This week, China's 180CST fuel oil market trend is downward

May 29th News

According to the commodity analysis system, the price of 180CST fuel oil in the East China region has declined this week. As of May 28, the average price of 180CST fuel oil in China was 6,025 CNY/ton (including tax), a decrease of 0.41% from the price of 6,050 CNY/ton on May 22.

It is understood that this week, the blending raw material market for marine fuel in China has declined, with limited cost support for marine fuel. Currently, compliance inspections targeting the wholesale segment of marine fuel are still ongoing in many parts of China, and the supply of taxed resources remains tight. In the bunker market, downstream demand is weak, and shipowners are cautious about refueling. It is understood that as of May 28, the self-pickup price for low-sulfur 180cst fuel oil in the Dalian area by China National Bunker (CNOB) is 6,250 CNY/ton, and the self-pickup price for low-sulfur 120cst fuel oil is 6,350 CNY/ton. In the Shanghai area, the self-pickup price for low-sulfur 180cst fuel oil is 5,750 CNY/ton, and the self-pickup price for low-sulfur 120cst fuel oil is 5,850 CNY/ton.

This week, the international crude oil market trended downward, mainly influenced by three factors: the fluctuating expectations of US-Iran negotiations, the resumption of navigation in the Strait of Hormuz, and the anticipated easing of geopolitical conflicts. Coupled with the impact of U.S. crude oil inventory data, the market's trading focus gradually shifted from "supply shortage concerns" to "expectations of a situation easing."

Regarding international fuel oil, according to Singapore’s Enterprise Singapore (ESG): As of the week ending May 27, Singapore’s fuel oil inventories fell by 7.97 million barrels to 207.03 million barrels; light distillate inventories declined by 260,000 barrels to 146.18 million barrels; and middle distillate inventories decreased by 62,000 barrels to 89.64 million barrels.

Market Forecast: Currently, international crude oil prices are experiencing volatile downward trends, and market sentiment among Chinese marine fuel suppliers is becoming increasingly cautious. The wholesale inspection process is still ongoing, and the tight supply situation following tax clearance is unlikely to ease in the short term. Before the peak summer electricity demand period, coal transportation and foreign trade shipping demand may further increase, providing a floor support for prices due to strong end-user fueling demand. It is expected that the 180CST fuel oil market will likely remain volatile at higher levels in the near term.