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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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Yvette Luo
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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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Biofuel

PIL vessel in bio bunker fuel trial transports containers with PSA Singapore

Containers, bound for Mitsui Chemicals Asia Pacific’s beneficial cargo owner, were transported via PIL’s vessel “Kota Ratna” and PSA’s coastal terminal and rail nodes in Singapore, Qinzhou and Chongqing.

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PIL transports containers using bio bunker fuel in trial with PSA Singapore

PSA Singapore (PSA) and Pacific International Lines (PIL) on Wednesday (29 May) announced the completion of their first trial of low-carbon green shipments, in a joint effort to build a more sustainable end-to-end supply chain ecosystem.

This pilot trial is part of the Memorandum of Understanding signed in October last year between the two long-standing partners to collaborate on green and sustainability solutions to decarbonise supply chains. 

The pilot consists of warehouse-to-warehouse cargo flow from Singapore to Chongqing via the International Land-Sea Trade Corridor. The containers, bound for Mitsui Chemicals Asia Pacific, Ltd’s beneficial cargo owner, were transported via PIL’s vessel Kota Ratna and PSA’s coastal terminal and rail nodes in Singapore, Qinzhou and Chongqing.

Green levers utilised in this pilot include the use of biofuel on Kota Ratna as well as landside supply chain optimisation by PSA.

The biofuel used for this trial, a blend of 24% used cooking oil with very low sulphur fuel oil, abated about 100 tonnes of carbon, equivalent to planting 4000 trees, and reduced the emissions of greenhouse gases (GHG) by 84.1%.

With first-hand data on carbon emissions obtained from this pilot trial, PIL will be better equipped to assess how it can further lower emissions from its vessel operations, not just for its existing ships but also for its eight new LNG dual-fuel container vessels that will be progressively delivered from end 2024.

The PSA Port Ecosystem Business Division leveraged container barging, a greener mode of transportation as compared to trucking, to haul cargo from PSA Jurong Island Terminal to Pasir Panjang Terminal for onward shipment towards Chongqing. 

In addition, the use of container handling equipment powered by electricity and greener alternative fuels at PSA’s ports reduced emissions in the port area.

The collaborative efforts by both partners across the end-to-end supply chain translated to planting one tree for every laden container moved across this value chain.

Philbert Chua, Managing Director, Container Division, PSA Corporation Ltd, said, “The successful completion of this green pilot project with PIL is an important step forward for the maritime and supply chain sector.”

“Combating climate change is one of our urgent priorities and PSA is committed to work with like-minded partners to put these words into action.”

“This concerted teamwork illustrates a step-by-step measurable approach to further decarbonise supply chains and has unlocked opportunities for accelerated action to achieve our net zero goal.”

Abhishek Chawla, Chief Marine Officer, PIL, said, “PIL is pleased to receive promising results from this low-carbon green shipments pilot trial with PSA.”

“With sustainability at the core of PIL’s operations, we are happy to join forces with PSA as we take concrete action to drive a sustainable future. The valuable insights obtained from this trial will empower PIL to further reduce our vessel emissions in the future, as part of our goal of achieving net zero by 2050.”

“Working hand in hand with like-minded partners, we can augment each other’s sustainability efforts in creating greener shipping and providing a sustainable net zero model to our customers soon.”

 

Photo credit: PSA Singapore
Published: 30 May 2024

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Alternative Fuels

China: Chimbusco, Suzhou Fengbei Biotechnology to conduct bio bunker fuel research

Both parties will comprehensively promote the use of biodiesel in the bunker fuel market and contribute to green and low-carbon shipping.

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China: Chimbusco, Suzhou Fengbei Biotechnology to conduct bio bunker fuel research

China Marine Bunker (Petro China) Co., Ltd. (Chimbusco) and Suzhou Fengbei Biotechnology Co., Ltd. on Thursday (23 May) signed a strategic cooperation agreement to jointly carry out research on the application of marine biofuels and promote pilot projects on the application of biodiesel. 

Both parties will comprehensively promote the use of biodiesel in the bunker fuel market and contribute to green and low-carbon shipping.

Suzhou Fengbei Biotechnology Co., Ltd. has long been committed to the research and development of comprehensive utilisation of natural oil resources, forming an oil resource recycling industry chain of "industrial oils-biofuels (biodiesel)-biobased materials". 

Qin Ling, secretary of the Party Committee and general manager of Chimbusco said with the implementation of increasingly stringent emissions laws and regulations, the company is actively responding to and adapting to domestic development needs. 

“Through strategic cooperation, the company is locking in the future demand for biofuels,” he said. 

Pingyuan, chairman of Suzhou Fengbei Biotechnology Co., Ltd. said that both firms will rely on their respective advantages and resources and seize new opportunities for carbon reduction in shipping. 

Disclaimer: The above article published by Manifold Times was sourced from China’s domestic market through a local correspondent. While considerable efforts have been taken to verify its accuracy through a professional translator and processed from sources believed to be reliable, no warranty is made regarding the accuracy, completeness and reliability of any information.

 

Photo credit: Zhangjiagang Bonded Zone (Jingang sub-district) Party and Government Office
Published: 30 May 2024

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Wind-assisted

MOL to install wind propulsion system on seven newbuildings

MOL has measured the performance of the Wind Challenger on a vessel “Shofu Maru” continuously on actual voyages and confirmed Wind Challenger sail reduced daily fuel consumption by up to 17%.

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MOL to install wind propulsion system on seven newbuildings

Mitsui O.S.K. Lines, Ltd. (MOL) and its group company MOL Drybulk Ltd. on Monday (27 May) announced their intent to install wind propulsion systems on a total of seven newbuilding bulk carriers and multi-purpose vessels, which will be operated by MOL Drybulk. 

MOL has measured the performance of the Wind Challenger on a vessel Shofu Maru continuously on actual voyages and confirmed that the Wind Challenger sail reduced daily fuel consumption by up to 17%.

The fuel saving and GHG reduction effect of the Wind Challenger depends on various conditions such as the type of vessel and the shipping route.

MOL Group will have a total of nine Wind Challenger-equipped vessels, bringing the total number of vessels equipped with wind propulsion systems to 11.

Among the seven vessels to be equipped with wind propulsion systems, six new bulk carriers will each be equipped with one Wind Challenger. Construction contracts have already been signed with Oshima Shipbuilding Co., Ltd. for three of the six vessels, and preparations are under way for construction contracts for the remaining three vessels.

In addition, MOL Drybulk has decided to install two Ventfoils, a foldable and autonomous unit for wind-assisted ship propulsion, manufactured by Dutch firm EconoWind B.V., on one of its new multipurpose vessels slated for delivery 2025 and operation under a time charter.

MOL has established the "MOL Group Environmental Vision 2.2" and has set the target of achieving net zero greenhouse gas (GHG) emissions by 2050. One of the key strategies to achieve this target includes the "introduction of clean energy, further energy-saving technologies," and the group plans to launch 25 vessels equipped with the Wind Challenger by 2030 and 80 vessels by 2035.

 

Photo credit: Mitsui O.S.K. Lines
Published: 30 May 2024

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