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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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Editor

Yvette Luo

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Tony Tang

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Sales (Singapore)

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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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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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