Beijing-based commodity market information provider JLC Network Technology Co. on Thursday (13 October) shared its JLC China Bunker monthly report for September with Manifold Times through an exclusive arrangement:

JLC China Bunker Market Monthly Report (September, 2020)

Highlights

Demand and Supply

Bunker Fuel Demand

Bonded bunker fuel sales rise in September

In September, China’s bonded bunker fuel sales rose to 1.69 million mt, JLC data showed. Sales of bonded bunker fuel stayed high, supported by growing demand with a gradual recovery of the shipping market. In addition, as COVID-19 in Hong Kong was not fully contained, bunker fuel consumption in Hong Kong was still negatively affected. China’s bonded bunker fuel sales were also underpinned by demand that was switched from Hong Kong ports. Chimbusco and Sinopec sold about 625,000 mt and 802,000 mt of bonded bunker fuel, respectively. Bonded bunker fuel sales were about 89,000 mt for SinoBunker and 28,000 mt for China ChangJiang Bunker (Sinopec). New enterprises in the China (Zhejiang) Pilot Free Trade Zone sold 150,000 mt.

China’s bonded bunker fuel sales surged to 1.71 million mt in August, up by 27.43% month on month, according to GAC data. Since August, benefiting from mass production and direct supply from domestic refineries, the prices of China’s bonded bunker fuel oil at domestic ports had been lower than or equivalent to those at other Asian ports. In addition to competitive prices, bonded bunker fuel sales surged with some support by demand that was switched from Hong Kong ports due to COVID-19. Specifically, bonded bunker fuel sales were 854,500 mt for Sinopec, 607,500 mt for Chimbusco, 68,900 mt for SinoBunker, 25,200 mt for China ChangJiang Bunker (Sinopec) and 152,400 mt for new enterprises in the China (Zhejiang) Pilot Free Trade Zone.

Domestic bunker fuel demand stable to higher in September

Domestic bunker fuel demand was stable to higher in September. Coastal shipping demand improved with a traditional peak demand season approaching and receding impacts of typhoon. However, the rise in demand was limited as the market did not improve as much as expected in the traditional peak demand season. End users’ consumption of domestic-trade heavy bunker fuel was about 290,000 mt in the month, up by 40,000 mt or 16% from the previous month. The demand for light bunker fuel was 10,000 mt in September, up by 5,000 mt from August due to flat demand as fishers were cautious about trading and made small purchases based on needs.

Bunker Fuel Supply

Bonded bunker fuel imports rise 30.18% in August

China’s bonded bunker fuel imports were 729,700 mt in August, a rise of 30.18% month on month and a drop of 26.54% year on year, GAC data showed. Supply reduced as bonded bunker fuel imports slumped in July. Meanwhile, domestic production of low-sulfur bunker fuel oil dropped sharply as refiners were depressed by bad margins. Therefore, bonded fuel oil distributors ramped up imports and China’s bonded bunker fuel imports increased markedly in August.

Specifically, the largest import source for China was still Malaysia with 557,000 mt of bunker fuel, followed by South Korea with 98,500 mt. The imports were 33,000 mt from Japan and 32,000 mt from Russia, while imports from Singapore dived to 8,700 mt. 

Domestic blended bunker fuel supply slips in September

Chinese blending producers supplied a total of around 340,000 mt of heavy bunker fuel in September, a dip of 10,000 mt or 2.86% month on month, JLC data showed. In September, tight low-sulfur residue oil supply was eased and downstream users were less reluctant to make pre-holiday restocking. But residue oil prices were under downward pressure with a lack of support from weak fundamentals. Although end-user demand edged up, blending producers lowered their prices to destock as they had a product overhang. The shipping market was tepid, despite a rise in freights ahead of the holiday and growing transport demand. Therefore, domestic blended bunker fuel supply dipped in September. Light bunker fuel supply was about 120,000 mt, slightly higher than August. End-user demand stabilized in the month amid falling crude prices. Supply did not change much as fishers were cautious about pre-holiday restocking amid bearish sentiments.

Bunker Prices, Profits

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 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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Related: JLC China Bunker Market Monthly Report (July, 2020)
Related: JLC China Bunker Market Monthly Report (June, 2020)
Related: JLC China Bunker Oil Market Monthly Report (May, 2020)

Photo credit: JLC Network Technology Co Ltd
Published: 15 October, 2020