to domestic low-sulfur bonded bunker resources, as imported bunker fuel lacked price advantages and import costs were lofty amid high freight rates. As a result, low-sulfur bonded bunker fuel imports dropped in the month.

However, imports of high-sulfur bunker fuel and marine gas oil were relatively stable, supported by fair demand.

In the first five months of this year, China imported approximately 1.40 million mt of bonded bunker fuel, plunging by 27.66% from the corresponding months in 2022, slowing down from a 33.73% slump in January-April, JLC estimated, based on data from the GACC. The drop was partly because of larger LSFO production. The country tallied a total of 6.01 million mt of LSFO output in this period, a modest rise of 0.72% year on year, JLC’s data shows.

Domestic-trade heavy bunker fuel supply tightens in June

Domestic-trade heavy bunker fuel supply tightened further in June, as blenders continued to cut their output amid steep costs. Chinese blenders supplied about 330,000 mt of heavy bunker fuel in the month, a fallback of 10,000 mt or 2.94% from a month earlier, JLC’s data shows.

On the contrary, domestic-trade MGO supply settled at 150,000 mt in the month, a hike of 10,000 mt or 7.14% from May. Refineries showed higher production enthusiasm in view of fair coking margins, contributing to an increase in the supply.

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: 14 July, 2023

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Bunker Fuel

Integr8 Fuels: Off spec issue with MGO equally likely to occur as with HSFO

In its Bunker Quality Trends Report Q3 2023, Integr8 highlighted that the industry is equally likely to face an off specification issue with MGO as with HSFO, with VLSFO being one third less likely.

Published

3 weeks ago

November 15, 2023

Admin

Integr8 Fuels, the bunker trading and brokerage arm of Navig8, on Tuesday (7 November) released its Bunker Quality Trends Report Q3 2023, analysing data from 120 million metric tons of supply, to reveal key trends relating to fuel quality and availability. An excerpt of the report is as follows:

Introduction: Challenges fueling change

As we come to the end of another year in the world of bunkers that seems to have passed with the blink of an eye, our minds shift towards the challenges on the horizon and how as an industry we need to embrace change to profit and succeed in the future.

This is the third Integr8 Fuels quality report covering the last six months of supplies globally where we again dissect and compare the likelihood of hidden losses and off specification issues across all commercial grades of bunkers and key ports.

Using ‘best in class’ available data from over 120 million metric tons (MT) of deliveries globally across 1,300 locations and from over 800 suppliers, we will also assess fuel quality trends using our own Integr8 Quality Index which scores the proximity (or otherwise) of individual parameters within each sample to the relevant table 1 or table 2 specification limits within ISO 8217.

Finally, given the context of the incoming changes we will consider some of the challenges that decarbonisation and verification of emissions will bring to the industry.

Part 1: Off specification frequencies

How likely are we to be faced with an off specification situation?

In the last 180 days, owners’ analysis available to Integr8 Fuels has highlighted that you are equally likely to have an off specification issue with marine gas oil (MGO) as with high sulphur fuel oil (HSFO) with very low sulphur fuel oil (VLSFO) being one third less likely (see figure 1).

What is the likelihood of receiving noncompliant or critically off spec bunkers?

It is always important to consider the context of the off specification incidents.

To do this it is essential to consider the likelihood of MARPOL Annex VI (sulphur) or SOLAS (flash point) infractions and the likelihood of critical off specification incidents such as cat fines, total sediment potential, used lubricating oils, sodium and ash content (high risk) against routine and easily rectifiable off specification issues classified “low risk” such as a high viscosity in HSFO.

The rule of thumb when comparing off specification incidents by grade is that the parameters targeted in any blending model are the most likely to be outside the specification.

For example, VLSFOs are targeted on sulphur, with the price difference for 50,000MT of fuel with a sulphur content of 0.49 compared to 0.45 possibly equating to hundreds of thousands of dollars. It’s hardly surprising, therefore, that both VLSFO and MGO, both of which are blended to a sulphur target, have more prevalence of MARPOL Annex VI non-compliances at 0.5% and 0.1% respectively.

However, MARPOL Annex VI is not the only compliance issue - we cannot ignore the requirement for flash point being 60°C or above as demanded by SOLAS. Indeed, off specification flash point, particularly with LSMGO, may be an unintended consequence of pulling low sulphur automotive or inland grades into the bunker pool as identified later in this paper.

High risk off specification incidents, defined as the total of both compliance and high risk off specifications, are seen to be most prevalent in MGO followed by VLSFO and, finally, HSFO. In fact, if you strip out compliance off specification, incidents relating to total sediment potential (TSP), aluminium and silicon (Al+Si) etc. for residual grades are very low indeed.

That said, there are many nuances, from region to region, to port-to-port, and even supplier-to-supplier at the same location. It therefore remains essential to consider these when buying bunkers and we will address some of the challenges later in the paper.

Availability of products (September 2023)

Unsurprisingly, marine gas oil is the most available product (640 ports) given the ability to substitute and supply higher quality inland or automotive grades and logistical ease of supplying what are quite often small quantities.

VLSFO is also seen to be readily available across all continents but at 28% fewer ports (458

ports), this because of larger quantities being ordered and the storage and barge infrastructure to support these supplies in general.

High sulphur fuel oil is the only product which is not readily available, with only 231 ports listed as of September 2023 (see figure 2). HSFO availability is centered around bunkering hubs and geographically key areas likely to receive passing trade from VLCCs and / or other scrubber fitted sectors. It is important, therefore, to plan carefully for HSFO and consider the type of scrubber fitted to the vessel along with any local limitations in forthcoming voyages that may require a fuel switch to LSMGO, for example.

Biofuel blends

Data is now becoming available for tests of identified biofuels supplied globally and whilst this is still very small in comparison with conventional fuels, it is clear to see the apparent void stretching from Singapore to Europe currently present.

Moreover, we are not currently able to comment on the sustainability of the biofuels being supplied but can confidently predict that Indonesia fuels, for example, will likely be sourced from palm oil and would not satisfy a verifier of emissions. ARA, and in particular Rotterdam, is seen to be the epicenter of supply in Europe given the current subsidies available in the Netherlands. VLSFO blends are almost exclusively limited to bunker hubs.

Which specifications are being traded?

Even as we eagerly anticipate the new version of ISO 8217 hopefully expected in early 2024, we continue to work in the past when it comes to the specifications we buy and sell on a day-to-day basis.

The scale of the challenge can be laid bare by considering the charts below, (figures 4 and 5), which identify the split of residual and distillate ISO 8217 grades traded by product group in the last 180 days.

Residual Fuels

Just over one quarter of trades are guaranteed to the latest version of the specification (2017) which is virtually unchanged compared to previous figures.

Distillate Fuels

In the case of MGO, only 18% of fuels traded were sold as 2017 fuels in the last 180 days, slightly less than previous. A very slight reduction in 2005 fuels was noted from 11% to 9%, however it is worth remembering that this specification is nearly 19 years old.

Note: The full report of Integr8 Fuels’ Bunker Quality Trends Report Q3 2023 can be found here.

Photo credit: Integr8 Fuels
Published: 15 November 2023

Bunker Fuel

JLC China Bunker Market Monthly Report (October 2023)

Country tallied roughly 1.63 million mt of bonded bunker fuel sales in the month, with the daily sales down by 5.74% from September to 52,419 mt, JLC’s data shows.

Published

4 weeks ago

November 10, 2023

Admin

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

Bunker Fuel Demand

China’s bonded bunker fuel sales decrease in October

China’s bonded bunker fuel sales decreased further in October, because of tighter supply.

The country tallied roughly 1.63 million mt of bonded bunker fuel sales in the month, with the daily sales down by 5.74% from September to 52,419 mt, JLC’s data shows.

The sales by Chimbusco, Sinopec Zhoushan and SinoBunker slid to 520,000 mt, 580,000 mt and 70,000 mt in the month respectively, while those by China ChangJiang Bunker (Sinopec) stabilized at 35,000 mt. At the same time, enterprises with regional bunkering licenses sold about 420,000 mt of bonded bunker fuel, up from 388,300 mt in September.

China’s bonded bunker fuel sales continued to drop, as low-sulfur fuel oil supply tightened and prices stayed relatively high. Meanwhile, the barging capacity at certain ports was affected by bad weather, which also depressed the sales.

China’s bonded bunker fuel exports inch down in Jan-Sept

China’s bonded bunker fuel exports edged down in the first nine months of this year, mainly because of a decline in domestic low-sulfur fuel oil (LSFO) output.

The country exported about a total of 15.24 million mt of bonded bunker fuel in January-September, a dip of 0.66% from the same months in 2022, JLC estimated, with reference to data from the General Administration of Customs of PRC (GACC).

Among the exports were 14.44 million mt of heavy bunker fuel and 802,600 mt of light bunker fuel, which accounted for 94.73% and 5.27% of the total, respectively.

Regarding the exports by supplier, enterprises with national bunkering licenses exported about 12.15 million mt of bonded bunker fuel in the nine months, accounting for 79.69%, while those with regional bunkering licenses supplied about 3.10 million mt, accounting for 20.31%.

Chinese refiners reduced their bonded bunker fuel exports in the first three quarters of this year, as domestic supply decreased amid falling LSFO production. Refineries lowered their LSFO output in the period when their production enthusiasm was greatly depressed by less considerable margins. The country produced about 11.10 million mt of LSFO in January-September, a cut of 5.45% year on year, JLC’s data shows.

In September alone, China’s bonded bunker fuel exports settled at 1.58 million mt, down by 2.79% from the previous month and 21.13% from a year earlier. Heavy bunker fuel exports amounted to 1.47 million mt, accounting for 92.73% of the total, while light bunker fuel exports stood at 115,200 mt, occupying 7.27%.

Suppliers with national bunkering licenses tallied approximately 1.18 million mt in the month, accounting for 74.23% of the country’s total, with Sinopec Fuel Oil and Chimbusco taking 64.35%. At the same time, enterprises with regional licenses exported about 408,300 mt, accounting for 25.77%.

JLC China Bunker Market Monthly Report (October 2023)

Domestic-trade bunker fuel demand extends gains in October

Domestic-trade bunker fuel demand extended gains in October, because of post-holiday restocking.

Domestic-trade heavy bunker fuel demand settled at 400,000 mt in the month, rising by 40,000 mt or 12.12% month on month, JLC’s data shows. Some shipowners increased purchases after the holiday for the National Day, as they had run out of stockpiles. Meanwhile, high-sulfur fuel oil prices fell to a relatively low level, which also attracted buyers to make deals.

Domestic-trade light bunker fuel demand surged to 165,000 mt in October, growing by 25,000 mt or 19.23% from a month earlier, the data indicates. Downstream buyers showed higher buying interest when MGO prices rolled back. At the same time, shipping demand at inland ports increased, with coal transportation speeding up amid the heating season in North China.

Bunker Fuel Supply

China boosts its September bonded bunker fuel imports

China boosted its bonded bunker fuel imports month on month in September, as domestic low-sulfur fuel oil (LSFO) output decreased rapidly.

The country tallied about 389,800 mt of bonded bunker fuel imports in the month, surging by 27.18% month on month, JLC estimated, with reference to data from the General Administration of Customs of PRC (GACC).

Domestic refineries slowed down their LSFO production amid bad margins, leading refiners to import more bonded low-sulfur bunker fuel to meet demand. The country produced about 1.17 million mt of LSFO in the month, with the daily output dropping by 5.40% month on month to 39,000 mt, JLC’s data indicates. Meanwhile, some distributors expanded their bonded low-sulfur bunker fuel imports as more unit maintenance and export quota tightness triggered fears of a further decline in LSFO output in the fourth quarter.

Imports of high-sulfur bunker fuel and marine gas oil (MGO) largely stabilized at a normal level.

Russia surpassed Malaysia and became the largest supplier by shipping 214,000 mt of bonded bunker fuel to China, accounting for 54.9% of China’s total imports. Malaysia slipped to the second place with 61,800 mt, accounting for 15.9%, while Singapore ranked third with 60,900 mt, occupying 15.6%. Shipments from South Korea were reduced to only 53,100 mt, accounting for 13.6% and bringing the country to the fourth place.

On a year-on-year comparison, however, China’s bonded bunker fuel imports fell by 8.90%.

China’s bonded bunker fuel imports totaled 2.88 million mt in the first nine months of this year, plunging by 19.18% from the corresponding months in 2022, decelerating from a 20.58% slump in January-August.

Domestic-trade bunker fuel supply continues to grow in October

Domestic-trade bunker fuel supply continued to grow in October, as blenders boosted production when their blending margins for bunker fuel were widened by a drop in blendstock prices.

Chinese blenders supplied about 450,000 mt of domestic-trade heavy bunker fuel in the month, a boost of 60,000 mt or 16.22% month on month, JLC’s data indicates.

Similarly, refineries ramped up their light bunker fuel production amid relatively fair margins. Domestic-trade marine gas oil (MGO) supply rose to 180,000 mt in October, an uplift of 20,000 mt or 11.76% from September.

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: 10 November, 2023

Analysis

DNV: Methanol-fuelled order trend continues, with first ammonia DF newbuilding contracts recorded in Oct

‘Finally, we have order confirmation on the first ocean going vessels with ammonia propulsion,’ exclaimed Martin Wold, Principal Consultant in DNV’s Maritime Advisory business.

Published

1 month ago

November 6, 2023

Admin

Latest figures from DNV’s Alternative Fuels Insight (AFI) platform in October saw six LNG-powered vessels added to the database. Additionally, the trend of increased orders for methanol-powered vessels continues, with 14 methanol-fuelled vessels ordered.

October also saw the first confirmed order for two ocean-going vessels equipped with ammonia dual fuel systems.

Following in the footsteps of the first orders that were made for LNG, methanol, and LPG powered vessels, the initial orders for ammonia-fuelled vessels are for ships designed to also transport the same fuel as cargo.

“Finally, we have order confirmation on the first ocean going vessels with ammonia propulsion. This simplifies the chicken and egg dilemma related to fuel availability versus demand,” exclaimed Martin Wold, Principal Consultant in DNV's Maritime Advisory business.

“It also addresses crew training, as crew will already be trained specifically on gas and ammonia carriers, so this does not become an extra burden or risk to manage.

“Furthermore, we see that the drivers for alternative fuels in general, and the push for ammonia as a fuel in particular, compared to what was the case in the early days for LNG and methanol respectively, are much stronger at this stage of the industry development.

“So, we will see orders for other ship types even before we get operational experience from gas carriers using ammonia as a fuel.”