Bunker fuel demand at China’s Shanghai and Zhoushan ports is expected to be boosted over May-June by disruptions at Qingdao port due to a summit, market sources in China said Monday.
Qingdao, in eastern Shandong province, is reportedly hosting the annual Shanghai Cooperation Organization summit in June. The event is expected to be attended by officials from several countries and bunkering restrictions will likely be imposed at Qingdao port for safety and security reasons, traders said.
“There’s a big event going on in Qingdao in June, so bunkering operations will be affected from May 20 and [the disruption] will last one month,” a trader said Monday.
Several industry sources said Qingdao and nearby ports will have restrictions imposed from May 20. “There will be lifting suspensions from oil terminals and bunker deliveries will also be affected,” a source said.
Market participants said Monday that China’s port authorities have indicated that from May 20 to the end of the month, oil terminals at Qingdao can load cargo and bunker fuel only from 6 am to 5 pm local time (2200 GMT to 0900 GMT) and must suspend all bunkering operations from 7 pm to 6 am. The restrictions will tighten over June 1-20, when cargo loadings at oil terminals will be halted, while bunkering will be suspended at Qingdao and Huangdao ports. In addition, container vessels cannot take delivery of bunker fuel over May 20-June 20.
A circular from Huatai Insurance, a marine services company that provides regular updates on China’s shipping industry on its website, says “special safety inspections” have been implemented for vessels entering Qingdao waters for two months from April 20.
A source said Monday that while bunkering at Qingdao was currently continuing as normal, the impact might be felt in the coming days.
“Due to this event, I think Shanghai and Zhoushan will benefit as bunkering volumes from Qingdao will shift over,” another source said Friday, adding some demand might even move further afield, such as to South Korea.
Traders in China estimate bunkering volumes at Qingdao are typically around 100,000-150,000 mt/month.
Source: Platts