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JLC China Bunker Market Monthly Report (September 2022)

China’s bonded bunker fuel sales rolled back in September, as bonded bunker fuel supply tightened in several regions while bunkering demand was flat.

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Bonded bunker fuel sales in Zhoushan September

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

Bunker Fuel Demand

Bonded bunker fuel sales retreat in September

China’s bonded bunker fuel sales rolled back in September, as bonded bunker fuel supply tightened in several regions while bunkering demand was flat. In addition, the bunkering business was hit hard at certain ports that were swept by the typhoon.

The country sold about 1.66 million mt of bonded bunker fuel in September, a decline of 8.06% from the previous month, JLC’s data shows. Bonded bunker fuel sales by Chimbusco and Sinopec Zhoushan settled at 570,000 mt and 670,000 mt in the month respectively. Meanwhile, those by SinoBunker and China ChangJiang Bunker (Sinopec) were 50,000 mt and 40,000 mt respectively. PetroChina Zhoushan recorded about 157,200 mt of bonded bunker fuel sales in the month, versus 110,800 mt in August. Suppliers who held local licenses sold about 325,000 mt of bonded bunker fuel, accounting for about 20% of the total, up from 13.61% a month earlier, thanks to the jump in the sales by PetroChina Zhoushan.

China’s bonded bunker fuel exports extended gains in August, on the back of relatively high production combined with a new batch of export quota in the previous month.

China recorded nearly 2.03 million mt of bonded bunker fuel exports in August 2022, surging 19.68% month on month and 20.09% year on year, according to the data from the General Administration of Customs of PRC (GACC).

The exports of heavy bunker fuel and light marine gas oil (MGO) were around 1.94 million mt and 93,100 mt in the month, respectively, making up 95.41% and 4.59% of the total. The bonded bunker fuel exports by state-owned enterprises were roughly 1.80 million mt in the month, occupying 88.66%, while those by local independent enterprises settled at 230,100 mt, accounting for 11.34%.

The leap in the exports came as China released a new batch of quota on LSFO exports in July which encouraged the refiners who ran short of export quota to increase their production to some degree. Despite a month-on-month drop, the country’s LSFO production remained relatively high in August. However, domestic demand was hit by the re-spread of the virus, forcing refiners to expand their bonded bunker fuel exports.

China bunker exports by region sept 2022
China major blending producers bunker supply sept 2022

Domestic heavy bunker fuel demand expands in September

Domestic-trade heavy bunker fuel demand strengthened in September, as bunker fuel prices fell and the approaching of the National Day holiday aroused some replenishment. The demand for heavy bunker fuel amounted to 420,000 mt in September, an increase of 20,000 mt or 5% from August, JLC’s data indicates.

In contrast, demand for light bunker fuel shrank, as marine gas oil prices were still relatively high and downstream buyers just purchased on a need-to basis. The demand for light bunker fuel was 150,000 mt in the month, down by 10,000 mt or 6.67% month on month, JLC’s data shows.

Bunker Fuel Supply

China sees further fall in Aug’s bonded bunker fuel imports

China’s bonded bunker fuel imports continued to fall in August, as relatively high international prices continued to depress Chinese buyers’ interest.

The country imported about 334,900 mt of bonded bunker fuel in August 2022, a dip of 5.02% from the previous month, according to data from the General Administration of Customs of PRC (GACC).

Despite a monthly drop, international bunker fuel prices stayed relatively high in August amid steep freight rates. As a result, buyers gave priority to domestic low-sulfur resources, of which prices continued to sink and were still more competitive than imported ones. In addition, market participants who anticipated further price declines reduced their purchases of imported low-sulfur resources.

On a year-on-year comparison, the imports plunged by 57.24%, GACC data shows. The slump was mainly because of the expansion of LSFO production across the country. Chinese refiners have been accelerating their LSFO production in recent years after China rebated value-added tax on fuel oil supplied to international ships as from February 1, 2020.

In terms of the supplier, the UAE regained the top spot by exporting 153,900 mt of bonded bunker fuel to China in August, accounting for 45.95% of China’s total bonded bunker fuel imports. Malaysia came in second with the imports from the country amounting to 140,000 mt, making up 41.82%. The imports from South Korea stabilized at 41,000 mt, accounting for 12.23%, helping the country maintain third place. There was still no imported bonded bunker fuel from Singapore in the month.

Bonded bunker fuel imports by source aug 2022

Domestic blended bunker fuel supply slightly down in September

Domestic supply of blended heavy bunker fuel dipped in September, dragged down by descending demand and poorer margins amid higher costs.

Chinese blenders supplied around 460,000 mt of heavy bunker fuel in September 2022, a modest drop of 20,000 mt or 4.44% from a month earlier, JLC’s data shows. The drop was partly ascribed to a decrease in the supply of low-sulfur asphalt, shale oil, coal-based diesel and light coal tar, which are important blendstocks for heavy bunker fuel. In addition, relatively high costs brought blending margins down, discouraging blenders from supplying heavy bunker fuel. Benders had to cut their prices to promote sales when domestic demand for bunker fuel was sluggish and the delivery was not smooth.

As for light bunker fuel, the supply of domestic marine gas oil (MGO) stabilized at 180,000 mt in the month. Coking margins were still good, but the overall supply did not grow, because refiners preferred to produce diesel rather than bunker fuel amid soaring diesel prices.

Arrival of imported FO cargoes Sept
China main oil blending feedstock prices 2022
China Domestic trading 180 cst bunker fuel sept
China bunker blending profit by region sept 2022

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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 (August 2022)
RelatedJLC China Bunker Market Monthly Report (July 2022)
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RelatedJLC China Bunker Market Monthly Report (April 2022)
RelatedJLC China Bunker Market Monthly Report (March 2022)
RelatedJLC China Bunker Market Monthly Report (February 2022)
RelatedJLC 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: 14 October, 2022

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Research

ICCT policy brief explores benefits of global 0.10% sulphur cap on marine fuels

Studies have found ships using scrubbers with heavy fuel oil emit more particulate matter and black carbon emissions than those using marine gas oil.

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ICCT sulphur policy brief

The International Council on Clean Transportation (ICCT) on Tuesday (8 July) introduced a policy brief examining how further reducing the global maximum allowable fuel sulphur content of bunker fuel from 0.5% to 0.1% could affect air pollution emissions and premature mortality from fine particulate matter (PM2.5).

Currently, ships must adhere to a global 0.5% fuel sulphur limit and a 0.1% limit in ECAs, unless they use scrubbers. However, studies have found that ships using scrubbers with heavy fuel oil emit more particulate matter and black carbon emissions than those using marine gas oil.

The brief considered three compliance pathways:

  1. Scrubber Max scenario in which ships that use very-low sulfur fuel oil (VLSFO) switch to high-sulfur heavy fuel oil (HFO) with scrubbers to comply;
  2. Scrubber Allowed scenario in which ships that use VLSFO switch to marine gas oil (MGO) to comply;
  3. Distillate Only scenario in which scrubbers are not allowed and ships that use HFO and scrubbers or VLSFO switch to MGO to comply.

In summary, the research found that relative to a baseline scenario based on 2023 ship activity data, reducing the sulphur content of marine fuels to comply with a 0.1% sulphur limit would:

  • Mitigate air pollution. Across the three compliance scenarios, shipping-attributable sulfur oxide emissions are estimated to fall by 75%–85%, PM2.5 by 46%–66%, and black carbon by 27%–41%. The scenario prohibiting scrubbers yields the highest estimated emission reductions.
  • Reduce premature deaths. The three compliance scenarios avoid between 3,900 and 4,500 premature deaths annually, with the most significant reductions achieved when scrubbers are not allowed.
  • Deliver substantial economic benefits. Health-related economic benefits are estimated to range from $9.3 billion to $10.9 billion annually, depending on the compliance pathway.
  • Incentivize cleaner fuels. A global 0.1% sulfur standard that promotes distillate fuel use would increase baseline fossil fuel costs and reduce the price gap between conventional and zero or near-zero greenhouse gas emission fuels.

The complete policy brief Health and air pollution benefits of a global 0.1% fuel sulfur limit  on marine fuels can be obtained from the link here.

 

Photo credit: International Council on Clean Transportation
Published: 9 July 2025

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Research

Integr8 Fuels report shares comprehensive analysis of Mediterranean ECA

Data reveals a market in rapid transition, confirming some industry predictions while uncovering new, emerging risks for ship operators.

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Integr8 Fuels trading intelligence (July 2025)

International bunker trading firm Integr8 Fuels on Monday (7 July) shared its new report ‘Mediterranean ECA: Immediate Operational and Commercial Impact of Implementation’ which provides the first comprehensive analysis of the rule’s effects on fuel quality and regional availability.

The data reveals a market in rapid transition, confirming some industry predictions while uncovering new, emerging risks for ship operators. The following key findings include:

  1. Dramatic Supply Shift Confirmed: VLSFO Availability Contracts Sharply. VLSFO’s share of the Mediterranean fuel market has plummeted from over 60% in December to just 37.5% in May. In parallel, the number of ports supplying VLSFO has fallen by 47%, creating new logistical challenges for vessels that continue to use the grade.
  2. VLSFO Instability Spikes as Supply Chain Adapts. Very Low Sulphur Fuel Oil (VLSFO) off specification rates more than doubled from 1.5% in December to 3.8% in May. Critically, one in four (25%) of these off-specs were for total sediment potential (TSP), indicating a rising risk of sludge formation that can damage engines. This trend appears linked to extended in-tank storage and the consolidation of older fuel stocks as demand slows and suppliers pivot away from VLSFO.
  3. Persistent Flash Point Risks in Key LSMGO Hubs. Flash point non-conformance has increased significantly and now accounts for over two-thirds of all LSMGO off specs. Our data shows this is not a random problem, with over 75% of all flash point incidents concentrated in Spain, Turkey, and Italy, signalling a persistent potential for SOLAS violations in core supply zones.

Note: The full report may be obtained from Integr8 Fuels here.

 

Photo credit: Integr8 Fuels
Published: 8 July 2025

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Bunker Fuel

Integr8: IEA’s 2030 outlook and what it means for bunker markets

Research Contributor Steve Christy analyses IEA’s oil market outlook to 2030 which he says will shape the bunker market over the rest of this decade.

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The IEA’s 2030 Outlook and What It Means for Bunker Markets

By Steve Christy, Research Contributor, Integr8 Fuels
[email protected]   

25 June 2025

The ‘Oil World’ will start to decline within the next 5 years

With oil prices in turmoil, moving much higher because of US, Israeli and Iranian attacks, and then much lower on what looks like a fragile ceasefire, it is perhaps a good time to take a ‘bigger picture’ look at the direction of the oil industry over the next 5 years. The IEA has just published its oil market outlook to 2030, and there is a lot within this analysis that will shape the bunker market over the rest of this decade.

Importantly, we are moving from an industry that has been growing, to one that will soon be in decline. In the IEA outlook, world oil demand is forecast to show only modest gains over the next 2 years, with minimal gains in 2028/29 and then go into decline in 2030.

graph1 no line

graph2

Petrochemicals and aviation is where the growth is

Looking at the key aspects of the oil products markets over the next 5 years, there are a few high-profile developments taking place. Firstly, there is significant growth in the petrochemical sector, and this will drive higher demand for LPG, ethane, and naphtha.

Secondly, there is also growth in jet demand. This follows the continued increases air travel and transport, and that jet fuel still essentially can only come from an oil refinery.

graph4

Bunker demand is expected to remain flat

Within their analysis, the IEA expects demand for bunkers to remain stable at around 5 million b/d over the outlook period. Their basis is that a 2% p.a. growth in tonne-kilometres demand will be offset by efficiency gains in the shipping industry and IMO regulations supporting some switching to lower emissions fuels, such as biofuels and ammonia.

Oil demand is falling as EVs are increasing

Gasoline and diesel have accounted for around 40% of total world oil demand. The main reason for oil demand starting to decline at the end of the decade is the expansion of electric vehicles (EVs) and the accompanying loss of gasoline and diesel demand in the transport sector.

For us in bunkers, it is the gasoil/diesel and fuel oil sectors that will be most influential.

Substantial changes in the outlook for US & China

Two major changes from last year’s IEA report are that:

  • US oil demand is still forecast to fall, but at a much slower pace (which is not surprising under President Trump’s policies).
  • Oil demand in China will fall much earlier than previously anticipated.

China is now the world leader in EVs in terms of manufacturing and sales. This, along with massive investments in the high-speed rail network and structural shifts in the economy, mean the IEA is now expecting China’s oil demand to start falling within the next 4 years! This is a radical change, with China being the powerhouse behind increases in world oil demand in recent years.

In contrast, before President Trump was elected, the forecast was for US oil demand to fall by 1.5 million b/d between 2025 and 2030. Now, with Trump in power, the IEA has ‘downgraded’ this forecast decline to just 0.45 million b/d

Europe shows the biggest drop in oil demand

The agency has kept its previous expectation for a 0.8 million b/d drop in European oil demand between now and 2030. This means Europe is now at the forefront of changes in oil demand over the next 5 years.

There are no planned refinery closures in Europe after this year, but lower demand in the region will lead to lower refinery throughputs and product availabilities. It is how product balances unfold between cuts in refinery output versus the drop in oil demand; this will impact trade, pricing and how bunker markets are supplied in the region.

Limited changes in the US; but no market can stand alone

The situation in the US may be more balanced given the slower pace at which oil is removed from the energy mix. But we know how markets are ‘interwoven’, and no international bunker market is immune to what is happening elsewhere in the world.

graph3

Latin America & African demand continues to rise

It is by coincidence that forecast declines in demand in Europe and the US are exactly matched by increases in oil demand in the growing economies of Latin America and Africa. This means that oil demand in the Atlantic Basin is expected to be close to current levels in 5 years time. However, with very few new refinery projects in the growth regions, it does stress the need for additional trade volumes to move between areas to achieve regional balances across different product groups. We in bunkers will be affected by these additional trade flows and price implications.

The Middle East not as it seems; its rising

On the face of it, there is a slight decline in Middle East oil demand over the next 5 years. However, once you dig into this, Saudi Arabia’s strategy to stop burning domestic oil for power generation and desalination plants* more than explains the cut. If this is taken out of the equation, Middle East product demand is forecast to increase by around 0.4-0.5 million b/d by 2030.

* part of this is a reduction is in fuel oil use, which could push more of this into the international market.

Nonetheless, the Middle East is one of the key areas where new refining capacity, upgrading and desulphurisation is taking place. Therefore, long haul product exports from the region are likely to continue to increase. This will cover some of the imbalances elsewhere in the world, but will also have price implications.

Asia & China could see the biggest changes for us

Finally, some of the biggest issues hitting the oil and bunker markets are likely to be seen in Asia As outlined, oil demand in China is expected to start falling by the end of the decade. But this is in contrast to what is happening in India and other Asian countries, where a combined growth of almost 2 million b/d is seen between now and 2030.

This is where trade flows, pricing and market influence could be interesting. Despite no growth in Chinese oil demand, there are still a number of refinery capacity additions in the pipeline. There are of course a number of scenarios surrounding these dynamics, but one obvious one is that China becomes an even bigger products exporter over the next 5 years. Again, this will have implications for all the major products, including what happens to us in bunkers.

This report poses more questions than answers

Clearly these are prominent issues for us in the bunker market. Longer term planners in our business will be assessing the potential surpluses and shortfalls by region for VLSFO, blending components and HSFO based on these demand and refining forecasts. It will be interesting to see how trade flows, bunker pricing and China influence our business over the next 5 years.

 

Photo credit: Integr8 Fuels
Published: 26 June, 2025

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