The Chinese Port of Zhoushan aspires to challenge Singapore’s dominance in the shipping fuel industry. The Port wants to leverage the 2020 sulphur cap and it will rely on the fact that it is close with big ports, as well as on China’s assist to help it achieve its goals.
Namely, according to Reuters, the ports around Zhoushan reach 3.6 million tonnes of marine fuels annually, which is less than a tenth of 50.6 million tonnes record of shipping or bunker fuel Singapore sold in 2017, being the top international shipping centre.
Yet, Zhoushan was ranked as the fourth global container traffic in 2016 by the World Shipping Council and it’s placed 150 km from the Shanghai, the world’s biggest container port. Also, it sits ‘a day’s voyage’ from other ports, including those of Ningbo and Nanjing.
In addition, in 2017 Ningbo-Zhoushan port saw an annual cargo throughput of 1 billion tonnes, becoming the first one globally to reach this volume.
Zhousha, as stated by Reuters, aspires to reach the fuelling business stated above and many are those who expect the port to become a challenge for Singapore. The latter, handled about 630 million tonnes of cargo in 2017, with a 2.8 billion tonnes of vessel arrivals.
[smlsubform prepend=”GET THE SAFETY4SEA IN YOUR INBOX!” showname=false emailtxt=”” emailholder=”Enter your email address” showsubmit=true submittxt=”Submit” jsthanks=false thankyou=”Thank you for subscribing to our mailing list”]
According to Zhang Haichao, chairman and general manager of Sinopec Corp unit Sinopec Sales Co, by 2030 Zhoushan’s bunkering volumes are to increase to 30 million tonnes a year. Moreover, there are plenty of fuel producers, including the 400,000 barrels-per-day Zhejiang Petrochemical Corp aimed to be launched at the end of 2018.
Zhoushan is able to attract oil and LNG tankers, dry-bulk carriers bringing raw materials from Australia, and container ships heading to the U.S. West Coast.
Also, the port will take advantage of the 2020 sulphur cap regulations, concerning the decrease to 0.5% of shipping fuels from 2020. As a result, Singapore will import fuels from China and Middle East, along with the three major refineries, Royal Dutch Shell (RDSa.AS), Exxon Mobil (XOM.N) and the joint-venture Singapore Refining Company, it’s already importing fuels from.
Yet, Sinopec, Asia’s major oil refiner, placed its global fuel centre to Zhoushan in May, to prepare for IMO’s regulations. Vitol, a global oil merchant has also placed its trade office in Zhoushan.
What’s more, Zhoushan’s success depends on factors as cost and efficiency of its fuelling infrastructure where Singapore is unrivalled. Zhoushan has under its operation 11 licensed bunker suppliers, including Sinopec and Chimbusco, and independents such as Herun Group and Zhoushan Seaport Group. They are competing more than 50 outfits in Singapore.
Yet, a vessel can refuel approximately for six hours in Singapore, whereas in Shouzan it takes longer due to bureaucracy. Vessels take bunkers in Singapore because of its efficiency, transparency and strict standards.
Concluding, Zhoushan was announced as a free trade zone in 2017 and was the first Chinese city allowed to grant marine fuel licences. On October 2018 it launched a new import regulation on marine blending fuels aiming to serve a variety of shippers’ needs. Zhoushan has asked the Ministry of Finance for a waiver on a consumption tax on bunker sales, and a rebate on value-added taxes for locally produced marine fuels.
