Fuel Oil Futures First "Zero Deal" Triggers Fear in the Industry
The eight futures contracts of the Shanghai Futures Exchange fuel oil futures were not traded. This is the first “zero-transaction incident†since the fuel oil futures was listed on August 25, 2004, which has caused investors’ interest in the recently overlooked fuel oil market.
The zero transaction of fuel oil futures trading was mainly due to the shrinking of the spot market for fuel oil and the changes in the market demand for the four major fuel consumer terminals—the power industry, the oil refining industry, the ceramic industry, and the ship supply industry. The main delivery standard of the previous period was close to the standard of boiler fuel oil and was suitable for power, ceramics and Other industries. Due to the high international crude oil prices, the power and ceramics industries have been unable to bear the rapid rise in fuel costs. Since 2005, large-scale power plants and ceramics factories have begun replacing their fuel plants. Most of them have used alternative fuels such as coal and natural gas. By 2011, more than 90% of power plants and 95% of ceramics factories had already given up their use of boiler fuel oil, and the main areas of fuel oil consumption were shipbuilding.
The apparent consumption of fuel oil has been declining in the past four years, reaching 43.44 million tons in 2007, 36.64 million tons in 2008, 34 million tons in 2009, and 31.27 million tons in 2010. This year's fuel oil consumption is still shrinking.
It is against this background that starting from February of this year, the fuel oil futures trading target has also shifted to the ship's fuel oil standard in due course. Although the size of the ship’s fuel oil market has been steadily increasing in recent years, due to the weaker-than-expected economic recovery and the lack of demand from the physical industry, since the end of 2011, the trade volume of the ship’s fuel oil market has also declined. In particular, in the last two months, international oil prices have continued to increase. Diving, the ship's oil supply market price fell to a low level, and the spot market turnover was extremely dismal; most businesses temporarily fell into a wait-and-see mood and had few operations.
According to analysis by industry experts, from the overall situation, the two markets of fuel oil futures will enter a rest state in the short term. With the expansion of the supply of spot-ships and the improvement of the macro environment in the later period, the performance of the fuel oil market in the later period can still be expected; As a global shipping power and a large shipbuilding country, the prospects for the development of the ship's oil supply market are worth looking forward to in the long run.
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