This week, China's 180CST fuel oil market consolidates at high levels

March 29th, news:

According to the commodity analysis system, this week in the East China region, the 180CST fuel oil market has been consolidating at high levels. As of March 27, the average price of 180CST fuel oil in China was 6587.50 CNY/ton (including tax), an increase of 0.38% from the price of 6562.50 CNY/ton on March 22.

It is understood that this week, the market for blended marine fuel in China has been steady with a downward trend, with limited cost support for marine fuel; in the first half of the week, bulk freight rates at the downstream terminals increased, but shipowners mainly refueled based on their essential needs due to fluctuations in international crude oil prices. It is understood that as of March 27th, the self-pickup price for low-sulfur 180cst fuel oil in Dalian by China National Offshore Oil Corporation (CNOOC) was 6700 CNY/ton, and the self-pickup price for low-sulfur 120cst fuel oil was 6800 CNY/ton; in Shanghai, the self-pickup price for low-sulfur 180cst fuel oil was 6700 CNY/ton, and the self-pickup price for low-sulfur 120cst fuel oil was 6800 CNY/ton.

This week, international crude oil prices experienced volatile downward trends. On the U.S. side, reports indicated that peace talks with Iran were underway and showing positive progress, easing market anxieties and causing international oil prices to fall. However, Iran denied engaging in peace talks with the U.S., and the conflict remains unresolved, leading to a rise in international oil prices. In the medium to long term, as long as the risks in the Strait of Hormuz persist, international oil prices will continue to be characterized by high risk premiums and high volatility.

Regarding international fuel oil, according to the Enterprise Singapore (ESG): As of the week ending March 25, Singapore’s inventories rose by 4.71 million barrels, reaching a 10-week high of 24.509 million barrels; Singapore’s light distillate inventories increased by 5.04 million barrels, hitting a two-week high of 18.438 million barrels; and Singapore’s middle distillate inventories climbed by 1.227 million barrels, reaching a six-week high of 9.099 million barrels.

Market Forecast: Currently, international crude oil prices are experiencing volatile fluctuations, and the Chinese marine fuel market is showing an increasing wait-and-see sentiment. In the second half of the week, coastal bulk freight rates have retreated, with generally moderate demand for cargo transportation. Shipowners’ willingness to replenish fuel supplies remains weak, and their fuel-replenishment needs are primarily driven by immediate necessities. At present, the ex-warehouse price for 180cst low-sulfur fuel oil stands at RMB 6,300–6,800 per ton, while the ex-warehouse price for 120cst low-sulfur fuel oil is RMB 6,400–6,900 per ton. Given the persistence of geopolitical premiums, it is expected that the 180CST fuel oil market will likely continue to fluctuate within a high-range in the near term.