China’s VLSFO output drops in the first three quarters – JLC

Chinese refiners produced 9.8 million mt of VLSFO in January-September, according to market intelligence provider JLC.

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China’s daily average VLSFO output in the first three quarters fell by 13.7% year-on-year to 35,817 mt, according to JLC.

The lower VLSFO production can be attributed to relatively bad production margins and more unit maintenance.

“Most state-owned refineries showed low enthusiasm for LSFO [VLSFO] production amid meager production margins, and some even adjusted their production plans,” JLC reported citing industry sources.

Refinery maintenance work at more units during the same time also capped VLSFO output. State-owned refineries had an offline capacity of 520,888 b/d in the first nine months of this year, up from 436,519 b/d in 2024, JLC noted.

Meanwhile, Chinese refiners have applied for export quota switches from VLSFO to CPP (gasoline, diesel and jet fuel). Once approved, China's total VLSFO export quotas are expected to decline by 490,000 mt to 13.24 million mt this year – still above 13 million mt in 2024, JLC reported.

Earlier this year, China released a third batch of VLSFO export quotas for 2025 totalling 605,000 mt, all of which were allocated to Sinopec, JLC noted.

The country’s total VLSFO output is expected to be around 13.0 million mt in 2025.

By Aparupa Mazumder

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