According to the SunSirs Commodity Analysis System, prices in the domestic ship fuel market—specifically in the East China region—experienced a significant decline during April. As of April 30, the average price for domestic 180CST fuel oil stood at 6,112.50 RMB/ton, representing a 7.56% drop from the price of 6,612.00 RMB/ton recorded on April 1.
Prices for domestic 180CST fuel oil fell sharply throughout April. During the first half of the month, a volatile downward trend in the international crude oil market provided limited support to the domestic ship fuel sector. This lack of external support was compounded by declining prices for domestic ship fuel blending feedstocks, sluggish demand across the mid- and downstream sectors, and generally weak purchasing interest; with no signs of improvement in end-user demand, shipowners remained cautious regarding fuel replenishment. However, toward the end of April, a substantial surge in international crude oil prices bolstered the domestic ship fuel market, triggering an upward trend in prices. According to SunSirs data, as of April 30, the ex-tank quotation for low-sulfur 180CST fuel oil ranged from 5,800 to 6,300 RMB/ton, while the ex-tank quotation for low-sulfur 120CST fuel oil ranged from 5,900 to 6,400 RMB/ton.
International crude oil prices experienced a volatile upward trend throughout April. During the first half of the month, crude oil prices retreated as market sentiment shifted rapidly: the previous "geopolitical conflict premium" gave way to expectations of diplomatic de-escalation and a confluence of bearish fundamental factors. Driven by a quadruple combination of signals regarding renewed US-Iran negotiations, the partial resumption of shipping traffic through the Strait of Hormuz, the IEA's downward revision of supply-demand forecasts, and a massive surge in API crude oil inventories, the risk premium that had previously propped up oil prices dissipated rapidly, resulting in a downward trend in the crude oil market. Furthermore, concerns that intensifying geopolitical conflicts could drag down the global economy and dampen oil consumption contributed to the market's significant decline. However, in the latter half of April, as negotiations stalled, the crude oil market reversed course and began to rebound. Regarding the international fuel oil market, data from Enterprise Singapore (ESG) indicates that for the week ending April 22, Singapore's fuel oil inventories declined by 1.164 million barrels to reach 22.501 million barrels; light distillate inventories fell by 1.086 million barrels to 16.916 million barrels; while middle distillate inventories rose by 450,000 barrels to 10.722 million barrels.
Market Outlook: The prospects for U.S.-Iran negotiations in May remain unclear, and uncertainties persist regarding the situation in the Strait of Hormuz. Coupled with the approaching peak summer season for crude oil demand, international oil prices are likely to experience wide-ranging volatility. Should geopolitical tensions escalate once again, oil prices could rebound, thereby providing some degree of support for ship fuel prices. As May marks the beginning of the traditional peak season for shipping, maritime activity is expected to increase, and the underlying demand for ship fuel may experience a cyclical recovery. Consequently, it is projected that in May, the market for 180 CST fuel oil—driven by cost support and a resurgence in demand—will likely end its recent downward trend and enter a phase of volatile consolidation.
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