China’s Bunker Sales Show How Congestion Is Reshaping Demand for Ship Fuel

By Bloomberg News (Bloomberg) —

Port congestion in China is prompting more vessels to refuel at the country’s ports as the worsening Covid-19 outbreak forces the reconfiguration of shipping routes. 

China supplied 4.9 million metric tons of bonded bunker fuel to ships in the first quarter of this year, 1.9% more than a year earlier, according to Tian Qiujin, an analyst at OilChem, which tracks the data. That compares with a 12% drop in bunker sales in Singapore — Asia’s biggest refueling hub.

As authorities in Shanghai continue to implement strict Covid-19 restrictions and Beijing begins mass testing for the virus, hundreds of ships carrying everything from bulk commodities to container boxes are waiting off the country’s east coast. The gridlock has ships burning fuel as they idle in the water, making them more likely to refuel in Guangzhou or Zhoushan instead of Singapore, said traders.

The Maritime and Port Authority of Singapore says ships aren’t avoiding its port to carry out major pit-stops for crew and fuel. However, unexpected congestion at global ports, along with skyrocketing crude oil prices, may have reduced the amount of fuel ships are purchasing in Singapore.

“When we ask our bunker suppliers, there hasn’t been any deliberate attempt by ships to skip Singapore,” said Quah Ley Hoon, chief executive officer of the authority, in an interview. “But if you were coming to Singapore only for bunker operations, and have idled 21 days in China, you may just decide to bunker in China.”

A total of 3,020 ships called at the city state for the purpose of refueling last month, 441 fewer than a year earlier, according to preliminary data released by the MPA.

–With assistance from Kyunghee Park.

© 2022 Bloomberg L.P.

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