Bunkering Market in China Recovers with Bunker Fuel Demand

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Beijing-based commodity market information provider JLC Network Technology Co. on Thursday (13 August) shared its JLC China Bunker monthly report for July, reports Manifold Times.

JLVJLC China Bunker Market Monthly Report (July, 2020)

Bonded bunker fuel sales rise in July

In July, China’s bonded bunker fuel sales grew to about 1.36 million mt, versus 1.18 million mt in June, JLC data showed.

Demand for bonded bunker fuel improved in July as the shipping market recovered with better control of the virus in some parts of the world.

Idle freight capacity

Idle freight capacity was activated upon receding impacts of the virus and demand for containers transport improved markedly.

Strong demand for iron ore

Meanwhile, sales of bonded bunker fuel were driven up by strong demand for iron ore recently amid positive sentiment.

Chimbusco and Sinopec

Chimbusco and Sinopec sold about 502,000 mt and 635,000 mt of bonded bunker fuel, respectively.

Fuel sales

Bonded bunker fuel sales were about

  • 100,000 mt for SinoBunker,
  • 12,000 mt for China ChangJiang Bunker (Sinopec)
  • and 22,000 mt for CNPC-TAFO.
  • New enterprises in the China (Zhejiang) Pilot Free Trade Zone sold 85,000 mt.

GAC data

China’s bonded bunker fuel sales climbed to 1.29 million mt in June, up by 3.3% month on month, according to GAC data.

Fuel prices improve in June

In June, bonded bunker fuel prices rose, fueled by improving sentiment.

In addition, domestic ports were overwhelmed by congestion and tankers had difficulties unloading.

Freight capacity 

  • End-user demand improves
  • freight capacity tightens
  • leads to higher freight rates

Shipping market rebounds

The shipping market rebounds slightly as governments of different countries adopted a series of policies to stimulate economic recovery, further supporting a modest increase in bonded bunker fuel sales in June.

Bonded bunker sales

Specifically, bonded bunker fuel sales were

  • 607,000 mt for Sinopec,
  • 486,000 mt for Chimbusco,
  • 96,000 mt for SinoBunker,
  • 8,800 mt for China ChangJiang Bunker (Sinopec),
  • 16,000 mt for CNPC-TAFO and
  • 79,000 mt for new enterprises in the China (Zhejiang) Pilot Free Trade Zone.

 

Domestic bunker fuel demand slides in July

The drop in domestic bunker fuel demands in July is attributed to

  • The extended rainy season in the southern region
  • The sluggish shipping market.
  • The unstable bulk market’s support from the hot weather for a short period.
  • Poor demand for coal with low shipping market.

Consumption of domestic-trade 

End users’ consumption of domestic-trade heavy bunker fuel was

  • about 260,000 mt in the month,
  • down by 20,000 mt or 7.14% from the previous month.

The demand for light bunker fuel was 90,000 mt in July, down by 5,000 mt from June on thin trades amid frequent rains.

Bonded bunker fuel imports drop 10.36% in June

China’s bonded bunker fuel imports were 1,392,000 mt in June, a decline of 10.36% month on month and a rise of 36.33% year on year, GAC data showed.

In June, bunker fuel prices in Malaysia and Singapore weakened, compared with domestic bunker fuel prices.

The cost-effectiveness of bunker fuel from these countries continued to incentivize domestic bonded fuel distributors to make large purchases.

Besides, some early cargoes of bonded bunker fuel imports delayed arrivals to June. Therefore, China’s bonded bunker fuel imports in June were relatively high, despite a month-on-month slip.

Malaysia and Singapore

Specifically, the largest import source for China was still Malaysia with 770,000 mt of bunker fuel, followed by Singapore with 279,000 mt.

The imports were 123,000 mt from South Korea, 90,000 mt from UAE and 60,000 mt from Bahamas. Besides, imports from Japan and Thailand totaled 69,000 mt.

Domestic blended bunker fuel supply dips in July

Chinese blended producers supplied a total of around 330,000 mt of heavy bunker fuel in July, a drop of 10,000 mt or 2.94% month on month, JLC data showed.

Feedstock prices

Feedstock costs were stable to lower due to slim downstream demand, despite a tight supply of low-sulfur residue oil.

Domestic bunker fuel

Domestic bunker fuel prices stayed low amid a weak coastal bulk market and tepid end-user demand.

Although blending profits increased, blended producers were reluctant to boost supply and most of them mainly supplied to buyers with contracts and operated with low stocks.

Slip in bunker fuel supply

Therefore, domestic blended bunker fuel supply in July slipped. Light bunker fuel supply was about 90,000 mt, down by 10,000 mt from June.

Despite rising international crude prices, light bunker fuel supply stayed low amid slack sentiment.

JLC Network Technology Co., Ltd

JLC Network Technology Co., Ltd is recognised as the leading information provider in China. We specialise in providing transparent, high-value. authoritative market intelligence and professional analysis in commodity markets. Our expertise covers oil, gas. coal, chemical, plastic, rubber. fertilizer and metal industry, etc.

JLC China Bunker Oil Market

JLC China Bunker Oil Market Monthly Report is published by JLC Network Technology Co., Ltd every month on China bunker market’s, demand, supply, margin, freight index. forecast and so on. The report provides full-scale & concise insight into China’s bunker oil market.

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Source: The Manifold Times

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