Negative import margins of Russian M100 fuel oil (medium-sulfur 180CST fuel oil) have worsened notably in Shandong in the past two weeks, because of price gains in Singapore, C1 observed.
Based on related prices on Jul 21, the theoretical import margins settled at minus Yuan 371/mt, versus minus Yuan 126/mt on Jul 5, C1's assessment showed.
The CFR price of M100 fuel oil rose by 4.6% or US$32/mt to US$731.88/mt in the two weeks, following the rise in international crude.
Meanwhile, spot prices in Shandong lacked upward momentum, as demand from independent refineries shrank notably amid bearish oil product market and continuous refining losses, C1 learned from market players. The spot price of M100 fuel oil was stable at Yuan 6,200/mt in Shandong, the assessment indicated.
"In view of current product prices, we are willing to pay Yuan 5,800/mt for M100 fuel oil, but quotes are much higher," said source with an independent refinery in Dongying city, Shandong.
The import margins are not likely to improve in the near future, since spot prices in Shandong lack upward momentum amid weak demand from refineries.
