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JLC China Bunker Market Monthly Report (October 2022)

China’s bonded bunker fuel sales maintained downtrend in October, as overall demand in bonded bunker fuel market slackened further due to epidemic.

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Beijing-based commodity market information provider JLC Network Technology Co. recently shared its JLC China Bunker monthly report for October 2022 with Manifold Times through an exclusive arrangement:

Bunker Fuel Demand

China’s bonded bunker fuel sales still drop in Oct

China’s bonded bunker fuel sales maintained a downtrend in October, as overall demand in the bonded bunker fuel market slackened further due to the continued negative impact of the epidemic.At the same time, some Chinese ports lost their price advantage compared with neighboring ones, as their bonded bunker fuel prices were high amid slightly tight supply.

The country recorded about 1.59 million mt of bonded bunker fuel sales in October 2022, a drop of 4.22%from a month earlier, JLC’s data shows.

Specifically, the sales by Chimbusco and Sinopec Zhoushan slid to 560,000 mt and 650,000 mt, while those by SinoBunker and China ChangJiang Bunker (Sinopec) climbed to 70,000 mt and 50,000 mt respectively. Suppliers with local licenses sold 260,000 mt of bonded bunker fuel in the month.

China’s September bonded bunker fuel exports slipped on month as export margins were not so good, but the exports were still relatively high.

The country tallied about 2.01 million mt of bonded bunker fuel exports in September, slightly down by 0.95%from the previous month, according to the data from General Administration of Customs of PRC (GACC). The dip was mainly attributed to a further monthly decline in LSFO production. Chinese refiners were less keen to produce LSFO in the month, as China had released a large quota on oil product exports and diesel export margins appeared to be more considerable compared with LSFO. The country’s LSFO output (of Chinese refiners with export quotas) totaled about 1.24 million mt in September, down by 8.01%month on month, JLC’s data shows.

Among the exports were about 1.90 million mt of heavy bunker fuel and 111,600 mt of light marine gas oil (MGO), accounting for 94.44% and 5.56% of the total respectively. The bonded bunker fuel exports by state-owned enterprises were around 1.68 million mt in the month, occupying 83.8%, while those by local independent enterprises climbed to 325,500 mt, making up 16.2%.

On a year-on-year comparison, however, the exports skyrocketed by 29.89%, GACC data shows. Underlying the jump was much larger output of LSFO and the release of this year’s fourth and fifth batches of quota on LSFO exports in September.

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Domestic bunker fuel demand shrinks in October

Domestic-trade heavy bunker fuel demand shrank in October, a traditionally strong month, mainly because of a new wave of epidemic outbreaks across China.

The demand for heavy bunker fuel settled at 390,000 mt in the month, a decline of 30,000 mt or 7.14%fromSeptember, JLC’s data indicates. Downstream buyers showed resistance to relatively high bunker fuel prices when the negative effects of the epidemic persisted.

Light bunker fuel demand contracted in October as well, as prices of marine gas oil (MGO) remained relatively lofty and buyers still based purchases on rigid demand to avoid the risk of prices falling back. Demand for light bunker fuel slipped to 145,000 mt in the month, down by 5,000 mt or 3.33% month on month, JLC’s data shows.

Bunker Fuel Supply

China expands bonded bunker fuel imports in September

China boosted its bonded bunker fuel imports in September, as the supply of bonded resources tightened with domestic low-sulfur fuel oil (LSFO) production falling.

The country imported about 427,900 mt of bonded bunker fuel in September 2022, a significant rally of 27.77% month on month, according to data from the General Administration of Customs of PRC (GACC).

Chinese refiners cut LSFO production in the month because it became less profitable for them to produce or export LSFO. The country’s LSFO output (of Chinese refiners with export quotas) totaled about 1.24 million mt in September, down by 8.01% month on month, JLC’s data shows. Although imported low-sulfur resources still lacked price advantages, market participants expanded their imports given the decline in the supply of homemade resources.

The UAE still topped all suppliers by exporting 278,000 mt of bonded bunker fuel to China in the month, accounting for 65% of China’s total bonded bunker fuel imports. The imports from Singapore and SouthKorea amounted to 79,500 mt and 61,400 mt, occupying 19% and 14% of the total respectively. Malaysia dropped to the fourth position, with imports from the country making up 2%.

On a year-on-year comparison, the imports slumped by 25.94% in September, mainly as a result of a yearly surge in domestic LSFO output.

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Domestic blended bunker fuel supply tightens in October

Chinese blenders supplied a total of 420,000 mt of heavy bunker fuel in October, a fallback of 40,000 mt or 9.52% from the previous month, JLC’s data indicates.

Domestic blended heavy bunker fuel supply continued to tighten in the month, which was mainly attributed to a decline in blendstock supply. The supply of the major blendstocks including low-sulfur asphalt, coal-based diesel and light coal tar decreased due to tighter virus-related restrictions. In addition, blenders reduced their bunker fuel supply as cargo delivery was not so smooth during the 20th National Congress of the Communist Party of China, which also contributed to the drop in domestic blended bunker fuel supply.

Coking margins remained fair but resources flowing into the bunker field were limited as refiners still gave priority to diesel of which prices stayed steep. The supply of domestic marine gas oil (MGO) slipped to 170,000 mt in October, down by 10,000 mt or 5.56% from September, the data shows.

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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 (September 2022)

Related: JLC China Bunker Market Monthly Report (August 2022)

Related: JLC China Bunker Market Monthly Report (July 2022)

Related: JLC China Bunker Market Monthly Report (June 2022)

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: 11 November, 2022

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Methanol

Kambara Kisen orders methanol dual-fuel bulker from Tsuneishi Shipbuilding

Firm ordered a 65,700-dwt methanol dual-fuel dry bulk carrier with Tsuneishi Shipbuilding; MOL signed a basic agreement on time charter for the newbuilding that is slated to be delivered in 2027.

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Kambara Kisen orders methanol dual-fuel bulker from Tsuneishi Shipbuilding

Japanese shipowner Kambara Kisen has ordered a 65,700-dwt methanol dual-fuel dry bulk carrier newbuilding from Tsuneishi Shipbuilding Co., Ltd, according to Mitsui O.S.K. Lines (MOL) on Wednesday (20 September).

MOL said it signed a basic agreement on time charter for the newbuilding that is slated to be delivered in 2027. 

The vessel will be designed to use e-methanol produced primarily by synthesising recovered CO2 and hydrogen produced using renewable energy sources, and bio-methanol derived from biogas. 

The vessel's design maximises cargo space while ensuring sufficient methanol tank capacity set to allow the required navigational distance assuming various routes, at the same time maximising cargo space. 

MOL added the vessel is expected to serve mainly in the transport of biomass fuels from the east coast of North America to Europe and the U.K. and within the Pacific region, as well as grain from the east coast of South America and the U.S. Gulf Coast to Europe and the Far East.

Details on the time-charter contract:

Shipowner: Kambara Kisen wholly owned subsidiary
Charterer: MOL Drybulk Ltd.
Charter period 2027: -

Details on the newbuilding methanol dual fuel bulk carrier:

LOA: About 200 m
Breadth: About 32.25 m
Draft: About 13.80 m
Deadweight: About 65,700 MT
Hold capacity: About 81,500m3
Shipyard: Tsuneishi Shipbuilding Co., Ltd.

Photo credit: Mitsui O.S.K. Lines
Published: 22 September, 2023

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Methanol

Argus Media: Alternatives may drive methanol market growth

Driven by low-carbon policies and regulations, the transportation sector — especially the marine fuels industry — could be a source of heightened demand, according to Argus.

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RESIZED Argus media

The growth of sustainable alternatives to traditional methanol production sources likely will shape the market over the next several years, industry leaders said this week at the Argus Methanol Forum.

20 September 

Driven by low-carbon policies and regulations, the transportation sector — especially the marine fuels industry — could be a source of heightened demand.

"The aim is to be net zero by 2050 but [those solutions are] expensive today and one of the main challenges to build e-methanol or bio-methanol plants is a huge queue for these pieces of equipment that aren't available," Anita Gajadhar, executive director for Swiss-based methanol producer Proman, said.

Bio-based and e-methanol plants of commercial scale, like Proman's natural gas-fed 1.9 million metric tonne/yr M5000 plant in Trinidad and Tobago, are not ready today.

"But that's not to say 10 years from now they won't be there," Gajadhar added.

Smaller projects are popping up. Dutch fuels and gas supplier OCI Global announced plans last week to double the green methanol capacity at its Beaumont, Texas, facility to 400,000 t/yr and will add e-methanol to production for the first time. Production will use feedstocks such as renewable natural gas (RNG), green hydrogen and biogas.

The globally oversupplied methanol market will not get any major supply additions starting in 2024 until 2027. But that oversupply will not last long, Gajadhar said.

Global demand has slowed this year, driven by stagnate economic growth and higher interest rates, according to industry observers.

As much as half of methanol demand is tied to GDP growth, with total methanol demand estimates at 88.9mn t globally in 2023. This is essentially flat from 2022, but up from 88.3m t in 2021 and 87.7mn t in 2020, Dave McCaskill, vice-president of methanol and derivatives for Argus Media's consulting service, said.

Demand is not expected to rebound to 2019 levels of 89.6mn t until 2024 or 2025, he added.

The period of oversupply combined with lackluster demand places methanol in a transition period, Gajadhar said, which opens the door for sustainable feedstock alternatives to shape market growth.

Danish container shipping giant Maersk and French marine logistics company CMA-CGM announced earlier this week a partnership to drive decarbonization in shipping. The partnership seeks to develop fuel and operations standards for bunkering with alternative fuels. The companies will develop net-zero solutions, including new technology and alternative fuels.

Maersk has previously ordered dual-fuel methanol-powered vessels and CMA-CGM LNG-propelled vessels.

The demand for alternative feedstock-derived fuels is there, but the ability to scale-up such production lags. Certified lower-carbon methanol produced using carbon capture and sequestration — also known as blue methanol— can ramp up much more quickly, according to Gajadhar.

By Steven McGinn

Photo credit and source: Argus Media
Published: 22 September, 2023

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Biofuel

Royal Caribbean completes over 12 weeks of bio bunker fuel testing in Europe

Firm expanded its biofuel testing this summer in Europe to two additional ships — Royal Caribbean International’s “Symphony of the Seas” and Celebrity Cruises’ “Celebrity Apex”.

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Royal Caribbean completes over 12 weeks of bio bunker fuel testing in Europe

Royal Caribbean Group on Tuesday (19 September) said it successfully completed over 12 consecutive weeks of biofuel testing in Europe. 

Royal Caribbean International’s Symphony of the Seas became the first ship in the maritime industry to successfully test and use a biofuel blend in Barcelona to meet part of her fuel needs. 

The company confirmed onboard technical systems met operational standards, without quality or safety concerns, demonstrating the biofuel blend is a reliable “drop in” supply of lower emission energy that ships can use to set sail across Europe and beyond. 

The tests across Europe also provided valuable data to understand the availability and scalability of biofuel in the region, the firm added. 

Jason Liberty, president and CEO, Royal Caribbean Group, said: “This is a pivotal moment for Royal Caribbean Group’s alternative fuel journey.”

“Following our successful trial of biofuels this summer, we are one step closer to bringing our vision for net-zero cruising to life. As we strive to protect and promote the vibrant oceans we sail, we are determined to accelerate innovation and improve how we deliver vacation experiences responsibly.”

President of the Port of Barcelona, Lluís Salvadó, said: “Royal Caribbean’s success is a clear example of how commitment to innovation makes possible the development of solutions to decarbonise the maritime sector.”

“In this case, it involves the cruise sector and focuses on biofuels, an area in which the Port of Barcelona is already working to become an energy hub, producing and supplying zero carbon fuels, such as green hydrogen and ammonia, and of other almost zero-carbon alternative fuels, such as methanol, biofuels or synthetic fuels. Innovation and collaboration between ports and shipping companies is key to accelerate the decarbonisation of maritime transport.”

The company began testing biofuels last year and expanded the trail this summer in Europe to two additional ships — Royal Caribbean International’s Symphony of the Seas and Celebrity Cruises’ Celebrity Apex

The sustainable biofuel blends tested were produced by purifying renewable raw materials like waste oils and fats and combining them with fuel oil to create an alternative fuel that is cleaner and more sustainable. The biofuel blends tested are accredited by International Sustainability and Carbon Certification (ISCC), a globally recognized organization that ensures sustainability of biofuels and verifies reductions of related emissions.

With Symphony of the Seas departing from the Port of Barcelona and Celebrity Apex departing from the Port of Rotterdam, both ships accomplished multiple sailings using biofuel and contributed critical data on the fuel’s capabilities. 

“These results will help accelerate Royal Caribbean Group’s plans to continue testing the use of different types of biofuels on upcoming European sailings this fall. The company is exploring strategic partnerships with suppliers and ports to ensure the availability of biofuel and infrastructures to advance the maritime energy transition,” the firm said. 

Photo credit: Royal Caribbean Group 
Published: 22 September, 2023

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