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

Bunker Fuel Demand

Bonded bunker fuel sales rebound in July

China’s bonded bunker fuel sales rebounded in July when domestic supply tightness eased and more bonded bunker suppliers launched business.

The country’s bonded bunker fuel sales settled at around 1.68 mln mt in the month, a rally of 8.38% from June, JLC’s data shows.

Domestic supply increased as Chinese refineries’ production of LSFO surged in July. In addition, China National Offshore Oil Corporation (CNOOC) Sales (Shenzhen) Co., Ltd. started to supply bonded bunker fuel oil in July.

Chimbusco and Sinopec Zhoushan sold about 620,000 mt and 680,000 mt of bonded bunker fuel in July, JLC’s data indicates. Bonded bunker fuel sales for SinoBunker and China ChangJiang Bunker (Sinopec) were about 90,000 mt and 40,000 mt, respectively. Around 250,000 mt of of sales were made by suppliers who held local licenses, with PetroChina accounting for roughly 79,000 mt.

China’s bonded bunker fuel exports moved higher in June as the country further raised its LSFO production. The country exported about 1.51 million mt of bonded bunker fuel in June 2022, rising 2.37% from a month earlier, according to data from the General Administration of Customs of PRC (GACC).

Among these exports were roughly 1.41 million mt of heavy bunker fuel and 103,800 mt of light marine gas oil (MGO), accounting for 93.14% and 6.86% respectively.

Bonded bunker fuel exports by state-owned enterprises amounted to approximately 1.32 million mt in the month, accounting for 86.95%, while those by independent enterprises were 197,400 mt, accounting for 13.05%, the data indicates.

On a year-on-year comparison, the bonded bunker fuel exports fell by 14.10%, GACC data indicates.

Domestic bunker fuel demand grows moderately in July

Domestic bunker fuel demand grew modestly in July when high temperatures at coastal regions caused more power consumption and fuel shipment.

The demand for domestic-trade heavy bunker fuel was around 400,000 mt in the month, growing by 80,000 mt or 25% month on month. Meanwhile, demand for light bunker fuel stabilized at roughly 150,000 mt, depressed by high prices.

Bunker Fuel Supply

Bonded bunker fuel imports hit 7-month high

China’s bonded bunker fuel imports leaped sharply and hit a 7-month high in June as domestic supply remained tight and Chinese suppliers’ stockpile was still low despite an increase in LSFO production.

China imported about 517,400 mt of bonded bunker fuel in June 2022, jumping 46.07% month on month, according to the data from the General Administration of Customs of PRC (GACC).

Though China ramped up its LSFO production in the month, the aggregate supply stayed relatively tight and failed to meet domestic demand. Most traders maintained low inventories amid insufficient supply and relatively abundant demand. Additionally, certain dealers who were optimistic about LSFO prices boosted their procurement of imported low-sulfur resources in the month with an expectation of rising bunker fuel prices in the short term.

In terms of the supplier, Malaysia overtook the UAE and ranked in the top position by exporting 277,800 mt of bonded bunker fuel to China, taking up 54% of China’s total bonded bunker fuel imports. The UAE slipped to second place with 180,600 mt, accounting for 35%. The followings were South Korea and Russia, with 41,000 mt from South Korea and 18,000 mt from Russia, accounting for 8% and 3% respectively. There was no imported bonded bunker fuel from Singapore during the month as the country’s LSFO supply continued to tighten and the supply of high-sulfur bunker fuel oil was affected by the contamination issue.

Despite a monthly surge in June, however, the bonded bunker fuel imports saw a drawdown from a year earlier, mainly as a result of softer demand amid the epidemic outbreaks. On a year-on-year comparison, the bonded bunker fuel imports dropped 16.28% in the month, GACC data indicates.

China tallied an accumulation of 2.45 million mt of imported bonded bunker fuel in the first half of this year, shrinking by more than a half from the first six months of 2021, GACC data also shows.

Domestic blended bunker fuel supply extends gains in July

Chinese blenders supplied around 450,000 mt of heavy bunker fuel in total in July 2022, a rise of 70,000 mt or 18.4% from the previous month, JLC’s data shows.

In detail, the supply of low-sulfur asphalt, an important blendstock for heavy bunker fuel, increased in July when refineries’ operating rates climbed. Meanwhile, demand for coal-based diesel grew because of lower prices, and the supply of and demand for shale oil and light coal tar were largely balanced.

In contrast to the rise in heavy bunker fuel supply, the domestic marine gas oil (MGO) supply slipped to around 160,000 mt in the month, down by 10,000 mt or 5.88% from June.

Despite lower feedstock cost, blending margins were still low in July and blenders based their blending on rigid demand.

Bunker Prices, Profits

Editor
Yvette Luo
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Sales (Beijing)
Tony Tang
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Sales (Singapore)
Ginny Teo
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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.

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Related: JLC China Bunker Market Monthly Report (June 2022)
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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: 25 August, 2022