SunSirs: China Domestic Ship Fuel Market is Expected to Rise in Mid January 2025

According to the commodity analysis system of SunSirs, the domestic fuel oil 180CST market rose in January. As of January 20th, the average price of domestic fuel oil 180CST was 5,606.00 RMB/ton (including tax), an increase of 2.64% from the price of 5,462.00 RMB/ton on January 11th.

According to Business News, the rise in international crude oil prices in mid January supported the domestic ship fuel market, and the prices of ship fuel blended raw materials increased. Currently, the downstream shipping market has limited oil replenishment by ship owners, and the main reason for replenishment is the urgent need for transactions. As of January 20th, the self pickup low sulfur quotation for 180cst of fuel oil and 120cst of fuel oil in the Dalian area of China National Nuclear Corporation is 5,850 RMB/ton and 5,950 RMB/ton, respectively; The self extracted low sulfur quotation for 180cst fuel oil in the Shanghai area is 5,700 RMB/ton, and the self extracted low sulfur quotation for 120cst fuel oil is 5,800 RMB/ton.

In mid January, crude oil prices first rose and then fell. The OPEC+ production reduction agreement was extended until the end of the first quarter, and some oil producing countries still had compensatory production cuts. The United States increased sanctions on Russia, and there were strong concerns about supply shortages. The positive support from the crude oil supply side led to a significant increase in crude oil market prices; The easing of the Palestinian Israeli situation weakens potential supply risks, and the United States will increase crude oil production and replenish strategic reserves, causing a decline in crude oil market prices.

In terms of international fuel oil, the Singapore Enterprise Development Board (ESG) reported that as of the week ending January 15th, Singapore's fuel oil inventories decreased by 359,000 barrels, reaching a 5-week low of 20.745 million barrels; The inventory of medium distillate oil increased by 477,000 barrels, reaching a 3-week high of 9.148 million barrels; The inventory of light distillate oil decreased by 556,000 barrels, reaching a 4-week low of 14.866 million barrels.

Market forecast: The recent international crude oil market downturn is bearish on the domestic ship fuel market; The supply market for ships is mainly driven by the urgent needs of shipping terminals, with low transaction volume and ship owners gradually stopping and anchoring their ships. At present, the self extracted low sulfur quotation for 180cst fuel oil is 5,400-5,800 RMB/ton, and the self extracted low sulfur quotation for 120cst fuel oil is 5,500-5,900 RMB/ton. It is expected that the fuel oil 180CST market will experience weak consolidation in the near future.

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