May 28, 2020 / 1:51 AM / 2 months ago

RPT-UPDATE 1-China's exports of IMO-compliant fuel rise a third in April - data, trade

 (Repeats story published on Wednesday with no changes to text)
    By Chen Aizhu and Muyu Xu
    SINGAPORE/BEIJING, May 27 (Reuters) - China's low-sulphur marine fuel
exports rose by a third in April compared with March to the highest level yet
after it waived export taxes for domestic refiners to meet shipping demand,
Chinese customs data showed.
    Chinese refiners began exporting in January very low sulphur fuel oil
(VLSFO) with a maximum sulphur content of 0.5% to comply with emission rules for
ships from the International Maritime Organization.
    Data from China's General Administration of Customs showed April exports of
the ship fuel reached nearly 1.43 million tonnes, up from 1.07 million tonnes in
March and just below a combined 1.56 million tonnes for the first two months.
    Exports in the first four months reached just over 4 million tonnes, the
data showed.
    As the world's second largest economy, emerged from the coronavirus
pandemic, China's exports of all goods rebounded, although global recession
overshadows the demand recovery.
    China, which has been striving to reduce its reliance on bunker fuel imports
and create its own marine fuel hub to supply northern Asia, has not explained
how it collects its marine fuel export data.
    Beijing-based traders, speaking on condition of anonymity, said China
records its bunker fuel exports by tracking Chinese refiners' bunker sales from
bonded storage at major Chinese ports, such as Zhoushan and Qingdao in east
China and Dalian in the northeast.
    The average price of VLSFO in China was $234 in April, on a par with $236 in
Singapore, Asia's bunker fuel hub, one of the traders said.
    Analysts expect Chinese refiners to price their supplies at discount to
Singapore to try to win a bigger share of the international market.
    So far the impact is muted.
    "Compared to Singapore, the competitively priced VLSFO among main Chinese
ports might have attracted more business," Mia Geng, analyst at FGE in
Singapore, said.
    Beijing has allowed only four state refiners - Sinopec Group, CNPC, China
National Offshore Oil Company (CNOOC) and Sinochem Group - as well as private
refiner Zhejiang Petrochemical Corp (ZPC) to export VLSFO, managed under a quota
system.
    Chinese consultancy JLC Network Technology estimated these refiners produced
1.46 million tonnes of VLSFO in the first quarter.
    As China's production grows, imports are expected to fall. Imports from
countries such as Singapore and South Korea into China's bonded storages
totalled 4.3 million tonnes in the first four months, down 10.7% from a year
earlier, customs data showed. 
    Separately, China imported 470,000 tonnes of fuel oil under the "general
trade" category, in the first four months, the data showed. The oil has been
purchased by petrochemical plants as feedstock, traders said.
    The table below shows China's fuel oil import and exports.  
    Volumes are in tonnes.
    
 Exports    Bonded storage       Processing or      Monthly    Year-To-Date
                 trade             tolling           total     
 Jan-Feb       1,560,681              --           1,560,681     1,560,681
  March        1,068,789              --           1,068,789     2,629,470
  April        1,425,085             8,100         1,433,185     4,062,655
                                                                     
 Imports     General trade      Bonded storage      Monthly    Year-to-date
                                     trade           total     
 Jan-Feb        199,770            2,516,123       2,716,957     2,716,957
  March         208,462             747,236         955,698      3,672,655
  April         67,657             1,029,406       1,097,063     4,769,718
 
 (Reporting by Chen Aizhu in Singapore and Muyu Xu in Beijing; editing by
Florence Tan and Barbara Lewis)
  
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