January China's bunker fuel market fluctuates

January 31st, News

According to the commodity analysis system, the bunker fuel market in East China experienced fluctuations in January. As of January 30, the average price of 180CST fuel oil in China was 5,362.50 CNY per ton, an increase of 0.23% from 5,350.00 CNY per ton on January 1.

In January, the price of 180CST fuel oil in China fluctuated: In the first half of January, the prices of blended raw materials for marine fuel in China declined, with limited cost support. The coastal freight rates for bulk carriers fell, and shipowners mainly made small orders to replenish fuel, leading to a continuous decline in marine fuel prices. In the latter part of the month, the continuous rise in international crude oil prices boosted the Chinese marine fuel market. Additionally, due to the recent cold weather, the demand for coal transportation increased, causing a slight and sustained increase in freight rates. As a result, the prices of marine fuel continued to rise. It is understood that as of January 30, the self-pickup low-sulfur 180cst fuel oil price in Dalian by China National Offshore Oil Corporation (CNOOC) was 5,350 CNY/ton, and the self-pickup low-sulfur 120cst fuel oil price was 5,450 CNY/ton. In Shanghai, the self-pickup low-sulfur 180cst fuel oil price was 5,350 CNY/ton, and the self-pickup low-sulfur 120cst fuel oil price was 5,450 CNY/ton.

In January, international crude oil prices experienced volatile yet upward trends: The crude oil market was boosted by multiple positive factors, including supply disruptions caused by the U.S. winter storm and escalating geopolitical tensions in the Middle East. The core driver was the significant short-term supply disruption, coupled with a rebound in geopolitical risk premiums, leading to a concentrated release of bullish sentiment and sustaining the upward trend in crude oil prices. As a direct result, China’s refined oil market was also affected, with gasoline and diesel prices rising accordingly.

Regarding international fuel oil, according to information from Singapore’s Enterprise Singapore (ESG): As of the week ending January 28, Singapore’s fuel oil inventories fell by 3.44 million barrels, reaching a 37-week low of 19.938 million barrels; Singapore’s light distillate inventories rose by 1.087 million barrels, hitting a 149-week high of 16.908 million barrels; and Singapore’s middle distillate inventories declined by 41,000 barrels, dropping to a two-week low of 8.597 million barrels.

Market Forecast: The continued rise in international crude oil prices is boosting China’s marine fuel market. Shipowners are gradually stocking up on fuel, and coupled with tight supply of taxed resources in some regions, marine fuel prices continue to climb. Affected by rising costs, coastal bulk freight rates have increased, though demand from end-user markets remains moderate. Currently, the ex-warehouse quote for 180cst low-sulfur fuel oil stands at RMB 5,250–5,350 per ton, while the ex-warehouse quote for 120cst low-sulfur fuel oil is RMB 5,350–5,450 per ton. It is expected that the 180CST fuel oil market will continue its upward trend in the near term.