SunSirs: China Domestic Ship Fuel Market Fluctuated and Rose in August

According to the commodity analysis system of SunSirs, the domestic ship fuel market in East China fluctuated and rose in August. As of September 1st, the average price of 180CST domestic fuel oil was 5,387.50 RMB/ton, an increase of 1.41% from 5,312.50 RMB/ton on August 1st.

The overall upward trend in the domestic fuel oil price of 180CST in August: In the first half of August, the international crude oil market fluctuated and fell, which was unfavorable for the domestic ship fuel market. The decline in the price of domestic ship fuel blended raw materials limited the cost support for the domestic ship fuel market, and the domestic ship fuel market fell; In late August, the international crude oil market fluctuated and rose, which was favorable for the domestic ship fuel market. The price of domestic ship fuel blended raw materials rose slightly, supporting the domestic ship fuel market. The domestic ship fuel market stopped falling and rebounded. The continuous decline in freight rates in the downstream shipping market has been negative for the ship and fuel market, with suppliers mainly consuming inventory and limited support for terminal demand. Shipowners are cautious in their operations, with small orders being mainly driven by urgent needs. According to SunSirs, as of September 1st, the self extracted low sulfur quotation for 180CST fuel oil in Dalian area of China National Fuel Oil Corporation is 5,520 RMB/ton, and the self extracted low sulfur quotation for 120CST fuel oil is 5,620 RMB/ton; The self extracted low sulfur quotation for 180CST fuel oil in the Shanghai area of China National Fuel Oil Corporation is 5,200 RMB/ton, and the self extracted low sulfur quotation for 120CST fuel oil is 5,300 RMB/ton.

Since August, international crude oil prices have weakened, and the monthly average price has been decreasing for two consecutive months. The main negative factors for the decline in oil prices in August are the firm stance of OPEC+ on increasing production, which has created a negative atmosphere, and the United States' push for Russia Ukraine peace talks, which has significantly eased the geopolitical situation.

In terms of international fuel oil, it is reported that the Singapore Enterprise Development Board (ESG): as of the week ending August 27th, Singapore's fuel oil inventory increased by 1.689 million barrels to a 3-week high of 24.724 million barrels; The inventory of medium distillate oil decreased by 366,000 barrels to a two-week low of 9.331 million barrels; The inventory of light distillate oil decreased by 1.669 million barrels to a 3-week low of 13.485 million barrels.

The recent decline in the international crude oil market has increased the wait-and-see sentiment in the domestic ship fuel market; The supply market and shipping market have seen consecutive declines in freight rates, which have negatively impacted the ship and fuel market. The main demand for transactions is due to necessity, and market operations are cautious with a strong wait-and-see sentiment. As of September 1st, the self extracted low sulfur quotation for 180CST fuel oil is 5,200-5,500 RMB/ton, and the self extracted low sulfur quotation for 120CST fuel oil is 5,300-5,600 RMB/ton. It is expected that the fuel oil 180CST market will mainly consolidate in the near future.

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