Chinese ports pricing B24 biofuel lower than Singapore’s

Suppliers in the Chinese ports of Guangzhou, Shenzhen and Dongguan are pricing B24-VLSFO about $40/mt lower than Singapore’s B24-VLSFO.

PHOTO: View on the Port of Xiamen, China with a ship and cranes. Getty Images

Bunker fuel blends sold in Chinese ports don’t qualify as bonded bunkers in mainland China, in which value-added tax (VAT) is waived for VLSFO sold to ocean-going vessels. The lack of VAT waiver for biofuel blends discourages Chinese refiners and blenders to blend them with VAT-exempt VLSFO.

The suppliers therefore import finished B24-VLSFO blends from Singapore and other places before they are sold in Chinese ports. It remains unclear whether the Chinese authorities will consider including marine biofuel blends sold to ocean-going vessels under VAT waiver scheme in the near term, a source says.

Singapore’s B24-VLSFO price has typically been at a discount to B24-VLSFO prices in most Chinese ports, including Zhoushan. It has now swung to a premium of $42/mt over Guangzhou’s B24-VLSFO price, according to ENGINE data.

Dutch marine biofuel blends have also lost some of their price advantages over Singapore and Chinese ports, after the Dutch government slashed its rebate multiplier for marine biofuel sales from 0.80 to 0.40.

Rotterdam’s B24-VLSFO discount to Singapore’s B24-VLSFO has narrowed from $225/mt on 27 December, to $149/mt now. Its B24-VLSFO discount to Guangzhou’s B24-VLSFO stands at $107/mt.

By Nithin Chandran

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