China Bonded Bunker Sales Reached 7.23 Million Tons in H1, 2020
According to GACC, China’s fuel oil export volume totaled 5.3618 million mt in the first five months of this year, up 30.03% from the same period of last year. Supported by China’s reforms in the bonded bunker market, Chinese refineries began to produce low sulfur bunker stably, and the spread between Chinese bunker prices and Singaporean bunker prices narrowed obviously. In addition, Chinese ports’ throughput and service quality improved further. Under the background of coronavirus outbreak, China’s bonded bunker supply was stable in the first half of this year, and the bonded bunker sales had great growth from the same period of last year.
In history, China’s bonded bunker sales was 9-12 million mt per year. The low bonded bunker sales didn’t match China’s large cargo throughput at ports. Among the global top ten ports in terms of port throughput, there are eight of them in China, such as Ningbo-Zhoushan, Shanghai, Shenzhen, Guangzhou, Hong Kong and Qingdao. And in particular, Ningbo-Zhoushan Port ranked first in the globe for several consecutive years. Chinese coastal ports’ cargo throughput is around six times of the Singaporean ports’ throughput. But China’s bonded bunker sales is only one fourth of Singapore’s bonded bunker sales. In the past years, the bonded bunker prices at Chinese ports were much higher than the prices in Singapore, because most of China’s bonded bunker was imported from Singapore. Meanwhile, Chinese ports’ bunkering service efficiency was lower. Therefore, it was hard for China’s bonded bunker sales to increase a lot in the past years.
Zhoushan is the main open sea gateway to the world on the eastern coast of China and the Yangtze River. Six of the seven international main routes of China pass through the Zhoushan sea area. Each year, more than 100,000 international sailing vessels pass through the Zhoushan sea area, which is an ideal area to develop bunker supply business.
On June 30, 2011, the State Council officially approved the establishment of Zhoushan Archipelago New Area in Zhejiang, as China’s 4th national new area. After years of development, Zhoushan has become an important port-centered industry base, port logistics base, marine tourism base and marine fishery base in China. On April 1, 2017, the State Council approved the establishment of the China (Zhejiang) Pilot Free Trade Zone, clearly proposing that “building a Northeast Asia Bunker Supply Center” and giving many reform and innovation privileges.
At present, the Zhoushan Municipal People’s Government is the only institution in China that has the authority to approve the bunker business qualifications for international navigation ships. In recent years, the Zhoushan Municipal Government has effectively boosted the development of Zhoushan bunker supply business by improving facilities construction, reducing bunker supply costs, improving service efficiency, standardizing operation and management, and strengthening cooperation between governments and enterprises.
In 2019, the bonded bunker sales volume at Zhoushan Port was 4.1 million mt, covering 37% of the national total. In the first half of 2020, the bonder bunker sales volume at Zhoushan Port was around 2 million mt, up 6.72% from the same period of last year, and the proportion slipped to 28%. This means the bonded bunker sales in Zhoushan covered a smaller proportion of the national total in the first half of this year. Because of the coronavirus outbreak, Zhoushan Customs had strict supervisions, and charterers and ship-owners needed to make a balance between fuel prices and chartering fees. Therefore, the number of vessels berthing at Zhoushan Port went down in the first half of this year.
