August 31 news
According to the commodity analysis system, the marine fuel market in East China showed a trend of first declining and then rising in August, with an overall upward trend. As of August 31, the average price of 180CST fuel oil in China was 6,425 CNY per ton, an increase of 2.59% from 6,262.50 CNY per ton on August 1.
In August, the price trend of 180CST fuel oil in China first declined and then rose: In early August, the decline in international crude oil prices negatively impacted the Chinese marine fuel market. Additionally, the poor performance of coastal freight rates and the significant impact of typhoon weather on the eastern coastal regions led to shipowners mainly purchasing fuel out of necessity, causing a downturn in the Chinese marine fuel market. In mid to late August, there was a tight supply of blending raw materials for marine fuel in China, leading to continuous price increases, which supported the marine fuel market, and the marine fuel market continued to rise. It is understood that as of August 31, the self-pickup low-sulfur 180cst fuel oil was quoted at 6100-6500 CNY/ton, and the self-pickup low-sulfur 120cst fuel oil was quoted at 6200-6600 CNY/ton.
In August, international crude oil prices experienced significant fluctuations. At the beginning of the month, geopolitical risk premiums in the Middle East temporarily subsided, causing oil prices to fall rapidly. However, in the middle and upper part of the month, oil prices rebounded sharply. This was due to the official expiration of the 60-day memorandum of understanding between the U.S. and Iran, yet neither side expressed any intention to renew it. Negotiations completely collapsed amid deep-seated disagreements over control of the Strait of Hormuz, dashing earlier market expectations of an easing of tensions. In the later stages of the price adjustment period, as geopolitical factors eased somewhat, crude oil prices saw a slight decline. Overall, however, crude oil prices continued to trend upward.
Regarding international fuel oil, according to Singapore’s Enterprise Singapore (ESG): As of the week ending August 26, Singapore’s fuel oil inventories rose by 8.17 million barrels to reach 19.24 million barrels; light distillate inventories increased by 5.39 million barrels to 11.515 million barrels; and middle distillate inventories rose by 1.53 million barrels to 8.427 million barrels.
Market Forecast: Currently, the marine fuel market is being driven by two key factors—the cost support and a relatively tight supply—resulting in firm market prices. In the ship supply market, coastal shipping demand remains weak, and trading activity in the marine fuel supply market is subdued. However, supported by the tight spot supply, ship supply prices are likely to remain at high levels. We expect the 180CST fuel oil market to see a slight upward trend in the near term.
