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JLC China Bunker Market Monthly Report (March 2023)

China’s bonded bunker fuel sales rebounded in March, as more foreign ships refueled at Chinese ports where LSFO prices were competitive.

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

Bunker Fuel Demand

China’s bonded bunker fuel sales rebound in March

China’s bonded bunker fuel sales rebounded in March, as more foreign ships refueled at Chinese ports where low-sulfur fuel oil (LSFO) prices were competitive.

The country tallied about 1.59 million mt of bonded bunker fuel sales in March, a rally of 130,000 mt or 8.18%from February, JLC’s data shows. Specifically, the sales by Chimbusco and SinoBunker climbed to 610,000mt and 70,000 mt, up from 550,000 mt and 60,000 mt in the previous month respectively, while those by Sinopec Zhoushan slipped to 530,000 mt, down from 550,000 mt. At the same time, China ChangJiangBunker (Sinopec) sold about 40,000 mt of bonded bunker fuel, unchanged month on month. In addition, suppliers with regional licenses sold 340,000 mt, versus 260,000 mt in February.

LSFO prices at Chinese ports, especially those in Zhoushan and Shanghai, dropped in the month, attracting more shipowners to refuel. However, the supply of bonded bunker resources was still relatively tight in South China, limiting the rise in China’s total sales.

China’s bonded bunker fuel exports plunge 23.64% in Jan-Feb

China’s bonded bunker fuel exports plunged by 23.64% year on year in January-February 2023, due to multiple downsides.

The country exported about 2.93 million mt of bonded bunker fuel in the two months, down from3.84 million mt in the corresponding months in 2022, JLC estimated, with reference to data from the General Administration of Customs of PRC (GACC).

Heavy bunker fuel exports were 2.79 million mt in the first two months of this year, accounting for 95.18%of the total.At the same time, marine oil gas (MGO) exports were 141,500 mt, making up 4.82%.

Enterprises with national and regional bunkering licenses exported about 2.41 million mt and 526,600 mt in the two months, occupying 82.05% and 17.95% respectively. Sinopec Fuel Oil and Chimbusco were still the main suppliers in this period.

In January alone, China’s bonded bunker fuel exports were roughly 1.32 million mt, a dramatic slump of 46.38% year on year. Global shipping demand was seasonally weak in January, and foreign shipowners were wary about purchases. Meanwhile, the supply of bonded resources tightened in northern regions, which also hit the exports. In addition, some bunkering business at Chinese ports was halted during the Chinese New Year holiday, and China’s customs clearing procedure for export was also affected by the holiday.

However, the exports rebounded in February when global shipping demand grew modestly. Meanwhile, the operation of China’s customs returned to normal after the holiday. China’s bonded bunker fuel exports stood at about 1.61 million mt in February, up by 22.08% from a month earlier and 17.04% from a year earlier.

On the flip side, China’s low-sulfur fuel oil (LSFO) output climbed in January-February as domestic demand rallied. China’s LSFO output settled at 2.46 million mt in the two months, an increase of 7.40%year on year, JLC’s data shows.

China may boost its bonded bunker fuel exports in March as the country’s foreign trade may improve on preferential policies, but the exports are unlikely to grow much because the recovery of the global economy and shipping demand is still slow.

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Domestic bunker fuel demand grows slower in March

Domestic-trade bunker fuel demand saw slower growth in March when shipowners were more cautious about purchases. Domestic-trade bunker fuel demand settled at 360,000 mt in the month, a gain of 20,000 mt or 5.88%monthon month, decelerating from a rise of 8.82% in February. Trade cooled down with shipping demand still slow to recover.

In the meantime, domestic demand for light bunker fuel climbed to 135,000 mt, up by 5,000 mt or 3.85%, slowing down from a jump of 18.18% in February. Domestic-trade light bunker fuel consumption increased slightly when marine gas oil prices slipped, but the increase was much slower than a month earlier due to deeper wait-and-see sentiment.

Bunker Fuel Supply

China’s bonded bunker imports hit new low in Jan-Feb 2023

China’s bonded bunker fuel imports plummeted to a new low in the first two months of 2023, largely due to relatively high freight rates and ample supply of domestic low-sulfur fuel oil (LSFO).

The country imported approximately 456,900 mt of bonded bunker fuel in January and February 2023, a plunge of 48.01% from the same period in 2022, JLC estimates, based on data from the General Administration of Customs of PRC (GACC).

Most distributors favored domestically-produced low-sulfur bonded bunker fuel over imported fuel as international freight rates remained high, and domestic supply was more stable and less expensive, industry sources said.

Some distributors with regional licenses to supply bonded bunker may choose to suspend bunkering business if they failed to secure domestic LSFO supplies, according to industry sources.

In China’s bonded bunker market, only high-sulfur fuel oil (HSFO) and marine gasoil (MGO) still rely on imports, while LSFO is rarely seen coming from overseas at present.

Noticeably, HSFO and MGO only account for a small percentage of market share in China’s bonded bunkering business, which may explain why imports were so low in January and February this year.

Malaysia was the top supplier of bonded bunker during the two-month period, exporting 306,400 mt to China, accounting for 67% of the latter’s total imports, followed by South Korea, which exported 109,500 mt with an import share of 24%. Japan and Singapore ranked third and fourth with 39,500 mt and 1,500 mt, accounting for 8.7% and 0.3% respectively.

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Domestic heavy bunker fuel supply increases in March

Domestic-trade heavy bunker fuel supply continued to increase in March. Chinese blenders supplied about 375,000 mt of heavy bunker fuel in the month, an uptick of 15,000 mt or 4.17% from a month earlier, JLC’s data shows.

In contrast, the supply of marine gas oil (MGO) shrank to 140,000 mt in the month, a mild dip of 5,000 mt or 3.45% month on month, the data indicates.

Some blenders were wary about bunker fuel blending when downstream demand was relatively weak. As aresult, they just based their supply on actual orders.

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Bunker Prices, Profits

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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 (February 2023)
Related: JLC China Bunker Market Monthly Report (January 2023)
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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: 17 May, 2023

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Shipping Corridor

Singapore, LA and Long Beach unveil Partnership Strategy for Pacific Ocean green and digital shipping corridor

Ports and C40 have commissioned a study to analyse trade flows and vessel traffic between the three locations as well as estimate quantity of near-zero/zero-emission bunker fuels required for this traffic.

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Singapore, LA and Long Beach unveils Partnership Strategy for Pacific Ocean green and digital shipping corridor

The Maritime and Port Authority of Singapore (MPA), Port of Los Angeles (POLA) and Port of Long Beach (POLB) on Wednesday (6 December) unveiled a Partnership Strategy for a green and digital shipping corridor (GDSC) across the Pacific Ocean at the 28th United Nations Climate Change Conference.

The release of the Partnership Strategy follows the signing of a memorandum of understanding (MoU) by MPA, POLA and POLB during Singapore Maritime Week in April 2023. The MoU formalised the partnership, which is supported by C40 Cities, with the aim of establishing a GDSC connecting the three global hub ports.

The scope of cooperation through the Partnership Strategy and success indicators specified within build upon the MoU signed in April 2023 and reaffirm the corridor partners’ commitment to drive global action to digitalise and decarbonise the shipping industry and improve efficiencies.

The GDSC Strategy outlines steps to accelerate decarbonisation of the maritime shipping industry by enabling first mover organisations to achieve net-zero greenhouse gas emissions by the earliest feasible date, in support of the goals defined by the 2023 International Maritime Organization’s Strategy on Reduction of GHG Emissions from Ships. The ports and C40 will work together and with value-chain stakeholders from the fuel and maritime sectors to:

● Coordinate decarbonisation efforts: GDSC partners will help to catalyse and coordinate efforts to enable ships calling at the Port of Singapore, Port of Los Angeles and Port of Long Beach to achieve net-zero greenhouse gas emissions by the earliest feasible date. 

● Build consensus on green shipping best practices: GDSC partners will seek to establish consensus around green shipping best practices and standards.

● Improve access to and adoption of technology and digital solutions: To enhance supply chain efficiency, resilience and decarbonisation while reducing costs and improving reliability, GDSC partners will work to develop and deploy innovative technology and digital solutions.

● Leverage networks: GDSC partners will work with stakeholders involved in other green shipping initiatives, including those established by the three ports and other parties, to scale the uptake of zero and near-zero emission technologies, fuels and energy sources.

To achieve these aims, a partnership structure and governance mechanism have been developed to provide clarity on the roles and responsibilities of GDSC partners. The strategy also outlines processes for onboarding new participants, financial management, confidentiality and decision-making.

As next steps, the ports and C40 have commissioned a study to analyse trade flows and vessel traffic between Singapore, Los Angeles and Long Beach. The study will estimate the quantity of near-zero and zero-emission fuels required for this traffic, and guide implementation by identifying opportunities for collaboration to advance the development of the GDSC.

The founding partners will now engage stakeholders from across the shipping and fuel supply value chains that share the GDSC's vision and aims, with the intention of onboarding new corridor participants in 2024. 

Mr Teo Eng Dih, Chief Executive of MPA, said: “We are excited to see this partnership grow from strength to strength with the Green and Digital Shipping Corridor Partnership Strategy. We have embarked on evaluating the various digital solutions and zero and near-zero fuels options that could be trialled along the route between Singapore and the San Pedro Bay Port Complex. We look forward to the support of all the corridor stakeholders over the coming months to conduct trials and potentially scale them for wider adoption.”

"This Partnership Strategy document is the foundation upon which we'll build the future of maritime shipping,” Port of Los Angeles Executive Director Gene Seroka said. “Our success requires the resolve and dedication of the three partnering ports as well as our industry partners. Together, we will model the collaboration necessary to achieve our climate and efficiency goals." 

“Over the last two decades, we've learned that collaboration between maritime industry partners is the key to making meaningful progress in reducing emissions and cleaning the air,”Port of Long Beach CEO Mario Cordero said. “This trans-Pacific green shipping corridor takes this concept global. The strategies we develop here can be used as a roadmap by a larger network of seaports and supply chain companies to invest in programs, technologies, software and infrastructure to decarbonize international trade everywhere.”

C40 Executive Director Mark Watts, said: "C40 is proud to support our port partners in delivering this Partnership Strategy. The advancement of this Green and Digital Shipping Corridor brings the shipping sector one step closer to a 1.5°C-aligned trajectory. Green shipping is only achievable through collaboration because no one stakeholder can afford to move unless they know others are likely to follow. That’s where C40 is delighted to help, bringing our network of world-leading cities, which include most of the world’s largest and most forward-looking ports."

Note: The Partnership Strategy document can be viewed here

Photo credit: Maritime and Port Authority of Singapore
Published: 7 December, 2023

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Business

Liberia-flagged bulker “Eleen Armonia” placed under Sheriff’s arrest

Ship was added to list of vessels under Sheriff’s arrest in Singapore’s court system and it is currently held at Eastern Bunkering Anchorage; arrest was made on behalf of Allen & Gledhill LLP.

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RESIZED SG bunker tanker

Liberia-flagged bulk carrier Eleen Armonia was arrested in Singapore waters on Monday (4 December). 

The 55,522 DWT vessel was added to the list of vessels under Sheriff’s arrest in Singapore’s court system. 

According to the list, the vessel was arrested at 12.25pm and the arresting solicitor listed was law firm Allen & Gledhill LLP. The ship is currently held at the Eastern Bunkering Anchorage. 

No details regarding the reason behind the arrest were provided in the list. 

Photo credit: Manifold Times
Published: 7 December, 2023

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Biofuel

PIL and DP World embark on biofuel bunkering trials at Jebel Ali Port

Both parties will collaborate on trial shipments between Jebel Ali Port in Dubai and destinations within PIL’s network in near term which will include shipments on PIL’s vessels powered by a biofuel blend.

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PIL and DP World embark on biofuel bunkering trials at Jebel Ali Port

Singapore-based container operator Pacific International Lines (PIL) on Wednesday (6 December) said it signed a Memorandum of Understanding (MOU) with DP World, which handles around 10% of the world’s container trade, to jointly develop green solutions to decarbonise global supply chains.

In the near term, both parties will collaborate on trial shipments between Jebel Ali Port in Dubai and destinations within PIL’s network, with initiatives to reduce the shipments’ GHG footprint. This will include shipments on PIL’s vessels powered by a biofuel blend, biofuel bunkering, and deploying container handling equipment at terminals that run on renewable energy to handle the shipments.

Over the longer term, the companies will explore expanding this partnership to include other ports within DP World’s global network, and using other alternative bunker fuels, such as e-LNG, green methanol or green ammonia in PIL’s vessel operations and bunkering.

It was signed by Mr Lars Kastrup, Chief Executive Officer, PIL and Mr Tiemen Meester, Group Chief Operating Officer, Ports & Terminals, DP World, at the UN Climate Change Conference (COP28) in Dubai, United Arab Emirates (UAE), conveying their commitment to combating climate change and the collective goal of achieving net zero greenhouse gas (GHG) emissions by 2050 or earlier.

Mr Lars Kastrup, Chief Executive Officer, PIL said: “Supply chain resilience and sustainability is the bedrock of global trade growth. With the renewed commitment by the International Maritime Organisation (IMO) this year to take a significant step forward to decarbonise the shipping industry, we at PIL are responding actively to IMO’s call and working to invest in and implement green solutions to achieve our target of achieving net zero by 2050. In this regard, we are pleased to have DP World joining us on our sustainability journey. Capitalising on the combined strengths of our two organisations, we can both augment our sustainability efforts as we co-develop solutions to decarbonise our supply chains.”

Mr Tiemen Meester, Group Chief Operating Officer, Ports & Terminals, DP World, said: “Decarbonisation is the single biggest concern for DP World outside the constraints and the physical movement of goods. So, we are transforming our business and the impact global trade has on the climate. We have already committed to becoming carbon-neutral by 2040 and achieving net-zero carbon emissions by 2050. But we must explore partnerships with companies that share our ambitions and technology to be deployed right now for quicker results.”

Photo credit: DP World
Published: 7 December, 2023

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