In August, China’s bunker fuel market experienced a notable increase in sales and supply, driven by a combination of recovering domestic demand, improved weather conditions, and a rebound in refinery output. The market saw growth in both bonded and domestic trade sectors.
Bonded Bunker Fuel Sales & Imports
China’s bonded bunker fuel sales increased in August, reaching 1.77 million metric tons. This 4.07% month-on-month rise was fueled by more active shipping exports and a return to better weather after a period of poor conditions in East and South China.
In July, there was a significant rally in bonded bunker fuel imports, which jumped by 17.95% month-on-month to 643,200 metric tons. This was largely due to a rise in demand for bonded high-sulfur fuel oil (HSFO). The top suppliers were Malaysia, Singapore, and Russia.
Domestic-Trade Market
Domestic demand for bunker fuel recovered in August, spurred by the end of the fishing moratorium and increased restocking by shipowners. Heavy bunker fuel demand grew by 9.09% to 360,000 metric tons, while light bunker fuel demand rose by 10.71% to 155,000 metric tons. This demand recovery, coupled with increased availability of low-sulfur residual oil and shale oil, led to an increase in domestic trade supply.
Low-Sulfur Fuel Oil (LSFO) Production
China’s LSFO output rebounded in August, increasing by 7.84% from the previous month to 1.10 million metric tons. This was primarily a result of less refinery maintenance. While Sinopec and PetroChina saw increases in their LSFO output due to a resumption of production and boosted operations, CNOOC’s production remained largely stable.
Despite the monthly rebound, China’s LSFO output was down 4.76% compared to the same period last year. Additionally, some major refiners, including Sinopec and PetroChina, have been switching quotas from LSFO exports to cleaner oil products like gasoline, diesel, and jet fuel. Conversely, CNOOC has reportedly transferred quotas from clean oil products to LSFO.
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Source: Manifold Times
