Japan Bonded Bunker Sales Grew Nearly 11% in May

by Ship & Bunker News Team
Tuesday July 19, 2016

According to information from Japan's Ministry of Economy, Trade and Industry (METI), bonded bunker sales in the country reached 2.348 million barrels during the month of May, up 10.7 percent compared to April and 65.6 percent year on year, reports Platts.

With May expected by many traders to have been the worst month of 2016 for sales volumes because of seemingly weak demand and local holidays, the month's results are said to have come as a surprise.

"Honestly, I had also thought May would be worse than April," said one Japan-based trader, adding that "one possibility could be that METI included domestic bond transfer sales volumes into the figures."

While bonded bunker fuel is intended to be sold only to ships traveling international routes, market sources say some trading companies have been buying the product for their domestic storage tanks, which may have contributed to the spike in May's sales volumes.

Stronger demand than expected, as well as competitive pricing compared to South Korea's own bonded fuel market, could have also led to the higher than expected results, say market sources.

However, data from Ship & Bunker shows prices between Busan and Tokyo were comparable during the month of May, with those in Tokyo slightly higher.

Meanwhile, with 80,676 barrels of bonded marine diesel oil shown to have been sold in May, Japan's sales volumes in that segment fell 12.1 percent in May compared to April, but were up 56.4 percent year on year.

It is further noted that Japan did not import any bonded bunker fuel oil during the month of May.

Last year, data released by METI indicated that Japan sold 1.418 million barrels of bonded bunker fuel in May 2015, a reduction of 10.7 percent from the previous month, and a 23.2 percent year on year decline.