China’s March marine fuel exports slide on COVID curbs
China’s exports of marine fuel in March plunged 15% from a year ago, customs data showed on Wednesday, hit by high prices and COVID-19curbs at domestic ports.
March shipments were 1.42 million tonnes, data from the General Administration of Customs showed. Most of this was very low-sulphur fuel oil (VLSFO), with a maximum sulphur content of 0.5%, to meet the emission rules of the International Maritime Organisation.
The volume was up from 1.31 million tonnes in February but was lower than 1.68 million tonnes in March 2021.
Exports of marine fuel in the first quarter of 2022 reached 5.06 million tonnes, up 7.7% from a year before.
Average VLSFO prices at China’s bunker hub Zhoushan port were $886 a tonne in March, compared to $829 a tonne in Singapore, making Chinese fuel less competitive than its Asian rival.
Wednesday’s customs data also showed that 975,892 tonnes of fuel oil, including both high-sulphur and low-sulphur products, were brought into bonded storage in March, up 4% on the year.
Analysts from China-based consultancy Longzhong estimated bonded VLSFO consumption at 4.32 million tonnes in the first quarter of 2022, up 2.8% from a year ago but down 8.7% from the fourth quarter of 2021.
Beijing’s stringent COVID-19curbs have forced shipping firms to cancel calls at Chinese ports, and deterred international vessels from refuelling there, to avoid the severe port congestion brought by disruptions of cargo handling.
But analysts expect consumption of marine fuel to increase in the April-June period, though the COVID-19 measures will still crimp demand in April.
Longzhong forecasts China’s VLSFO exports to hit about 4.8 million tonnes in the second quarter, with refiners continuing to crank up output to about 3.5 million tonnes.
China issued a first batch of 2022 quotas for exports of 6.5 million tonnes of VLSFO, up 30% from the 5 million released in the corresponding 2021 allotment.
Sinopec’s 600028.SS Zhongke refinery started 1 million tonnes a year of VLSFO production capacity in February and exported its first cargo of 17,000 tonnes in March.
Source: Reuters (Reporting by Muyu Xu and Chen Aizhu; Editing by Simon Cameron-Moore and Clarence Fernandez)