Beijing-based commodity market information provider JLC Network Technology Co. recently shared its JLC China Bunker monthly report for September 2024 with Manifold Times through an exclusive arrangement.
China’s bonded bunker fuel sales fall in September
China’s bonded bunker fuel sales fell in September, as port operation in East China was dampened by typhoons, also due to tighter low-sulfur fuel oil (LSFO) supply.
The country sold roughly 1.66 million mt of bonded bunker fuel in the month, with the daily sales inching down by 0.02% month on month to 55,333 mt, JLC’s data shows.
Bonded bunker fuel sales by Chimbusco, Sinopec (Zhoushan), SinoBunker, and China Changjiang Bunker (Sinopec) settled at 490,000 mt, 610,000 mt, 60,000 mt, and 30,000 mt, respectively. In the meantime, suppliers with regional bunkering licenses sold 470,000 mt, the data indicates.
Overall bunkering demand was relatively flat in September, though it used to be seasonally strong.
Meanwhile, ports in East China were hit hard by two strong typhoons, and certain ports suspended their bunkering operation temporarily. In addition, domestic LSFO supply continued to decline as export quota tightness lingered, which also weighed down China’s sales.
China’s bonded bunker exports decrease in August.
China’s bonded bunker fuel exports decreased in August, due to lower domestic production and ship congestion at Zhoushan Port.
The country exported about 1.55 million mt of bonded bunker fuel in the month, with the daily exports at 49,994 mt, a decline of 12.15% month on month and 4.91% year on year, JLC estimated, concerning data from the General Administration of Customs of PRC (GACC).
Among the exports, heavy bunker fuel took about 1.46 million mt, accounting for 94.44% of the total, while light bunker fuel exports settled at 86,200 mt, making up 5.56%.
Dragging down the exports, Chinese refiners continued to cut their LSFO output amid quota tightness. These refiners produced about 1.16 million mt of LSFO in the month, with the daily production at 37,258 mt, a loss of 12.37% from the prior month and 9.62% from a year earlier, JLC’s data shows.
In addition, the explosion of a container ship at Ningbo-Zhoushan Port on August 9 and a surge of fishing vessels caused congestion of ships in Zhoushan, depressing the port’s bunkering operation and adding to the downward pressure on China’s exports.
China exported a total of 12.91 million mt of bonded bunker fuel in the first eight months of this year, with the daily exports at 52,901 mt, down by 5.89% from the same months in 2023. Heavy bunker fuel exports stood at 12.17 million mt in the period, accounting for 94.32%, while light bunker fuel exports settled at 733,800 mt, accounting for 5.68%.
China’s bonded bunker fuel exports are expected to plunge in September and the fourth quarter, because of tight quotas on LSFO exports. The country has recently released this year’s third batch of LSFO export quotas, setting the quotas on only 1.0 million mt, sources said. The release brought the total 2024 quotas to 13.00 million mt, dropping by 1.29% from those for 2023 (13.17 million mt for 2023 after conversion).
Domestic-trade heavy bunker fuel demand rallies in September
Domestic-trade heavy bunker fuel demand rallied in September, boosted by pre-holiday restocking before the National Day holiday.
Domestic-trade heavy bunker fuel demand climbed to 390,000 mt in the month, up by 30,000 mt or 8.11% from the prior month, JLC’s data shows.
Capping the upside, however, some ports were briefly closed amid strong typhoons.
On the contrary, domestic-trade light bunker fuel demand slipped to 140,000 mt in September, down by 10,000 mt or 6.67% month on month. Continuous drops in diesel prices triggered bearish sentiment in the light bunker fuel market, and many shipowners still stood on the sidelines.
