Changeful China Bunker Market in 2020
From Q1 to Q3, 2020, impacted by the COVID-19 issue, the meltdown of international crude oil prices, the recession of global economic development and the implementation of IMO 2020, China’s marine fuel oil prices first surged and then slumped, and after that, the prices continued fluctuating.
Sepcifically, China’s marine fuel oil prices increased significantly in H2 January. With the implementation of IMO 2020, the supply of bonded marine fuel oil became tight, and the supply of marine fuel oil for domestic trade became short gradually as well. Accordingly, the dealing prices of marine fuel oil for domestic trade once reached RMB 4,983/mt, up RMB 563/mt or 12.74% from the beginning of 2020 and up 11.98% Y-O-Y. Moreover, some participants adopted a bullish attitude toward the future marine fuel oil market, supporting the increase in marine fuel oil prices. However, from the end of January to April, with the breakout of COVID-19, China’s demand for marine fuel oil dropped sharply. Meanwhile, the meltdown of the international crude oil prices deeply suppressed the market atmosphere. As a consequence, the market prices of marine fuel oil for domestic trade once declined to RMB 3,267/mt, down 29.24% Y-O-Y.
From April to May, China’s marine fuel oil prices stayed largely stable. From June, with the rise in international crude oil prices and the revival of demand, China’s marine fuel oil prices gradually grew to around RMB 3,400-3,500/mt. After that, the marine fuel oil market became stagnant, because of sluggish shipping demand and the low fuel-blending feedstock prices. September was the traditional marine fuel oil demand peak season. However, the overall demand did not revive significantly, and the prices of marine fuel oil even dropped to some extent as the prices of residual oil slumped. Up to September 27, the prices of marine fuel oil were around RMB 3,300-3,450/mt.
