China Records Sharp Decline in Fuel Oil Exports to New Low

China's fuel oil exports, primarily used for ship bunkering, experienced a decline in August to their lowest level in nearly two years. Data from the General Administration of Customs revealed that the total export volume reached 1.22 million metric tons in August, equivalent to approximately 250,773 barrels per day. This volume represents a 34% decrease from the previous month of July and a 25% drop compared to the same period last year, marking the lowest level recorded since October 2024. Bunkering operations were negatively impacted by adverse weather conditions in Zhoushan, China's primary hub for this sector. Nevertheless, prices for low-sulfur bunker fuel in Chinese ports remained lower than those in Singapore, a prominent regional bunkering center. Concurrently, China's total fuel oil imports, typically destined for refineries and ship fuel blending facilities, reached 1.3 million tons in August. These imports registered a 15% increase month-on-month, while decreasing by 11% on an annual basis. Regarding market sentiment, buying interest for fuel oil improved in the third quarter compared to the second, though it remained constrained. This was attributed to independent refiners still holding crude oil import quotas that they needed to utilize. Meanwhile, China's crude oil processing volume rose for the second consecutive month in August, supported by increased refined fuel exports following Beijing's easing of export restrictions in mid-July.