SunSirs: China Domestic Ship Fuel Market Fluctuated in December

According to the commodity analysis system of SunSirs, the domestic ship fuel market in East China fluctuated in December. As of December 29th, the average price of domestic fuel oil at 180CST was 5,350 RMB/ton, which remained stable compared to 5,350.00 RMB/ton on December 1st.

The domestic fuel oil price of 180CST fluctuated in December: in early December, the domestic ship fuel blending raw material prices rose narrowly, but the terminal coastal bulk cargo freight rates fell, and ship owners mainly needed small orders for refueling, resulting in a slight decline in ship oil prices; In the middle of the month, the domestic market for ship fuel blended raw materials was weak, and the cost support for ship fuel was limited. However, in recent times, the tight tax invoices in the ship fuel market have boosted the market and led to an upward trend in the ship fuel market; The rise in international crude oil prices in the latter half of the year boosted the domestic ship fuel market, but the prices of blended raw materials were weak, and the inventory of duty paid finished products by wholesalers was low, resulting in mixed price fluctuations in the ship fuel market. According to SunSirs, as of December 29th, the self extracted low sulfur quotation for 180CST fuel oil in Dalian area of China National Fuel Oil Corporation is 5,300 RMB/ton, and the self extracted low sulfur quotation for 120CST fuel oil is 5,400 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.

The international crude oil market fluctuated and declined in December: at the beginning of the month, OPEC+ oil producing countries postponed production increases, and coupled with the slim possibility of reaching a geopolitical peace agreement, geopolitical factors led to an upward trend in crude oil prices; In the first half of the year, the regional situation eased slightly, the geopolitical risk premium subsided, and coupled with the weakening of US demand, the US tariff issue dragged down the global economy and demand expectations, leading to a decline in the international oil price market trend; The tense atmosphere of the US Venezuela situation continued in the latter half of the year, and the instability of the Russia Ukraine situation increased, making it difficult to dispel concerns about potential supply risks and leading to an increase in international oil prices; At the end of the month, Ukrainian and American leaders will hold new talks, easing geopolitical tensions and causing a decline in international oil prices.

In terms of international fuel oil, it is reported that the Singapore Enterprise Development Board (ESG) stated that as of the week ending December 24th, Singapore's inventory of residual fuel oil, including fuel oil and low sulfur waxy residue, increased by 1.058 million barrels to a two-week high of 25.716 million barrels. During the week, the inventory of light distillate oil, including naphtha, gasoline, and reformate, decreased by 366,000 barrels to a three week low of 14.69 million barrels. That week, the inventory of medium distillate oil decreased by 400,000 barrels, reaching a four week low of 8.031 million barrels.

In the near future, the domestic ship fuel blended raw materials have been weak, which has limited support for the domestic ship fuel market. In addition, the fluctuation of the crude oil market has increased the market's wait-and-see sentiment; Shipowners urgently need small orders for refueling, coastal bulk cargo prices are low, and terminal market demand is weak. At present, the self extracted low sulfur quotation for 180CST fuel oil is 5,100-5,500 RMB/ton, and the self extracted low sulfur quotation for 120CST fuel oil is 5,200-5,600 RMB/ton. It is expected that the fuel oil 180CST market will experience weak consolidation in the near future.

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