China Fuel Oil Imports May Decline by Nine Percent in 201

2015-09-22

Following China importing its lowest volume of imported fuel oil in a year with a July figure of nearly 1.1 million tonnes, experts say the nation's fuel oil imports will drop further this year and in 2016, Reuters reports.

They cite reforms allowing nearly 700,000 barrels per day (bpd) of crude oil to be purchased by small, independent buyers outside the state-owned sector as the reason for the declines.

This is the equivalent of about 11 percent of total crude shipments into the country.

Consultancy Energy Aspects noted that with seven refiners having received approval to use imported crude, displacement will occur quickly and demand could fall by 9 percent in 2016.

The Chinese government raising its fuel consumption tax was cited as another factor in the drop in demand.

A Singapore-based bunker fuel supplier warned that along with this decline, "Fuel oil demand for shipping is also bad as trade has slowed down a lot.

"They are also using larger vessels now so this affects prices as well," they added, in reference to the deployment of a number of ultra large container vessels (ULCVs) this year on the Asia-Europe routes.

Additionally, China's imports of bitumen mixture, which can be blended into fuel oil, have also dropped, from 1.5 to 2 million tonnes a month late last year to 500,000 to 700,000 tonnes a month in 2015, according to a Beijing-based trader.

The news is in stark contrast to China earning enthusiastic headlines in June of this year, when apparent demand for fuel oil that month was said to have soared 24.7 percent year-over-year to 1.08 million bpd.

Source from : Ship&Bunker

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