In Zhoushan, a steady build-up is underway to snatch the US$30 billion global marine fuel market from Singapore’s grip

Singapore is facing the greatest competition yet to its status as the dominant marine fuel supplier in Asia, with China luring more ships to its shores following a rapid expansion of its port and refining facilities.

China’s marine fuel sales – known in the industry as bunkering – have almost doubled over the past five years and the nation is banking on attracting ships that travel to nearby ports in major economies such as South Korea and Japan. Singapore still has a commanding position as the top supplier to a sector valued at over US$30 billion in Asia, but Chinese growth is accelerating.

The epicentre of China’s bunkering is Zhoushan, an archipelago to the south of Shanghai on the east coast. Some of the nation’s newest and biggest crude oil refineries are being built in the area, while the government has introduced tax incentives that make Chinese fuels more competitive.

“Singapore has had an edge over other Asian ports on all parameters,” said Jayendu Krishna, director at Drewry Maritime Advisors. “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 north east Asian ports.”

Singapore – also the world’s biggest ship refuelling hub – sold about 50 million tons of bunker fuels last year, or a fifth of the global total. Industry consultant OilChem estimates China’s sales rose for a fifth straight year to 16.9 million tons. SeaCred, a marine intelligence agency, valued the Asian bunker fuel market at US$31 billion to US$32 billion in 2020.