In mid-December, the price of 180CST fuel oil in China first rose and then fell

December 23rd, News

According to the commodity analysis system, the price of 180CST fuel oil in the East China region in mid-December first rose and then fell. As of December 23, the average price of 180CST fuel oil in China was 5350.00 CNY/ton (including tax), a decrease of 1.15% from the price of 5337.50 CNY/ton on December 10.

It is understood that in mid-December, the market for blended fuel oil feedstock in China showed weak demand, and cost support for marine fuel was limited. However, recently, the shortage of tax invoices in the marine fuel market has provided some boost to the market. Meanwhile, the downstream coastal shipping market is experiencing weak demand for cargo transportation, resulting in sluggish freight rates; shipowners’ demand for refueling remains primarily driven by immediate needs. As of December 23, according to available information, the ex-factory quoted prices for low-sulfur fuel oil 180cst in the Dalian region of Zhongran were RMB 5,500 per ton, while the ex-factory quoted prices for low-sulfur fuel oil 120cst were RMB 5,600 per ton. In the Shanghai region of Zhongran, the ex-factory quoted prices for low-sulfur fuel oil 180cst were RMB 5,050 per ton, and for low-sulfur fuel oil 120cst, they were RMB 5,150 per ton.

Recently, international crude oil prices first fell and then rose. At the beginning of this period, regional tensions eased somewhat, reducing the geopolitical risk premium. Meanwhile, weakening U.S. demand and ongoing U.S. tariff issues weighed on the global economy and dampened demand expectations, causing international oil prices to decline. Later, however, heightened geopolitical tensions in Venezuela led to a rebound in crude oil prices.

Regarding international fuel oil, according to Singapore’s Enterprise Singapore (ESG): As of the week ending December 17, Singapore’s fuel oil inventories fell by 1.404 million barrels, reaching a four-week low of 24.658 million barrels; light distillate inventories rose by 65,000 barrels, hitting a 17-week high of 15.056 million barrels; and middle distillate inventories increased by 71,000 barrels, reaching a two-week high of 8.431 million barrels.

Market Forecast: Currently, international crude oil prices are on the rise, and with low inventories of taxed finished products, this is boosting China's marine fuel market. However, the end-user shipping market remains weak, and some ports are experiencing restricted refueling operations due to strong winds, leaving shipowners with a pressing need to replenish their fuel supplies. At present, the ex-warehouse quote for 180cst low-sulfur fuel oil stands at RMB 5,100–5,550 per ton, while the ex-warehouse quote for 120cst low-sulfur fuel oil is RMB 5,200–5,650 per ton. It is expected that the 180CST fuel oil market will likely remain in a narrow trading range in the near term.