In May, China recorded its lowest fuel oil imports for the year, with significant declines reported in both imports and bunker exports, based on customs data released on Friday. The total fuel oil imports reached 1.30 million metric tons, equivalent to approximately 267,000 barrels per day (bpd). This figure represents a sharp decrease of 29% from April and a staggering 40% decline compared to the same month last year. Industry sources attribute these lower import figures to several factors, including increased import costs, suppressed refining margins, and diminished demand for feedstock from refineries, particularly during the maintenance season.
Notably, cracks for high-sulphur fuel oil in Asia reached record highs in May, ultimately making it more costly than crude oil. In addition to the drop in imports, China’s exports of low-sulphur marine fuels also took a hit, totaling 1.24 million tons. This marked a 30% decline from April and a 26% reduction compared to May of the previous year. Although there was a temporary easing of the tariff conflict that resulted in a slight rise in container bookings from China to the U.S. in May, industry professionals observed little improvement in refuelling demand.
A Chinese bunker executive remarked that the overall economic climate had not drastically changed, indicating that there would not be a significant uptick in demand for fuel oil in the near future. The import and export data primarily pertain to low-sulphur oil-bunkering sales along China’s coastal areas, including those subject to import duties and taxes, as well as those entering bonded storage.