SunSirs: China Domestic Ship Fuel Market Continued to Decline in November

According to the Commodity Analysis System of SunSirs, as of November 29th, the average price of domestic fuel oil 180CST was 5,270.00 RMB/ton, a decrease of 1.83% from 5,368.00 RMB/ton on November 1st.

In November, the domestic fuel oil price of 180CST continued to decline in October, while the international crude oil market overall declined in November. After the decline in domestic blending costs, there was a rebound, and winter transportation costs increased. The strong domestic blending costs supported the domestic ship fuel market; In the shipping market, due to the impact of strong winds and cooling weather at ports, shipowners are restricted in transportation and freight rates have increased; At present, ship oil supply merchants are cautious in their operations, with light market transactions and mainly small orders in demand. According to SunSirs, as of November 29th, the self pickup low sulfur quotation for fuel oil in the Dalian area of CNOOC is 5,150 RMB/ton, and the self pickup low sulfur quotation for fuel oil in the Dalian area is 5,200 RMB/ton; The price for self extracting low sulfur fuel oil in the Shanghai area of CNOOC is 5,260 RMB/ton for 180CST, and 5,360 RMB/ton for self extracting low sulfur fuel oil of 120CST.

In November, the international crude oil price trend declined. As of the end of the month, the settlement price of the main WTI crude oil futures contract in the United States was $76.41 per barrel, and the settlement price of the main Brent crude oil futures contract was $81.47 per barrel. The November crude oil price fell by 5.69%. Firstly, the economic data is poor, and the news is bearish for the oil price market. There are still concerns about inflation levels in the United States, and the Federal Reserve has indicated that interest rates may continue to rise in the future. The US dollar is rising, putting pressure on prices of commodities such as crude oil and gold priced in US dollars; The multiple economic data released by the United States have made the market bearish about the future demand outlook, leading to a decrease in crude oil prices. Secondly, the supply tension caused by the situation in the Middle East has been alleviated, as the seasonal decrease in internal demand in the region has led to an increase in its export share; The peak oil season in North America and Europe has ended, and demand has declined, suppressing the crude oil market. Thirdly, the increase in US crude oil inventories exceeded expectations, coupled with market concerns about demand in the Asian region and negative factors, resulting in a decline in crude oil prices and a decline in the domestic fuel oil market.

In terms of international fuel oil, it is understood that the Singapore Enterprise Development Board (ESG): As of the week ending November 22, Singapore's medium distillate oil inventory decreased by 1,000 barrels to a two-week low of 10.422 million barrels; Singapore's light distillate oil inventory decreased by 1.707 million barrels to a one month low of 11.726 million barrels; Singapore's fuel inventory increased by 2.611 million barrels to a 9-week high of 2,012.2 million barrels.

The international crude oil market rebounded, and the strong domestic blending costs supported the domestic ship fuel market; In the shipping market, winter transportation costs have increased, and the impact of strong winds and cooling weather at ports has restricted shipping for shipowners, resulting in an increase in freight rates; At present, ship oil suppliers are cautious in their operations, with light market transactions and a focus on essential needs. 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 5,200-5,400 RMB/ton, which can be negotiated separately. It is expected that the fuel oil 180CST market will mainly consolidate in the near future.

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