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China aims to launch low-sulfur bunker fuel oil futures in 2019

July 09/2019

MOSCOW (MRC) -- China aims to launch a bonded low-sulfur bunker fuel oil contract that will allow foreign investors to participate in trading by the end of 2019, reported Reuters with reference to the Shanghai Futures Exchange's (ShFE) statement.

A 0.5 percent sulfur content cap in shipping fuel set by the International Maritime Organisation (IMO) comes into effect in 2020.

"The contract will help expand Chinas pricing influence in global bunker fuel oil market and help China to improve its maritime transportation capacity," ShFe Chairman Jiang Yan said in a statement.

"Bunker fuel markets will see bigger opportunities and challenges in 2020. China may reverse the current situation of fully relying on imports on high-sulfur bunker fuel oil and become the worlds biggest low-sulfur heavy bunker fuel oil supply center," Jiang said.

China National Petroleum Corporation (CNPC) has planned a low-sulfur fuel oil supply of 4 million tonnes a year, a senior company executive said. The first batch of the fuel was dispatched from its Dalian Petrochemical plant in early June.

Sinopec Group, another Chinese oil giant, said last year it would start supplying IMO 2020 standard bunker fuel in 2019 and all of its supplies would meet IMO 2020 standard by Jan. 1.

The low-sulfur fuel oil contract would be Chinas second bonded oil futures followed by crude oil futures on the Shanghai International Energy Exchange (INE), a ShFE subsidiary.

INE has recorded 103 million lots of trade in crude oil contracts since its launch in March 2018 till the end of June this year.


mrcplast.com
Author:Margaret Volkova
Tags:crude and gaz condensate, CNPC, Sinopec, China.
Category:General News
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