China curtailed VLSFO output in September – JLC

China produced about 1.17 million mt of VLSFO in September, with a daily output of 39,000 mt, and 5.4% lower than its August figures, market intelligence provider JLC reported.

PHOTO: A distillation tank of an oil refinery plant in China. Getty Images

Chinese refineries produced less VLSFO in September as they prioritised the production of other refined products to meet their allocated export quotas and take advantage of better margins, JLC said.

JLC says some refineries were forced to cut their VLSFO production in September because they lacked VLSFO export quotas.

Chinese oil giant Sinopec lowered its VLSFO output to 20,066 mt/day in September, down by 4% from August, as many of their refinery units were under routine maintenance, JLC said.

PetroChina, another oil major in China, daily VLSFO output fell by 3.26% in September as lack of quotas capped production. The company produced a total of 455,000 mt of VLSFO in September, with a daily output of 15,167 mt.

“The negative impact of quota tightness may continue into October, and PetroChina may see a further decline in its VLSFO output,” JLC further added.

JLC anticipates a potential increase in VLSFO output in the upcoming months if new export quotas are released in China.

Aparupa Mazumder 

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