China’s fuel oil imports experienced a significant decline in March, dropping 29% compared to February and 30% when measured against the same month last year. According to customs data released on Sunday, total imports for March amounted to 1.38 million metric tons, equating to approximately 283,212 barrels per day (bpd).
This decline contributed to a total of 5.22 million tons imported in the first quarter of 2023, representing a 6.3% decrease year-on-year. Typically, these fuel oil imports serve as feedstock for refineries to produce higher-value oil products.
Although run rates at China’s independent oil refiners have seen a slight increase recently, the sector continues to grapple with challenges, such as weak domestic fuel demand and supply risks stemming from U.S. tariffs and sanctions. In terms of overall oil refinery activity, throughput in China rose by 0.4% in March, albeit from a robust previous year’s baseline.
This modest increase was bolstered by production at smaller independent plants and higher operational rates at newly established facilities. On the export front, China witnessed a noteworthy 33% increase in low-sulphur marine fuel exports in March compared to the previous year, with a 5% rise from February data.
Prices for low-sulphur marine fuels at major Chinese ports, like Zhoushan and Shanghai, remained lower than those at the Singapore trading hub during March. For the first quarter, exports of these marine fuels reached 4.76 million metric tons, marking a 14.3% annual increase.
Additionally, China released a second batch of marine bunker export quotas at the end of March, amounting to 5.2 million metric tons, an increase compared to the previous year.