Thursday, October 6, 2022
China challenges Singapore’s longstanding dominance as Asia’s marine fuel supplier in S$40.1...

China challenges Singapore’s longstanding dominance as Asia’s marine fuel supplier in S$40.1 billion market

China’s bunkering business is said to be closely catching up with that of Singapore. And China’s 2021 marine fuel sales are predicted to increase to 20 million tons, or forty per cent of Singapore’s total.

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Singapore — Singapore has long enjoyed being the top supplier of marine fuel in Asia, but this may change due to moves from China.

The world’s second-biggest economy is now able to attract more vessels after having built more refining facilities and ports.

In the past five years, China’s sales of marine fuels have nearly doubled, according to a Jul 21 Bloomberg report. The economic giant is pinning its hopes that ships en route to countries such as Japan and Korea will come to its shores.

And while China’s sales of marine fuels have grown at a fast pace, Singapore is still number one in Asia in an industry that commands more than US$30 billion (S$40.1 billion).

The Bloomberg report quotes the director at Drewry Maritime Advisor, Jayendu Krishna, as saying, “Singapore has had an edge over other Asian ports on all parameters. It continues to be so today, however, slowly other ports have been trying to catch up.

Zhoushan will certainly capture a share of the vessels from other northeast Asian ports.”

Zhoushan is the city in Shanghai where much of the expansion of China’s marine fuel industry has taken place. Bloomberg added that the Chinese government has spent US$80 million (nearly S$110 million) on increasing the anchorage capacity and growing the shipping channels in the city.

Ten more marine fuel companies were recently given licences to operate in Zhousan.

Last year, Singapore sold 50 million tons of marine fuel was sold in Singapore, while China sold 16.9 million tons, the fifth year in a row that its marine fuel sales have grown. 

A woman who used to work with the customs authority in Zhoushan said, “China’s bunkering business is closely catching up with that of Singapore,” and predicted that China’s 2021 marine fuel sales will increase to 20 million tons or forty per cent of Singapore’s total.

But Bloomberg pointed out that geographically speaking, Singapore has the upper hand, being located in the middle of a trade route to Europe, the Middle East and the U.S. Gulf Coast that spans centuries, and also has plans for automation. The country possesses extensive refining and storage to meet the demands of shipping vessels, and industry observers say it should not be knocked off from its pole position any time soon. 

The vice president of energy consulting at IHS Markit, Victor Shum, is quoted as saying, “The regional bunker fuel pie is big enough to support growth for key ports, but Singapore will remain the main bunkering hub in the foreseeable future.”

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/TISG

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