CHINA DATA: H1 fuel oil exports fall 7% YoY to 9.09m tonnes


China’s fuel oil exports from January to June fell 7.3% year-on-year to 9.09 million tonnes (318,982 bpd), under pressure from a surge in domestically produced barrels in the ambitious plans to expand its bunkering industry, data from the General Administration of Customs showed in July. 22.

About 5.88 million tonnes of exports in the first six months were barrels produced domestically, instead of barrels re-exported from other origins, reflecting a 16.5% increase in year-on-year releases on the other, according to S&P Global Commodity Insights estimates based on GAC data.

All barrels exported in the first half of 2022 were reported under the bonded warehouse trade route, suggesting they were exported for bonded bunkering at Chinese ports.

With Beijing’s latest allocation of 2.5 million tons of bonded low sulfur fuel oil export quotas issued earlier in July, the first three tranches of quotas issued since 2022 totaled 12.25 million tons. , up 11.4% from the same lots a year earlier, S&P Global reported earlier. .

Encouraged by higher quotas, Chinese refineries increased LSFO production to an all-time high of 1.31 million in June, up 10.6% on the month and 38.1% on the year, increasing January-June production volumes by 44.3% on the year to 7.12. million tonnes, according to local news provider JLC.

Import volumes categorized under the general trade route, which involves raw material inputs for domestic refineries, jumped 137.2% year-on-year to 2.01 million tonnes in the first half of 2022.

China’s net fuel oil exports jumped 56% month-on-month to 581,059 tonnes, while fuel oil imports, both bonded and through general trade routes, fell 19.8% to 827 678 tonnes in June, according to GAC data.

Bad weather dims Zhoushan’s demand outlook
Disruptive weather conditions have slowed the pace of bunker sales since July, although LSFO’s gradual increase in inventory has eased concerns among local bunker suppliers after facing a supply shortage from April to early June , according to traders based in China.

At least one of the state-owned oil majors that failed to meet June bunker sales targets reportedly increased LSFO production levels in hopes of pushing July bunker sales, so High bunker prices at the North Asian bunker center in Zhoushan dampened demand in June, traders said. .

January-June bonded bunker sales at Zhoushan Port rose 11.6% year-on-year to around 2.76 million tonnes, while volumes sold in June fell 25.7% year-on-year. the month to reach 401,900 tonnes, according to sources familiar with the matter.

“The LSFO supply situation in China is now quite balanced against demand,” said a Zhoushan-based trader.

Bunker premiums at 0.5% S marine fuel delivered by Platts Zhoushan against benchmark freight valuations FOB Singapore Marine Fuel 0.5% S dropped to $98.02/mt on average July 1-21 , down from $101.32/m in June, according to data from S&P Global.

“The weather situation in July, such as the swell, delayed the loading and bunkering operations at the ex-wharf,” a Zhoushan-based bunker supplier said on July 22.

Forecasts of high winds, heavy swells and thunderstorms in the Ningbo-Zhoushan port area and lower demand are expected to weigh on LSFO bunker premiums, local bunker suppliers said.

These days, the spot market is quieter than in June due to bad weather,” said a second Zhoushan-based bunker supplier.

Since July, the Ningbo-Zhoushan port area has experienced rough sea conditions and strong gales that exceeded a scale of 9, according to recent reports from the Zhoushan Marine Station Meteorological Service.

FUEL IMPORTS, EXPORTS AND PRODUCTION IN CHINA (‘000 MT)
Jan-Jun 22
Jan-Jun 21
YEAR
Imports
5227
5610
-6.82%
Exports
9092
9808
-7.29%
LSFO National Production
7,121
4,935
44.29%
FUEL IMPORTS, EXPORTS AND PRODUCTION IN CHINA (‘000 MT)
Jun-22
May-22
MOM
June 21st
YEAR
Imports
828
1032
-19.80%
998
-17.09%
Exports
1409
1405
0.30%
1661
-15.17%
LSFO National Production
1,313
1,188
10.55%
951
38.07%
Source: Platts

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