SunSirs: China Domestic Ship Fuel Market continued to Rise in July

According to the Commodity Analysis System of SunSirs, as of July 31, the average price of domestic fuel oil 180CST was 5,146.00 RMB/ton, an overall increase of 5.19% compared to 4,892.00 RMB/ton at the beginning of the month.

On July 31, the fuel oil commodity index was 104.22, an increase of 0.6 points compared to yesterday, a decrease of 23.88% from the cycle's highest point of 136.91 points (2022-11-17), and an increase of 126.17% from the lowest point of 46.08 points on August 15, 2016. (Note: The cycle refers to the period from September 1st, 2011 to the present)

In July, the domestic fuel oil price of 180CST continued to rise, while the international crude oil market fluctuated and rose this month. The cost of domestic ship fuel blending remained strong, and there was strong bullish sentiment in the market. The ship fuel market continued to rise. According to SunSirs, as of July 31, the self extracting low sulfur quotation for fuel oil 180CST in the Ningbo area of China National Petroleum Corporation was 5,300 RMB/ton, and the self extracting low sulfur quotation for fuel oil 120CST was 5,350 RMB/ton; The quotation for 180 CST self extracting low sulfur fuel oil in the Shanghai region of China National Combustion Corporation is 5,130 RMB/ton, and the quotation for 120 CST self extracting low sulfur fuel oil is 5,230 RMB/ton.

The international crude oil market fluctuated and rose in July. On the one hand, the expectation of supply tightening continued to ferment. Saudi Arabia and Russia announced new production reduction measures. In addition, the US Shale oil production has been in a bottleneck. The tightening of crude oil supply has become a major positive for the international oil market. On the other hand, there is significant support during the peak summer oil consumption season, with North America experiencing a peak in summer oil consumption. In addition, with increasing demand from China, international oil market prices continue to rise. Finally, the Federal Reserve's interest rate hike is nearing its end. Multiple positive factors support the sustained rise of international oil prices.

Singapore's increased fuel inventory has limited support for fuel oil prices. It is reported that the Enterprise Development Authority (ESG) of Singapore: As of the week ending July 26th, the inventory of medium distillate oil in Singapore decreased by 632,000 barrels, reaching a low of 7.211 million barrels in nearly five months; Singapore's light distillate oil inventory increased by 1.34 million barrels to a three week high of 13.516 million barrels; Singapore's fuel oil inventory increased by 3.116 million barrels to a high of 20.923 million barrels in over a month.

The international crude oil market is on the rise, the cost of blending domestic ships and fuels is strong, and the supply of raw materials is relatively tight. The market is bullish, but terminal demand is limited. Due to the impact of typhoon weather, port refueling has been limited recently. At present, the low sulfur market price of fuel oil 180CST is around 5,100-5,300 RMB/ton, and the low sulfur market price of fuel oil 120CST is around 5,200-5,350 RMB/ton, which is a single negotiation. It is expected that the fuel oil 180CST market may steadily rise in the near future.

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