China’s Very Low Sulphur Fuel Oil (VLSFO) production faced a significant drop in April, influenced by various operational factors. Despite a year-on-year increase, recent month-on-month figures highlight a decline due to ongoing maintenance activities and logistical challenges.
Reduced Production and Supply Constraints
China’s daily average VLSFO output fell by about 9% month-on-month in April, reaching 41,033 mt, as refiners intensified seasonal maintenance work, according to JLC. This reduction, along with limited barge availability, has tightened the supply for bunkering in Zhoushan, prompting suppliers to recommend lead times of 5-7 days. Nevertheless, the Chinese government’s allocation of 4 million mt of VLSFO export quotas for bonded bunkering is expected to support production growth later this year. Despite the monthly decline, VLSFO output saw a 16% increase year-on-year in April.
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Source: ENGINE
