A recent news article published in the Manifold Times states that China bonded bunker fuel sales up by 1.7% year-on-year from Jan to Apr 2022.
China’s bonded bunker fuel
China sold 6.6449 million metric tonnes (mt) of bonded bunker fuel from January to April 2022, up 1.7% year-on-year, according to China-based consultancy LongZhong on Thursday (19 May).
Despite the impact of the Covid-19 epidemic, the country’s bonded bunker fuel supply market has maintained a stable development trend with March to April sales showing positive growth year-on-year.
Singapore’s bonded fuel supply
In comparison, it said, the world’s largest marine bunkering centre Singapore’s bonded fuel supply totalled 15,047,400 mt between January to April 2022, a year-on-year decrease of 11.89%.
The main reason for the decline in bunkering in the Singapore market is that the quality of local high-sulphur fuel oil has led to a decrease in the willingness to refuel.
This is especially seen in April when the sales volume of high-sulphur fuel oil fell by 13% month-on-month.
From January to April 2022, the bunkering volume of Sinopec and Sinopec fuel oil tankers accounted for 84% of the domestic total in China, occupying a major market share.
The fuel supply of bonded ships in Zhoushan, Zhejiang reached 1.868 million tons, an increase of 18.9% year-on-year. It accounts for 28% of the national bonded ship fuel supply, and is the largest domestic bonded ship fuel supply port.
According to Longzhong, the bonded fuel supply in Shenzhen, Guangdong area increased by 26% month-on-month in April, which is related to the increase of local bonded oil supply enterprises and the substantial increase in the market share of Sinopec Fuel Oil in the southern region.
With the sharp drop in the import volume of bonded low-sulphur fuel oil at China in April, about 68.8% of the bonded fuel consumption in China from January to April 2022 was from domestic resources.
Since May, the low-sulphur fuel oil resources in the Singapore market have tightened, while the export quota of low-sulphur fuel oil by Chinese refineries has been maintained at 3.25 million mt, providing strong support for the resources of China’s bonded ship oil supply market.
It is expected that the output of low-sulphur fuel oil in China’s refineries will remain stable month-on-month in May.
Current rise in LSFO
Due to the current rise in low-sulphur fuel oil prices, the price gap between high and low sulphur has widened again. It is not ruled out that there will be an increase in low-sulphur output.
Some domestic low-sulphur resources enter the bonded marine fuel oil market to support the blending of raw materials, and the group has also become an important supplementary channel for bonded marine fuel resources.
Under this premise, with the slow recovery of market demand, it is expected that bonded bunker sales volume in China may still increase slightly during May.
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Source: Manifold Times
