China's Marine Fuel Market Sees Volatile Rise in September

October 09, News

According to the commodity analysis system, the marine fuel market in China's East China region experienced volatile upward trends in September. As of September 30, the average price of China's 180CST fuel oil stood at 5,475.00 CNY per ton, up 1.62% from 5,387.50 CNY per ton on September 1.

In September, the price trend of 180CST fuel oil in China fluctuated and rose: At the beginning of September, due to a large conference in the north, there was a decrease in operations, and some ship refueling demand shifted south. Additionally, the freight rates in the shipping market fell, leading to poor terminal demand, which caused the price of marine fuel to decline somewhat; in the middle and late September, the supply of blending raw materials for Chinese marine fuel increased, leading to a rise in prices, thus providing cost support for marine fuel; the enthusiasm for negotiation in the coastal shipping market increased, the freight rates for bulk carriers went up, and the demand for pre-holiday refueling by ship owners also increased, resulting in a continuous rise in the market trend of Chinese marine fuel. It is understood that as of September 30, the self-pickup low-sulfur quotation for 180cst fuel oil in Dalian area of China National Offshore Oil Corporation (CNOOC) was 5,550 CNY/ton, and the self-pickup low-sulfur quotation for 120cst fuel oil was 5,650 CNY/ton; in the Shanghai area, the self-pickup low-sulfur quotation for 180cst fuel oil was 5,350 CNY/ton, and the self-pickup low-sulfur quotation for 120cst fuel oil was 5,450 CNY/ton.

In September, the crude oil market in China was mainly characterized by wide fluctuations. The crude oil market was influenced by both bullish and bearish factors. On one hand, geopolitical factors remained a key influence on the crude oil market; the Russia-Ukraine issue caused the crude oil market to operate strongly, coupled with the Federal Reserve's interest rate cuts benefiting the international oil market, leading to an upward trend in crude oil prices. On the other hand, potential increases in Saudi Arabia's crude oil production, rising U.S. crude oil inventories, and the end of the peak U.S. driving season, along with a less optimistic global economic outlook and oil demand, put pressure on crude oil prices.

Regarding international fuel oil, it is reported that Singapore's Enterprise Singapore (ESG) stated: As of the week ending October 1, Singapore's fuel oil inventories rose by 1.757 million barrels, reaching a two-week high of 24.561 million barrels.

Market Forecast: During the National Day holiday, shipowners will likely fulfill their immediate needs by replenishing fuel for smaller orders. As a result, coastal bulk freight rates remain weak, with the market largely adopting a wait-and-see approach. Currently, the ex-ship price for 180cst low-sulfur fuel oil stands at RMB 5,300–5,550 per ton, while the ex-ship quote for 120cst low-sulfur fuel oil is RMB 5,400–5,650 per ton. It is expected that the 180CST fuel oil market will likely stabilize in the near term.