China’s Marine Fuel Market in May Experiences Volatile Downward Trends

May 31 news

According to the commodity analysis system, the marine fuel market in East China showed a fluctuating downward trend in May. As of May 31, the average price of Chinese fuel oil 180CST was 6025.00 CNY/ton, down 1.43% from 6112.50 CNY/ton on May 1.

In May, the price of 180CST fuel oil in China fluctuated and declined: In early May, the volatile downward trend of the international crude oil market provided limited support to the Chinese marine fuel market. Additionally, the decline in the prices of blending components for Chinese marine fuel led to a downturn in the Chinese marine fuel market. In mid-May, the prices of blending components in China increased, and compliance checks on the wholesale segment of marine fuels were carried out in multiple regions, leading to a tight supply of taxed resources, which caused the Chinese marine fuel market to rise. In late May, the prices of blending components for marine fuel in China declined again, with insufficient cost support, resulting in a drop in the Chinese marine fuel market. It is understood that as of May 31, the self-pickup low-sulfur 180cst fuel oil was quoted at 5700-6300 CNY/ton, and the self-pickup low-sulfur 120cst fuel oil was quoted at 5800-6400 CNY/ton.

In May, international crude oil prices showed a downward trend, primarily driven by the rapid shift from the previous geopolitical conflict premium to a combination of easing negotiation expectations and negative fundamental factors. Under the combined influence of four key factors—the signals of resumed U.S.-Iran talks, the partial resumption of shipping through the Strait of Hormuz, the IEA’s downward revision of supply-and-demand forecasts, and the sharp increase in API inventories—earlier risk premiums in oil prices have largely dissipated, leading to a downward trend in crude oil prices. Coupled with weak global demand and concerns that escalating geopolitical tensions could weigh on the economy and oil consumption, the crude oil market has experienced a significant decline.

On the international fuel oil front, 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 20.703 million barrels; light distillate inventories declined by 260,000 barrels to 14.618 million barrels; and middle distillate inventories decreased by 62,000 barrels to 8.964 million barrels. Affected by the continued decline in Russian high-sulfur fuel oil exports, coupled with geopolitical disruptions in the Middle East and concentrated refinery maintenance, the international high-sulfur fuel oil market is experiencing a phase of relatively tight supply.

Market Forecast: Currently, international crude oil prices are experiencing volatile downward trends, and the Chinese marine fuel market is adopting a more wait-and-see attitude. Wholesale inspections are 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 support to prices by underpinning end-user fueling demand. It is expected that the 180CST fuel oil market will likely remain volatile at higher levels in the near term.