SunSirs: China Domestic Ship Fuel Market rose first and then declined in August

According to the Commodity Analysis System of SunSirs, as of August 30th, the average price of domestic fuel oil 180CST was 5,230.00 RMB/ton, an overall increase of 1.63% compared to 5,146.00 RMB/ton on August 1st.

On August 29th, the fuel oil commodity index was 106.73, unchanged from yesterday, a decrease of 22.04% from the cycle's highest point of 136.91 points (2022-11-17), and an increase of 131.62% 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 August, the price of domestic fuel oil 180CST rose first and then fell. In the first half of the month, the cost of mixing domestic ship fuel and gasoline was strong, and the market was bullish. The ship fuel market continued to rise; In the second half of the month, the prices of mixed raw materials for domestic ship fuel have declined, and the overall market prices for ship fuel have declined. In the supply market, freight rates have continued to be low, and shipowners are cautious in purchasing, with a strong wait-and-see sentiment. In the immediate need for refueling, small orders are the main focus. According to Business News, as of August 30th, the self extracting low sulfur quotation for 180CST of fuel oil in the Ningbo area of China National Combustion Corporation is 5,250 RMB/ton, and the self extracting low sulfur quotation for 120CST of fuel oil is 5,300 RMB/ton; The quotation for 180CST self extracting low sulfur fuel oil in the Shanghai region of China National Combustion Corporation is 5,200 RMB/ton, and the quotation for 120CST self extracting low sulfur fuel oil is 5,300 RMB/ton.

In August, crude oil emerged from a trend of rising and falling, and in the first half of the year, the market continued to rise amidst supply concerns and the positive trend of the peak oil consumption season. Brent crude oil topped $87 per barrel, while WTI crude oil approached $83, reaching a nearly 9-month high. Afterwards, with the deterioration of macro data, the market turned sharply downwards, and near the end of the month, the WTI fell below $80. Under the combined effect of OPEC+ production control and weak economic data in oil producing countries, the supply-demand game intensifies, and the market shifts into a narrow range of fluctuations.

Singapore's fuel inventory has increased. It is reported that the Enterprise Development Authority (ESG) of Singapore has increased its medium distillate inventory by 1.118 million barrels to 8.635 million barrels in the week ending August 23; Singapore's light distillate inventory decreased by 133,000 barrels to 12.766 million barrels; Singapore's fuel oil inventory increased by 2.018 million barrels to 22.099 million barrels.

The international crude oil market is fluctuating, and the prices of domestic ship fuel blended raw materials are declining. The overall price of ship fuel market is declining; In the shipping market, freight rates continue to be sluggish, with more ships and less cargo at the port. Shipowners are cautious in purchasing and have a strong wait-and-see attitude, with small orders being the main focus when it comes to refueling. At present, the low sulfur market price of fuel oil 180CST is around 5,200-5,300 RMB/ton, and the low sulfur market price of fuel oil 120CST is around 5,300-5,400 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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