BEIJING (Reuters) – China’s exports of clean marine fuels in 2021 rose 24% from a year ago as Chinese refiners expanded production capacity amid Beijing’s ambition to create a regional bunkering hub.
Exports of the very low-sulphur fuel oil (VLSFO), which has a maximum sulphur content of 0.5% to comply with emission rules set by the International Maritime Organization (IMO), reached 19.19 million tonnes, data from the General Administration of Customs showed on Thursday.
That compares to 15.47 million tonnes in 2020 when China started to comply with the IMO emission rules.
For December alone, China sold 1.3 million tonnes of the clean marine fuel, down from 1.75 million tonnes in November and was lower than 2.47 million tonnes in the same period in 2020.
Analysts from China-based consultancy JLC estimated that China’s bonded VLSFO output reached 11.08 million tonnes in 2021, up more than 42% from a year ago.
The production boom has helped narrow the price spread between clean marine fuel supplied in China’s Zhoushan and in Singapore, to an average of $17.83 per tonne in 2021 from $23.86 in 2020.
Earlier this month, Beijing granted 6.5 million tonnes of quotas for exporting low-sulphur fuel oil, up 30% from the 5 million tonnes released in the first batch of 2021, which would facilitate Chinese refiners to further ramp up output.
PetroChina last week said it will adjust fuel production from its underconstructed 400,000 barrels-per-day refinery in Jieyang to produce 2.6 million tonnes of clean marine fuel each year.
Chinese customs data on Thursday also showed that fuel oil imports reached 950,317 tonnes in December, with imports into bonded storage, which includes both high-sulphur and low-sulphur materials, were 425,983 tonnes.
The table shows China’s fuel oil imports and exports in metric tonnes. The exports section largely captures the VLSFO bunkering sales along its coast.
Exports Bonded storage trade y/y% change
January 1,652,766 101.6
February 1,366,305 84.4
March 1,683,581 57.5
April 1,896,919 33.3
May 1,553,512 37.3
June 1,659,687 31.2
July 1,767,820 50.5
August 1,594,042 -1.7
September 1,453,690 15.7
October 1,486,979 22.6
November 1,751,956 40
December 1,299,418 -47.4
Imports Ordinary Bonded storage Total y/y%
Trade change
January 87,147 680,956 768,103 -30.7
February 99,024 874,311 973,335 39.5
March 17,227 905,960 923,154 7.2
April 117,778 771,034 888,812 -17
May 278,554 781,135 1,059,944 -31.1
June 251,468 746,922 998,390 -34.4
July 637,738 732,006 1,369,744 121.5
August 656,269 1,208,604 1,864,873 37.7
September 515,165 611,495 1,126,660 57.4
October 653,915 400,562 1,054,478 76.3
November 443,550 1,217,475 1,660,975 60.1
December 524,334 425,983 950,317 -9.8
(Reporting by Muyu Xu and Chen Aizhu; Editing by Simon Cameron-Moore)
