Sinopec Fuel Oil‘s bunker sales jumped 25% year on year in 2021 to become the world’s fifth biggest supplier, according to data from the China Petroleum Circulation Association, S&P Global reports.
Sinopec Fuel Oil is the bunker supply arm of the Sinopec, the world’s top refiner and which produced 3.48 million mt (122,000 b/d) of LSFO over January-June to account for 49% of China’s output, according to local information provider JLC.
The volume was up 8.4% year on year and the market share dropped from 65% in the first half of 2021 because Sinopec’s three leading refineries, Qilu, Maoming and Shanghai, suspended production or cut output for a time due to fires.
Meanwhile, China’s bunker sales have been lower year on year owing to weak demand amid lockdowns. China’s fuel oil exports over January-June fell 7.3% year on year to 9.09 million mt despite a sharp rise in domestically produced barrels, General Administration of Customs data showed.
Restrictions to curb COVID-19 caused port congestion, which resulted in a drop in bunker demand, suppliers said. Chinese refiners also cut their rates amid weakened oil demand during lockdowns, so bunker prices in China were less competitive due to tightened supply, industry sources said.
However, market participants polled by S&P Global Commodity Insights expected China’s domestic refineries to keep run rates elevated, which could cap LSFO bunker premiums and enable suppliers stay more competitive in the second half of 2022.
The Platts Zhoushan-delivered marine fuel 0.5%S bunker premiums to benchmark FOB Singapore Marine Fuel 0.5%S cargo assessments averaged $60.35/mt Aug. 1-4, compared with $88.48/mt in July and $101.32/mt in June, S&P Global data showed.
Source Platts