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Shanghai port's marine fuel orders jump with blending system

en.lingang.gov.cn| Updated: Apr 9, 2024 L M S

Marine fuel suppliers in East China's Shanghai saw a big increase in March in orders from international ships wanting to refuel in Shanghai port.

The rise is said to be the result of a new system which allows the blending of different types of fuel, attracting ship owners to refuel there.

The fuel market is shifting to lower sulfur content, but costs are still high despite China's strong refining capabilities. Last year, the State Council, China's Cabinet, issued 80 measures for the Shanghai free trade zones.

Under them, companies in the Lin-gang Special Area in Shanghai are allowed to conduct bonded blending of high and low sulfur fuel oil through logistics processing – leveraging the price difference between the two oils to reduce costs.

At the Yangshan oil depot, different types of fuel are now being blended to produce blended oil with sulfur content below 0.5 percent. This process helps reduce costs for ship owners significantly.

"Through blending, the cost of low sulfur oil can be reduced by $8-12 per metric ton," said Cai Kai, a spokesman from Shanghai Chimbusco Marine Bunker Co Ltd.

"If you're talking about 5,000 tons of fuel oil for a container ship, each batch can save the shipowner about $50,000," Cai added.

Lin-gang is also focusing on green methanol as a new energy source, with various related companies moving there. The initiative aims to make the area competitive internationally and to capture opportunities in the industry.

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