SunSirs: Weak Terminal Demand in June, China Domestic Fuel Oil 180CST Continues to Fall

According to the Commodity Analysis System of SunSirs, as of June 29th, the average price of domestic fuel oil 180CST was 4,892.00 RMB/ton, a decrease of 4.60% compared to 5,128.00 RMB/ton at the beginning of the month.

On June 29th, the fuel oil commodity index was 99.08, a decrease of 0.4 points from yesterday, a decrease of 27.63% from the cycle's highest point of 136.91 points (2022-11-17), and an increase of 115.02% from the lowest point of 46.08 points on August 15th, 2016. (Note: The cycle refers to the period from September 1st, 2011 to the present)

In June, the domestic fuel oil price of 180CST continued to decline. This month, the international crude oil market was volatile, and the wait-and-see sentiment in the ship fuel market was strong. The terminal demand in the ship supply market was weak, the replenishment capacity was limited, and the trading volume was poor. The ship fuel market continued to decline. According to SunSirs, as of June 29th, the self extracting low sulfur quotation for fuel oil 180CST in Zhoushan area of China National Combustion Corporation was 4,800 RMB/ton, and the self extracting low sulfur quotation for fuel oil 120CST was 4,900 RMB/ton; The quotation for 180CST self extracting low sulfur fuel oil in the Shanghai region of China National Combustion Corporation is 4,900 RMB/ton, and the quotation for 120CST self extracting low sulfur fuel oil is 5,000 RMB/ton.

In June, the international crude oil market was volatile. On the one hand, based on the global economic situation, the Federal Reserve announced that interest rate hikes have not yet ended and will not cut rates. Macroeconomic pressure has increased, putting pressure on the oil market. On the other hand, OPEC+has announced two production cuts, coupled with the increase in China's refining and processing volume, which has boosted international oil prices. The demand during the summer oil peak season has supported, and the international oil price market has been boosted.

Singapore's increased fuel inventory has limited support for fuel oil prices. It is understood that the Enterprise Development Authority (ESG) of Singapore: As of the week ending June 27th, Singapore's fuel inventory increased by 1.859 million barrels, reaching a two-week high of 20.394 million barrels. Singapore's medium distillate oil inventory increased by 248,000 barrels, reaching a two week high of 7.98 million barrels. Singapore's light distillate oil inventory decreased by 105,000 barrels to a nearly six-month low of 14.626 million barrels.

At present, the domestic ship fuel market is weak, with average terminal demand and limited replenishment capacity. Freight rates continue to be low, and market transactions mainly require small orders. The market has a strong wait-and-see sentiment. At present, the low sulfur market price of fuel oil 180CST is around 4,800-5,000 RMB/ton, and the low sulfur market price of fuel oil 120CST is around 4,900-5,100 RMB/ton, which is a single negotiation. It is expected that the fuel oil 180CST market will be dominated by weak consolidation in the near future.

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