This week, China's 180CST fuel oil market first declined then rose

October 26th, news from China:

According to the commodity analysis system, the price trend of 180CST fuel oil in East China this week first declined and then rose, with a slight overall decrease. As of October 24, the average price of 180CST fuel oil in China was 5400.00 CNY/ton (including tax), down 0.23% from the price of 5412.50 CNY/ton on October 17.

It is understood that at the beginning of this week, the price of blended marine fuel raw materials in China fell, with limited cost support for marine fuel, leading to a decrease in prices. In the latter half of the week, as international crude oil prices continued to rise, it boosted the Chinese marine fuel market, increasing market sentiment for higher prices; the coastal shipping market's freight rates were low, and shipowners' pre-holiday demand for fuel replenishment was weak, with transactions mainly driven by necessity. It is understood that as of October 24th, in Dalian, the self-pickup low-sulfur 180cst fuel oil quoted by China National Chemical Corporation (CNCC) was 5,550 CNY/ton, and the self-pickup low-sulfur 120cst fuel oil was 5,650 CNY/ton; in Shanghai, the self-pickup low-sulfur 180cst fuel oil was 5,300 CNY/ton, and the self-pickup low-sulfur 120cst fuel oil was 5,400 CNY/ton.

This week, international crude oil futures surged significantly. The main reason was the U.S. government's announcement of sanctions targeting two major oil giants—Lukoil and Rosneft—triggering a panic-driven supply premium in the market.

On the international fuel oil front, Singapore's Enterprise Singapore (ESG) reported that, as of the week ending October 22, Singapore's fuel oil inventories fell by 2.036 million barrels, reaching a four-week low of 23.027 million barrels. Meanwhile, Singapore's middle distillate stocks stood at 14.773 million barrels, up 5.113 million barrels from the previous week. Light distillate fuel inventories in Singapore totaled 13.612 million barrels, declining slightly by 18,000 barrels compared to the prior week.

Market Forecast: Currently, rising international crude oil prices are boosting China's marine fuel market. However, the end-user shipping market remains sluggish, with shipowners primarily focused on meeting their immediate bunker-fueling needs. Meanwhile, the spot low-sulfur fuel oil 180cst price for self-delivery stands at RMB 5,200–5,550 per ton, while the low-sulfur fuel oil 120cst price for self-delivery ranges from RMB 5,300 to 5,650 per ton. It is expected that the fuel oil 180CST market may see a slight upward trend in the near term.