Due to the continuous impact of high oil prices, many land-based end-users have switched to coal tar or natural gas, leading to a decline in demand for boiler fuel oil in the Shanghai market year after year. CST Energy's Siwang Energy estimates that the consumption of such fuel oil in Shanghai in 2008 is expected to be only 200,000 to 250 thousand tons, which is a significant reduction of approximately 47% compared with the average level of 400,000 to 450,000 tons in 2006-2007.
According to a Shanghai trader, Shanghai's two important end-users, Shanghai Chunye Iron and Steel Co., Ltd. and Shanghai Heavy Machinery Plant, have already or will soon switch to coal tar or natural gas. Among them, Shanghai Chunye Iron and Steel Co., Ltd. has been converted to coal tar before the boiler conversion. After the original 2,000 tons per month of the domestic demand for low-sulfur 250 fuel oil instantly disappeared. In addition, the Minhang Heavy Machinery Plant is also about to complete the transformation of the boiler, and it will be converted to natural gas by the end of 2008 at the latest. As a result, the original 3,000 tons/month domestic 250 fuel oil demand will also disappear.
“Now in Shanghai, there are only five or so end users of fuel oil for onshore boilers that use more than 1,000 tons of fuel oil every month. In 2006-2007, this number was at least 15.†said traders. , "More end-users of large-scale fuel oil gradually withdraw from the market"
In addition, this has led to a year-on-year decline in the volume of trade of major suppliers in Shanghai. “Before, as the two largest fuel oil suppliers in Shanghai, Shanghai Fuel Oil Company and Shanghai Sinopec had two monthly fuel oil supplies of at least 20,000 tons and 10,000 tons, but now they are only about 7,000-10,000 tons and about 5,000 tons. ,†said one person from Shanghai Sinopec.
A private trader in Shanghai revealed that the fuel oil business with onshore boiler users has become increasingly difficult to do. The "cake" is gradually shrinking. Traders are fighting for price in order to survive, so as to maintain market share, but most of them are facing losses. .
Industry sources pointed out that under the increasingly stringent environmental protection policies of the government, the decline in the demand for boiler fuel oil is a general trend. High oil prices only play a "catalyst" role, stimulating faster development of this trend. Industry insiders expect that traders will have to look to the more promising marine fuel oil market in the future.
According to a Shanghai trader, Shanghai's two important end-users, Shanghai Chunye Iron and Steel Co., Ltd. and Shanghai Heavy Machinery Plant, have already or will soon switch to coal tar or natural gas. Among them, Shanghai Chunye Iron and Steel Co., Ltd. has been converted to coal tar before the boiler conversion. After the original 2,000 tons per month of the domestic demand for low-sulfur 250 fuel oil instantly disappeared. In addition, the Minhang Heavy Machinery Plant is also about to complete the transformation of the boiler, and it will be converted to natural gas by the end of 2008 at the latest. As a result, the original 3,000 tons/month domestic 250 fuel oil demand will also disappear.
“Now in Shanghai, there are only five or so end users of fuel oil for onshore boilers that use more than 1,000 tons of fuel oil every month. In 2006-2007, this number was at least 15.†said traders. , "More end-users of large-scale fuel oil gradually withdraw from the market"
In addition, this has led to a year-on-year decline in the volume of trade of major suppliers in Shanghai. “Before, as the two largest fuel oil suppliers in Shanghai, Shanghai Fuel Oil Company and Shanghai Sinopec had two monthly fuel oil supplies of at least 20,000 tons and 10,000 tons, but now they are only about 7,000-10,000 tons and about 5,000 tons. ,†said one person from Shanghai Sinopec.
A private trader in Shanghai revealed that the fuel oil business with onshore boiler users has become increasingly difficult to do. The "cake" is gradually shrinking. Traders are fighting for price in order to survive, so as to maintain market share, but most of them are facing losses. .
Industry sources pointed out that under the increasingly stringent environmental protection policies of the government, the decline in the demand for boiler fuel oil is a general trend. High oil prices only play a "catalyst" role, stimulating faster development of this trend. Industry insiders expect that traders will have to look to the more promising marine fuel oil market in the future.
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