China’s VLSFO output rose in May - JLC

Chinese refiners produced 1.31 million mt of VLSFO in May, up from 1.23 million mt in April, according to market intelligence provider JLC.

PHOTO: An ocean-going freighter berth at port of Ningbo. Getty Images

The country's daily average VLSFO output rose by about 3% month-on-month, reaching 42,000 mt in May, JLC said. This increase was driven by the Chinese government's release of new VLSFO export quotas, which prompted refiners to boost production.

In the second round of allocation this year, the government announced 4 million mt of VLSFO export quotas for bonded bunkering in May. Additionally, “unit restarts and better margins” encouraged refiners to increase production.

Sinopec and PetroChina's daily VLSFO production surged to around 20,000 mt and 18,000 mt in May, respectively, both up 2% from the previous month. CNOOC also increased its VLSFO output last month.

The higher production has led to greater bunker fuel availability in Zhoushan, with most suppliers recommending lead times of 3-5 days for the grade.

By Tuhin Roy

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