SunSirs: China Domestic Ship Fuel Market Fluctuations and Consolidation in November

According to the commodity analysis system of SunSirs, the domestic ship fuel market fluctuated and consolidated in November, with a slight overall decline. As of December 3rd, the average price of domestic fuel oil at 180CST was 5,396.00 RMB/ton, a decrease of 0.44% from 5,420.00 RMB/ton on November 1st.

In November, the domestic fuel oil price of 180CST fluctuated mainly, and the rise in crude oil prices in the first half of the year boosted the domestic ship fuel market. The prices of blended raw materials increased, and the ship fuel oil market rose; In the middle of the month, the crude oil market fell, and there was a strong wait-and-see attitude in the ship fuel market. Shipowners mainly purchased small orders according to demand, and ship fuel prices fluctuated and fell; In the latter half of the year, the prices of ship fuel raw materials remained strong, supporting the ship fuel market. However, due to the impact of winter, terminal demand was light, and ship refueling efforts were weak, resulting in an overall consolidation of the ship fuel market. According to Business News Agency, as of December 3rd, the self pickup low sulfur quotation for 180CST fuel oil in Dalian area of China National Chemical Corporation is 5,600 RMB/ton, and the self pickup low sulfur quotation for 120CST fuel oil is 5,700 RMB/ton; The self extracted low sulfur quotation for 180CST fuel oil in the Shanghai area of China National Fuel Oil Corporation is 5,280 RMB/ton, and the self extracted low sulfur quotation for 120CST fuel oil is 5,380 RMB/ton.

The international oil price market was mainly volatile in November, with a significant increase in crude oil market prices at the beginning of the month and a gradual decline in crude oil prices in the later period. Overall, the crude oil market remained relatively stable. On the one hand, the unstable geopolitical situation in the Middle East remains one of the important factors affecting the crude oil market. On the other hand, crude oil supply remains tight, and OPEC's production reduction plan of 2.2 million barrels per day has been extended until the end of December, indicating continued supply constraints. However, the outlook for crude oil demand is not optimistic, which is suppressing the crude oil market price. Overall, the crude oil market price is mainly fluctuating widely.

In terms of international fuel oil, it is reported that the Singapore Enterprise Development Board (ESG): as of the week ending November 27th, Singapore's fuel oil inventory increased by 2.25 million barrels, reaching a five week high of 19.232 million barrels; The inventory of medium distillate oil increased by 97,000 barrels, reaching the highest level of 10.37 million barrels in seven weeks; The inventory of light distillate oil decreased by 1.82 million barrels, reaching a four week low of 13.344 million barrels.

Market forecast: In the near future, the domestic ship fuel raw materials will rise, and the increase in blending costs will support the domestic ship fuel market; In the shipping market, terminal demand is weak, and freight rates have slightly fallen. Shipowners are cautious in pursuing higher prices and mainly adopt a wait-and-see approach. At present, the self extracted low sulfur quotation for 180CST fuel oil is 5,200-5,400 RMB/ton, and the self extracted low sulfur quotation for 120CST fuel oil is 5,300-5,500 RMB/ton, subject to negotiation. It is expected that the fuel oil 180CST market will experience a slight increase in the near future.

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