China's state-owned bunker fuel supplier Chimbusco plans to start offering low sulfur fuel oil at the Qinhuangdao and Jingtang ports from April, after Beijing imposed a 0.5% sulfur limit from January 1 for vessels sailing within 12 nautical miles from its coastline, a company source said this week.

 

This also comes ahead of the International Maritime Organization's global sulfur content cap in marine fuels at 0.5% from January 1, 2020, down from 3.5% currently.

Chimbusco had already started supplying LSFO bunker fuel at the Shanghai Yangshan port last year, and at the Dalian, Changjiang River, Ningbo-Zhoushan and Tianjin ports from January this year.

 

All of Chimbusco's LSFO supply is imported, with small quantities flowing in from Singapore, Malaysia and the Middle East, and stored in tanks at Yangshan, eastern China, the company source said.

 

Currently, 10,000-20,000 mt/month of LSFO is supplied by Chimbusco from the central storage at Yangshan to the Chinese bunker market, the source added.

 

Premiums of LSFO have been rising in Asia with traders starting to stockpile LSFO components ahead of the IMO 2020 regulation. FOB Singapore Marine Fuel 0.5% was assessed at a premium of $54/mt to Mean of Platts Singapore 380 CST HSFO assessments, both on Wednesday and Tuesday -- the highest since S&P Global Platts began publishing the assessment January 2.

 

State-owned Sinopec and Chimbusco dominate the Chinese bunker fuel market with a combined market share of 90%.

 

Chimbusco is a 50:50 joint venture between COSCO Group, China's largest shipping company, and PetroChina.

 

Source:S&P Global Platts

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