Bunker oil Prices, markets & analysis
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Bunker oil Overview Transcript
Bunker oil includes bunker fuel oil and bunker gasoil. Over 85% of bunker oil consumption is bunker fuel oil. Fuel oil is also called heavy oil and comes from the refinery CDU or FCC units. It can also be a mixture of oil and other chemicals
Fuel oil is used in bunkering, power plants, glass industry and chemical fibre plants. It is also used as feedstock for deeper refining.
Gasoil is a light distillate mostly used for cars and industrial plants and a small part is used in China’s bunker market.
China is one of the biggest fuel oil consumers and importers of fuel oil in the global market but the volume is reducing due to demand slumps.
China’s bunker fuel oil market is though a booming market and this is due to steadily importing cargo exporting and importing and a gradually opening market.
The market is set to increase by 20% yearly in the next five years.
The internal trade bunker market is a stable, growing market also set to rise.
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Bunker oil: Market overview
China’s bunker market saw a strong trend in the last quarter of 2013. The average 380CST bunker fuel oil price rose to $649/tonne in the fourth quarter of 2013, up by 2.5% quarter on quarter.
Bunker fuel prices rose sharply in the fourth quarter of 2013, because supply became short. Demand in October was better than expected and caused supply shortages in November. Supply tightened further after a pipeline explosion in Qingdao city in late November and bunker refuelling was suspended for over a week. The overhaul of refineries in Qingdao following the accident also resulted in delayed bunker fuel supply.
With 2013 seeing a lacklustre final quarter, the traditional peak season, ICIS C1 estimates the total sales volume of mainland China will be 10.8 million tonnes in 2013, down by 6% year on year.
Looking forward, there may be changes in demand in the first quarter of 2014. Stimulated by procurement before Spring Festival, demand may increase in January, and fall in February after the long vacation, but then March could see demand pick up again.
Updated to mid-January 2014
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Bunker oil news & analysis
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About Bunker oil
Bunker oils are technically any type of fuel used aboard ships, including marine fuels and marine distillate fuels.
Marine fuel oils are used to drive the main engine of large ships. They are black sticky residue left by crude oil distillation and usually distinguished by kinematic viscosity. 380cSt and 180cSt fuel oils are more common in all grades of marine fuel oil.
Marine distillate fuels are used by, for example, fishing boats, generators on large vessels and some engineering ships. Marine Gas Oils (MGO) and Marine Diesel Oils (MDO) are the most popular grade of marine distillate fuels.
Bunker oils are stored in tanks and delivered by bunker barges.
Bonded bunker oils refer to fuel which is exempt from tax and can only be sold to vessels plying international routes.