The multi-level integrated oil and gas market has successfully tested the waters - the energy sector has enhanced the influence of "Chinese prices"

In today's global geopolitical conflict and increasingly severe energy security situation, the coordination between the upstream and downstream of the industrial chain and the coupling development between the futures market have become more and more important
.

On June 21, Shanghai International Energy Trading Center (hereinafter referred to as Shanghai International Energy Trading Center), a subsidiary of Shanghai Futures Exchange, and Zhejiang International Oil and Gas Trading Center (Zhejiang Oil Center) jointly issued the "China Zhoushan Low Sulfur Fuel Oil Bonded Vessel Offer for Buyers"
.
A year ago, the two sides had jointly launched the "China Zhoushan Bonded Low Sulfur Fuel Tanker Oil Supply Quotation" (referred to as the INE Zhoushan Anchorage Oil Supply Price, that is, the seller's offer).

These two RMB-denominated ship fuel supply quotations will promote the formation of China's low-sulfur fuel oil futures price as the pricing benchmark, and build a pricing mechanism with regional influence in Zhoushan, the main distribution center of bonded ship fuel in China, to escort the steady operation of China's ship fuel supply industry chain, and also to enhance China's price influence in the energy field
.

The internationalization door of the futures market is opening wider and wider

Fuel oil is a kind of refined oil, also known as heavy oil, residual oil, mainly made of petroleum cracking residue oil and direct distillation residue oil, is the petroleum processing process, from the crude oil separation of gasoline, kerosene, diesel after the heavier residue
.
Among them, the fuel oil used for marine internal combustion engines is marine fuel oil
.

On June 22, 2020, following crude oil, iron ore, PTA, and No.
20 rubber futures, the fifth domestic specific variety of China's futures market to open to the outside world, low-sulfur fuel oil futures, was listed on the previous energy market and accepted the participation of overseas traders, which shows that the internationalization of China's futures market is opening wider and wider
.

Since the second anniversary of the listing, the industry structure of low-sulfur fuel oil futures participants has become more abundant, and the market has become more active
.
Yang Junze, executive director of Sinopec Fuel Oil Sales Co.
, Ltd.
, has a representative view, he believes that the listing of low-sulfur fuel oil futures has better played the role
of price "baton", market "ballast stone" and risk "isolation belt".
Mu Siwei, CEO of Furui Bo Group, believes that China's low-sulfur fuel oil futures have been recognized by the domestic and international markets, providing traders such as Furui Bo with a reliable channel
for combining futures and cash, price discovery and optimizing resources.
At present, Fu Rui Bo has successfully reached the "domestic delivery, overseas delivery" business pioneered by the previous period of energy, and has taken the lead in completing the supply contract denominated for the previous energy low-sulfur fuel oil contract with internationally renowned shipowners and ship fuel supply enterprises
.

It can be said that China's low-sulfur fuel oil futures are reshaping the low-sulfur fuel oil pricing mechanism in
the Asia-Pacific region.

At present, the global shipping industry is accelerating its transformation to green and sustainable development
.
Low sulfur fuel oil has become the mainstream variety
of the international marine fuel oil market.
In the Asia-Pacific region, marine fuel oil accounts for more than 45% of the market share, becoming the world's largest marine oil consumption market
.
Among them, Zhoushan, Zhejiang, China has a special status
.
In 2021, the fuel supply scale of bonded ships in Zhoushan, Zhejiang, China has exceeded 5.
52 million tons, ranking first in China and sixth largest bunkering port
in the world.

In the past two years, the global energy market has witnessed too much history, the spread of the epidemic, oil price shocks, economic setbacks, but China's ship supply market is vigorously developing against the trend, mainly because China's import and export trade is stable and improving
.
Yu Jiyou, president of the Fuel Oil Branch of Shanghai Petroleum Products Trade Industry Association, disclosed a set of data: in 2021, China's bonded ships refueled 20.
6 million tons, while the output of low-sulfur fuel oil reached 11 million tons, and domestic resources accounted for more than 50% of the delivery goods of low-sulfur fuel oil futures
.
From January to May this year, China's low-sulfur fuel oil quota was reduced by a total of 9.
75 million tons, an increase of 21.
9%
year-on-year.
On the demand side, the total supply of bonded ship fuel in China continues to maintain a stable momentum of development, which has attracted the attention of peers around the
world.

E Hongda, vice chairman of China Shipbuilding Fuel Co.
, Ltd.
, said that China has become the world's largest producer of low-sulfur ship-fuel, and China's shipbuilding and fuel supply enterprises urgently need a price benchmarking mechanism that reflects their own supply and demand, that is, the RMB is used as the ship-fuel pricing currency
.

In this context, the last period of energy and Zhejiang Oil Center cooperation, strengthen the "combination of futures and cash", promote the formation of low-sulfur fuel oil futures prices as the pricing benchmark, release China's Zhoushan low-sulfur fuel oil bonded ship quotations for buyers, and build a pricing system mechanism
with regional influence in Zhoushan.
This shows that China's low-sulfur fuel oil futures price on the spot market price guidance effect began to appear, to increase China's voice in the international energy market also has the significance of
first try.

"Zhoushan Price" continued to operate steadily

In June 2021, the "China Zhoushan Bonded Low Sulfur Fuel Tanker Oil Supply Quotation" was officially released, opening the RMB denomination
of the market.
This is the first RMB quotation mechanism
based on the price of the domestic futures market.
Zhejiang Free Trade Zone affectionately calls it "Zhoushan Price"
.

Chen Rong, chairman of Zhejiang Oil Center, said that the "Zhoushan Price" jointly released by Energy and Zhejiang International Oil and Gas Trading Center in the previous period provided a new path for enhancing China's price influence in the international energy market, and is an important practical achievement of Zhejiang International Oil and Gas Trading Center and Shanghai Futures Exchange to implement the national strategy of
Yangtze River Delta integration and Zhejiang Free Trade Zone construction.

Since its release, the "Zhoushan price" has continued to operate stably, and has been put to the market at 4 p.
m.
every trading day, and the correlation with important indicators such as the actual transaction price, the Platts Moss price, and the Platts Zhoushan refueling price has remained above 99%, which has been recognized by all walks of life, and the influence is gradually emerging
.
The number of participating enterprises has also increased from 3 to 5, namely Sinopec Fuel Oil, China Shipbuilding Fuel, PetroChina Fuel Oil, Seaport International Trade, Zhejiang Petroleum Fuel Oil, accounting for 84.
2% of Zhoushan's ship supply market, and the price authority has been improved
.

At present, about 1,000 tons to 2,000 tons of fuel oil per day are traded
through the INE Zhoushan anchorage oil supply price.
The industry is also encouraging ship-supplying enterprises to actively sign spot trade contracts
through this offer.

Now, China's Zhoushan low-sulfur fuel oil bonded ship for the buyer's offer has also been officially released
.
The "buyer's offer" is the RMB intention price of the international shipowner enterprise, the quotation form adopts "futures + liter discount", and the price benchmark is the INE low-sulfur fuel oil futures price, which is also released
at 4 pm every trading day.
The participants of the "buyer's offer" cover international shipping and transportation enterprises such as bulk commodities, dry bulk cargo, and
distant-water fisheries.
There are 7 international shipowners participating in the first batch of quotations, including the world's largest tanker enterprises in terms of transportation scale, as well as small and medium-sized transport enterprises; There are both domestic enterprises and international shipowners
from Singapore, Mauritius and other regions.
Chen Rong said that the release of the "buyer's offer" will help further improve the price formation mechanism in Zhoushan, enhance the authority of Zhoushan prices, and help enhance the international influence
of the bonded fuel oil market in the Zhejiang Free Trade Zone.

Pan Guangen, deputy director of the Zhejiang Provincial Financial Supervision and Administration Bureau, said that the release of the "Zhoushan Price" meets the general expectations of the domestic and international markets and shows strong price guidance significance
for spot enterprises.
At present, the construction of the integrated oil and gas trading market in the Yangtze River Delta period has achieved remarkable results in bonded commodity registration system, mutual recognition and intercommunication of warehouse receipts, pre-sale of production capacity and stable price orders, covering many fields such as warehouse receipts, trading model innovation, over-the-counter options, etc.
, effectively serving the national strategies
of Yangtze River Delta integration and the construction of the whole oil and gas industry chain in the Zhejiang Free Trade Zone.

The curtain has opened on the construction of the futures market

Futures are derived from the industry and also serve the industry
.

The futures market provides risk management tools for the real economy, especially in the case of the impact of the epidemic and the sharp fluctuations in the commodity market in recent years, China's futures market provides a reliable hedging tool for entity enterprises to manage price risks, helping enterprises to operate
steadily.
For the high-quality development of the futures market, a point of force is to overcome the "two skins" phenomenon that has appeared in history, guide the real industry to use futures prices as spot trade pricing benchmarks, and enhance the depth and breadth
of the futures market to serve the real economy.

China's petrochemical industry has ranked second in the world for 12 consecutive years, and the chemical industry has ranked first
in the world.
In 2021, the total amount of China's petrochemical industry will exceed 14 trillion yuan, and the total profit will jump to the trillion yuan platform, creating a new historical record; In the first four months of this year, petrochemical revenue was 5.
2 trillion yuan, an increase of 21.
2% year-on-year, and the profit was 485.
6 billion yuan, an increase of 23.
9% year-on-year, far exceeding the expectations at the beginning of the year and achieving a "good start"
.
Fu Xiangsheng, vice president of the China Petroleum and Chemical Industry Federation, said that China is entering an important stage from a petrochemical power to a petrochemical power, which is also a key period
for China to strive for the pricing power of petrochemical products and the right to speak in the market in the world.
At present, the continuous deepening of industrial integration has provided a foundation
for the construction of a unified national energy market.
In terms of accelerating the construction of the commodity futures market and improving the oil and gas product system, in the futures market, the steady operation and innovation and optimization of futures varieties such as crude oil, low-sulfur fuel oil, fuel oil, and petroleum asphalt, as well as the related derivatives and services combined with futures and cash, provide an important guarantee
for the production, operation and innovative development of China's petroleum enterprises.

The reporter learned that the relevant parties will continue to expand the futures price application scenarios, and strive to take the oil supply price of the INE Zhoushan anchorage as the benchmark, open up the upstream and downstream trade pricing chain of the shipping industry, and strive to build a spot trade platform
with regional influence with the oil supply price of the INE Zhoushan anchorage as the price benchmark as the early date.
At the same time, the quotation of INE ship oil supply anchorage will be extended to Qingdao and other designated delivery warehouse radiation areas in
a timely manner.

Li Hui, deputy general manager of the Institute in the previous period, said that the "14th Five-Year Plan" period is a critical period
for the transformation and upgrading of China's energy industry and the realization of high-quality development.
In the face of opportunities and challenges, the Institute will earnestly fulfill the "hub" responsibility of the country's important financial infrastructure, take market demand as the guide, refine all kinds of energy futures varieties, and continue to improve the breadth and depth
of serving the real economy.
At the same time, we will further improve the ecological system of energy and chemical products, accelerate the research and development and listing of more futures options varieties such as natural gas, naphtha, synthetic rubber, etc.
, closely follow the layout process of the clean ship fuel industry, and actively study the reserves
of clean energy products such as hydrogen and ammonia.