Sinopec strenuously forged ahead in China bonded bunker market this year. As of this October, Sinopec has set up four bonded bunker supply business locations in the country, and just opened business in its fifth business location, Tianjin municipality.
Sinopec has been actively preparing for expanding marine bunkering business to the whole country since the Ministry of Commerce lifted the territory restriction for bonded bunker suppliers in last April.
Sinopec Zhoushan branch, the exclusive bunker operator of the Sinopec Corporation, started bonded bunker gasoil business in May, 2008, and then bonded 380CST and 180CST fuel oil business later.
Sinopec Zhoushan kicked off bonded bunkering business in Ningbo this April and started the business in Shanghai two months later. In late July, Sinopec Zhoushan began supplying bonded bunker in Jiangyin city along the Yangtze River. So far, Sinopec Zhoushan had finished establishing business points along both Yangtze River and the coast.
Sinopec aims to grab two-thirds of China bonded bunker market share before 2013 and achieved 1-mil mt of bonded bunker sales in 2010, a source with Sinopec Zhoushan told . In order to achieve the goal, Sinopec Zhoushan plans to set up 24 chain business operation points in the country in 2010 and add 40 more in 2011. Guangzhou, Xiamen, Qingdao etc. will likely be the next targets of the company.
Fiercer competition
Shanghai bonded bunker market sees huge competition in recent months, as all five bonded bunker suppliers opened business in the municipality. According to market sources, it was Sinopec that triggered the low price war. Sinopec was criticized for supplying bonded bunker fuel at a price US$10/mt lower than its competitors. Sinopec s low price war was very effective in expanding market share in a short period. Many bunker suppliers said their sales were impacted by Sinopec. A major bunker supplier said its bonded bunker sales decreased about 50%.
Tianjin becomes another target market for major bonded bunker players. Sinopec just set foot in Tianjin, SinoBunker already set up a business point in Tianjin and is soon to start bonded bunker supply business. China ChangJiang Bunker (Sinopec) Co Ltd also plans to enter into Tianjin market in the near future. Tianjin bonded bunker market is estimated to see a price war in the future, by then Chimbusco, China s dominant bunker supplier, will face a large competition.
China bonded bunker market recorded a total sales of about 6.88-mil mt in 2009. If referring to 2009 s data, Sinopec wants to achieve 1-mil mt of sales target in 2010, accounting for 14.5% of the market share. This means Sinopec will climb to the third largest bonded bunker supplier in the country from current fifth position, also the lowest rank among the five qualified bonded bunker players.
This kind of price war will directly lower the overall price level of bonded bunker in China, and will also attract more bunker demands from neighboring markets.
Other players attitude
As for the low price strategy adopted by Sinopec, other players said they didn t know when the price war would end, but they would manage to deal with it.
We pay great attention to Sinopec as a rival, but our sales volume was ahead of others and we have many irreplaceable advantages, so it s hard for Sinopec to outrun us in a short run. Our bunker resources are all imported resources, the import cost is high, so the price war only deepened our loses , a major bonded bunker supplier said.
Other players said their bonded bunker prices were certainly affected and margins would be squeezed in the competition, but enterprises are not likely to sell bunker fuels under deficit for the long run.
China s bonded bunker players are expected to manage to retain their own advantages at first and then expand their market shares. It s foreseeable that a cut-throat competition among Chinese bonded bunker players is unavoidable, and China bonded bunker market will see a new round of reshuffle.
Sinopec has been actively preparing for expanding marine bunkering business to the whole country since the Ministry of Commerce lifted the territory restriction for bonded bunker suppliers in last April.
Sinopec Zhoushan branch, the exclusive bunker operator of the Sinopec Corporation, started bonded bunker gasoil business in May, 2008, and then bonded 380CST and 180CST fuel oil business later.
Sinopec Zhoushan kicked off bonded bunkering business in Ningbo this April and started the business in Shanghai two months later. In late July, Sinopec Zhoushan began supplying bonded bunker in Jiangyin city along the Yangtze River. So far, Sinopec Zhoushan had finished establishing business points along both Yangtze River and the coast.
Sinopec aims to grab two-thirds of China bonded bunker market share before 2013 and achieved 1-mil mt of bonded bunker sales in 2010, a source with Sinopec Zhoushan told . In order to achieve the goal, Sinopec Zhoushan plans to set up 24 chain business operation points in the country in 2010 and add 40 more in 2011. Guangzhou, Xiamen, Qingdao etc. will likely be the next targets of the company.
Fiercer competition
Shanghai bonded bunker market sees huge competition in recent months, as all five bonded bunker suppliers opened business in the municipality. According to market sources, it was Sinopec that triggered the low price war. Sinopec was criticized for supplying bonded bunker fuel at a price US$10/mt lower than its competitors. Sinopec s low price war was very effective in expanding market share in a short period. Many bunker suppliers said their sales were impacted by Sinopec. A major bunker supplier said its bonded bunker sales decreased about 50%.
Tianjin becomes another target market for major bonded bunker players. Sinopec just set foot in Tianjin, SinoBunker already set up a business point in Tianjin and is soon to start bonded bunker supply business. China ChangJiang Bunker (Sinopec) Co Ltd also plans to enter into Tianjin market in the near future. Tianjin bonded bunker market is estimated to see a price war in the future, by then Chimbusco, China s dominant bunker supplier, will face a large competition.
China bonded bunker market recorded a total sales of about 6.88-mil mt in 2009. If referring to 2009 s data, Sinopec wants to achieve 1-mil mt of sales target in 2010, accounting for 14.5% of the market share. This means Sinopec will climb to the third largest bonded bunker supplier in the country from current fifth position, also the lowest rank among the five qualified bonded bunker players.
This kind of price war will directly lower the overall price level of bonded bunker in China, and will also attract more bunker demands from neighboring markets.
Other players attitude
As for the low price strategy adopted by Sinopec, other players said they didn t know when the price war would end, but they would manage to deal with it.
We pay great attention to Sinopec as a rival, but our sales volume was ahead of others and we have many irreplaceable advantages, so it s hard for Sinopec to outrun us in a short run. Our bunker resources are all imported resources, the import cost is high, so the price war only deepened our loses , a major bonded bunker supplier said.
Other players said their bonded bunker prices were certainly affected and margins would be squeezed in the competition, but enterprises are not likely to sell bunker fuels under deficit for the long run.
China s bonded bunker players are expected to manage to retain their own advantages at first and then expand their market shares. It s foreseeable that a cut-throat competition among Chinese bonded bunker players is unavoidable, and China bonded bunker market will see a new round of reshuffle.
